Islamic Banking Products Research Articles

Pengaruh Tingkat Pengetahuan Masyarakat Terhadap Minat Menggunakan Produk Bank Syariah (Studi pada Masyarakat Desa Carebbu, Kec. Awangpone, Kab. Bone)

Public knowledge about Islamic banks will also affect the public's view of Islamic banks themselves. Interest is an interest in something that can cause feelings of pleasure, interest, and prosperity. This study discusses the influence of the level of public knowledge on interest in using Islamic bank products. This research was conducted with the aim of finding out the level of public knowledge about using Islamic bank products. This study uses a quantitative research method. The data of this study used primary data with the distribution of questionnaires as many as 97 respondents. The sampling technique uses a simple random sampling technique. The results of this study show that there is a partial effect between the level of public knowledge on the interest in using Islamic bank products with a value of 15,280. Meanwhile, the coefficient test obtained a score of 70.8% and the rest was influenced by other factors. Thus, a small number of related variables are explained by the independent variables used in the study.

Factors affecting SMEs’ choice of banks in Oman: an emphasis on Islamic banks

Purpose Commercial banks are the catalysts for meeting the financing needs of small and medium enterprises (SMEs). However, not all commercial banks are equally attractive to SMEs because of differences in banking services’ key attributes. Moreover, customers’ preferences vary between Islamic and conventional banks. This paper aims to identify factors motivating SMEs to establish business ties with banks in Oman. Design/methodology/approach The authors collected data from 217 SMEs through a questionnaire survey. The data were analyzed using a t-test and structural equation modeling (SEM). In addition, the research applies the theory of planned behavior as a theoretical framework. Findings The t-test results show that SMEs place greater emphasis on electronic banking, convenient locations, religious beliefs and favorable terms and conditions. The results from the SEM analysis show that the SMEs in Oman consider attractive packages, including favorable rates, transaction processing time, fees and the availability of technology-enabled services, when choosing a bank. Moreover, customers who are aware of Islamic banking products are optimistic about the future of Shariah-based banking. Originality/value As a Muslim-majority country, Oman lags behind its Gulf Cooperative Council peers in terms of the development of the Islamic banking system. For the success of this mode of financing, it is essential to know which factors SMEs prioritize to establish ties with Islamic banks. Hence, the research is expected to provide new information for bank management to devise financial products attractive to investors.

Desirability of Sukuk as a New Investment Avenue: An Exploratory Study in Bangladesh

Sukuk can be a worthwhile device for meeting demand of those willing to invest in Shariah-compliant avenues of investment, which has been largely catered by Islamic banking products in Bangladesh. Using survey data collected from existing market investors, this study aims to explore the factors contributing to their choice of investment in sukuk. The risk-return preference of the investors is crucial for structuring the sukuk for issuance. Major factors contributing to the investment decision of the sukuk of surveyed participants also include confirmation of the use of proceed of the project in a Shariah-compliant way, risk-adjusted return, timely payment of the expected cash flows, tradability in the secondary market, awareness regarding the expertise, and independence of the Shariah advisors in the Shariah supervisory board (SSB). To facilitate the new instrument and utilize it for the development of the country, especially for the infrastructural development and green projects, government and other policymakers can contemplate offering government guarantee as well as tax exemptions demanded by the respondents of this study. The respondents expressed aversion to longer-term investment opportunities; rather sukuk maturity of up to five years was found desirable. Apprehension for upholding a distinct special purpose vehicle (SPV) and trustee for sukuk was revealed in the study. Although sufficient care was taken in selecting the sample, the limitation of the study is that it may not be deemed conclusive due to the lower sample size. A larger scale study may be conducted to reckon the insight of more potential investors in the market.

Impact of Islamicity on the productivity of conventional and Islamic banks in selected southeast Asian countries

This study provides a new understanding of how bank-specific characteristics, the macroeconomic environment, and Islamicity affect the productivity of conventional banks (CBs) and Islamic banks (IBs) in selected Southeast Asian countries. The data of 153 banks, collected between 2015 and 2020, were used, and the influence of the selected factors was investigated by using panel data approaches, as well as the data envelopment analysis-based Malmquist productivity index (DEA-MPI). In the first-stage analysis, bank productivity was measured by using total factor productivity changes (TFPC), and in the second-stage analysis, panel regression analysis was performed, specifically, multiple panel regression analysis, which employed pooled ordinary least squares, a fixed-effects model, and a random-effects model. Parametric and nonparametric (Mann–Whitney and Kruskall–Wallis) tests found that the IBs were more progressive than the CBs. The findings indicated that unlike the IBs, change in the productivity of the CBs was adversely affected by economic Islamicity, as well as legal and governance Islamicity, which indicated that macroeconomic and legal structures that leaned toward Islamic values adversely affected the CBs. Meanwhile, the IBs were likely to be structured in line with such values and thus can mitigate the adverse impact of various factors. Both groups were negatively affected by human and political rights Islamicity, which indicated the use of a setup that could not benefit from Islamic values. This finding lends credence to the arguments in the literature that IBs mirror CBs in practice to remain competitive in their pricing based on market principles. The IBs were found to benefit from international relations Islamicity, which bodes well for the competitiveness of new players against the ancient setup of CBs in the globalized world.

Potential customers’ intention to use Islamic banking products in Cameroon: the mediating effect of attitude

Potential customers’ intention to use Islamic banking products in Cameroon: the mediating effect of attitude

Internal and External Factors on Profitability of Islamic Banks in Indonesia Mediated by Operating Expenses Operating Income (Period 2013 to 2023)

Lucrativeness is a vital element for evaluating Islamic banks' monetary achievement. It's critical to grasp the determinants that influence Indonesian Islamic banks' lucrativeness. The objective of this examination is to explore the factors—such as problematic financing, financing to store ratio, currency rates, price rises, and operational proceeds as an intermediary variable—that impact the productivity of Islamic banks in Indonesia. This research intends to provide choice makers in the Islamic fiscal industry a more comprehensive discernment of the budgetary operation of Islamic banks by scrutinizing these guidelines. This research methodology uses a panel data approach using secondary data from Islamic banks in Indonesia. Through panel data analysis, this study examines the effect of these variables on the profitability of Islamic banks. The conclusions showed that, in Sub-structural I, Financing to Deposit Proportion (FDR) favorably affects the productivity (ROA) of Indonesian Islamic banks, while Non-Performing Financing (NPF), Currency Ratios, and Rising Prices have no consequence on operational expenses operational proceeds (BOPO). As indicated by sub-structural II, profitability is impacted by inside factors (NPF and BOPO), outer variables (expansion and cash rates) have no significant effect on productivity, and financing to store proportion (FDR) has no impact on productivity. In this examination, the BOPO fills in as a mediating variable that just intercedes the effect of the Financing to Deposit Ratio on Lucrativeness. Concerning the other autonomous factors, it has no bearing. Other than featuring the significance of hazard relief and operational effectiveness in accomplishing positive monetary outcomes, this exploration illuminates the variables influencing the productivity of Islamic banks in Indonesia.

The failure mode and effect analysis of Islamic banking product marketing in Indonesia

Purpose This study aims to use a risk management approach to analyze the factors influencing the marketing failure of Islamic banking products in Indonesia. Design/methodology/approach Data were collected from respondents to be involved in the risk assessment of failure based on the criteria of severity score, likelihood of occurrence and detection ability of employees. The dominant factors were grouped into the number of new customers and transaction value categories. The failure mode and effect analysis (FMEA) method was used to identify the highest risk dominant factors. Findings The study results show critical factors and prioritized for immediate improvement. The number of new customers can be identified based on the following factors: occupation of prospective customers; income level of prospective customers; the lifestyle of the prospective customer. Transaction value can be identified based on the following factors: total balance; the level of convenience in transactions; turnover of funds; profitability; and risk management. Practical implications The Islamic banking industry in Indonesia needs to consider the importance of suitability: target market with the products offered, considering the income level of customers with suitable products, the level of profit sharing expected by consumers, improving customer education about Islamic banking products, the capabilities of financing staff and staff capabilities on risk management in Islamic banking products and services. Originality/value To the best of the author’s knowledge, this research is the first to apply FMEA in analysing marketing failures of Islamic banking products and services.

How are Islamic banking products developed? Evidence from emerging country

How are Islamic banking products developed? Evidence from emerging country

Customer innovativeness in the adoption of Islamic banking in Malaysia

AbstractIslamic banking is a financial system that operates in accordance with Islamic principles, prohibiting the payment or receipt of interest (usury) and adhering to Shariah law. In order to ensure ethical and socially responsible financial practices, Islamic banks use profit and loss‐sharing arrangements rather than traditional interest‐based transactions. Islamic banking has gained substantial traction in Malaysia, driven by its alignment with the values of the predominantly Muslim population. However, the adoption of Islamic banking products and services still faces challenges related to consumer preferences and innovation attributes. This study investigates the mediating influence of customer innovativeness in the adoption of Islamic banking within the Malaysian settings. The study gathered responses from 436 respondents in Malaysia. Structural equation modelling was used to examine customer innovativeness's role in mediating the relationship between relative advantage, compatibility, observability and complexity and the intention to adopt Islamic banking. The study supports the hypotheses that customer innovativeness partially mediates the relationships between relative advantage, compatibility and observability of Islamic banking and the intention to adopt them. However, the study did not provide evidence for the mediation hypothesis concerning the complexity of Islamic banking. In conclusion, this study sheds light on the mediating role of customer innovativeness in Islamic banking adoption, aiding academia's understanding of consumer behaviour. Policymakers can use these insights to promote ethical financial practices, whereas the banking sector can adapt offerings to meet consumer preferences and enhance competitiveness.

Relationship between sharia supervisory board attributes and sustainable development goals (SDGs) financing in Islamic banks

ABSTRACT It has been widely believed that Islamic finance holds a potential role in achieving sustainable development goals (SDGs). Hence, considering the power of the Shari’a Supervisory Board (SSB) to approve or reject Islamic banking products, this paper investigates the association between SSB attributes and Islamic banks’ SDG financing. The study utilized unbalanced data generated from a sample of 32 fully Sharia-compliant Islamic banks across nine (9) countries between 2013 and 2021. The findings reveal that SSB size and SSB financial expertise significantly reduced Shariá-compliant financing for agriculture, education, and health economic activities. Besides, while SSB foreign scholars have an insignificant association with agriculture and education financing, they significantly reduced financing for health. In contrast, SSB meetings and SSB gender diversity significantly increased funding for these activities. These findings could assist regulators in revising the SSB codes of governance to enhance their effectiveness in supporting Islamic banks’ activities aimed at achieving SDGs.

The Principles and Practices of Akad Ijarah: A Research Application in Islamic Banking

This article investigates the principles and practices of Akad Ijarah and its application in Islamic banking. Using a literature review method, this article explores the fundamental concept of Akad Ijarah and analyzes its implementation in the context of Islamic banking. The research aims to provide a deep understanding of the structure, mechanisms, and benefits of Akad Ijarah for Islamic financial institutions. The analysis results present a comprehensive overview of how Akad Ijarah is implemented in the practices of Islamic banking, as well as the challenges and opportunities it faces. These findings have significant implications for the development of Islamic banking products and services that adhere to Shariah principles. In conclusion, this research highlights the importance of a solid understanding of Akad Ijarah in ensuring the compliance of Islamic banking with Shariah principles.

The Contemporary Environment on the Application Shariah Supplementary Contracts in Islamic Banking Products of the Islamic Banks

The Contemporary Environment on the Application Shariah Supplementary Contracts in Islamic Banking Products of the Islamic Banks

Dampak Literasi Keuangan Dan Inklusi Keuangan Terhadap Keputusan Mahasiswa Dalam Menggunakan Layanan Dan Produk Bank Syariah

This research aims to see the effect of financial literacy and financial inclusion on student decisions in using Islamic bank products and services. The type of research used in this research is quantitative with data collection techniques used are questionnaires and questionnaires. The method of determining the sample using the slovin formula obtained 30 research respondents. The data analysis technique uses Structural Equation Modeling (SEM) with the help of SPSS. This study shows that financial literacy and financial inclusion variables have a positive and significant impact on student decisions in using Islamic bank products and services. This research is expected to be able to change the mindset of students towards the use of products and services of Islamic banks. Then it is expected that students use Islamic financial services not on the basis of literacy or inclusion but pay attention to the application of sharia.

Modeling the Socio-Economic Factors Affecting Islamic Insurance Adoption: A Structural Equation Modeling Analysis

Modeling the Socio-Economic Factors Affecting Islamic Insurance Adoption: A Structural Equation Modeling Analysis

Antecedents of Murabaha home financing among Muslim household – an integrated framework

PurposeThough Murabaha financing experienced substantial growth in several majority-Muslim countries, its market share in the Moroccan banking industry is still very narrow than other conventional banks’ instruments. The current research investigated the ability of an extended theory of planned behavior (TPB) framework to explain the main drivers of attitude and intention to use Murabaha financing among Moroccan households. The moderating effect of Islamic religiosity was also scrutinized.Design/methodology/approachData were collected via a survey of 512 Moroccan consumers and analyzed using the partial least squares (PLS) technique.FindingsFirst, attitude toward Islamic banking products is a key predictor of consumer intention to use Murabaha financing. At the same time, consumers’ attitudes are influenced by Islamic financial literacy, subjective norms, behavioral control and profit and loss sharing. Islamic religiosity was also found to positively moderate the link between attitudes towards Islamic banking (IB) and intention to use Murabaha financing, e.g. positive attitudes toward IB are more likely to convert into an intention to use Murabaha financing among Muslim consumers with higher levels of religiosity.Managerial implicationsTo boost consumers’ intention to use Murabaha financing, Islamic bank managers should consider further investment in advertising to enhance consumers’ awareness about IB products. Islamic banks should also consider digital and social media marketing to increase consumers’ awareness about the products and spread a positive e-WOM with regards to their products. Our findings emphasize the importance of Islamic religiosity in shaping Muslim consumers’ intentions to use Murabaha financing. Islamic banks ought to make sure that Murabaha financing contracts are strictly adherent to and compliant with Shari’ah principles. They should also train their frontline employees on Islamic financing activities so that they can effectively respond to the queries and questions of Murabaha potential consumers.Originality/valueThe study findings contribute to the IB literature by demystifying the key factors shaping Muslim consumers’ intentions to use Murabaha financing. The study also extends the literature by emphasizing Islamic religiosity as a basis for Muslim consumers’ behavior in the context of IB. To the best of our knowledge, this study is among the first to empirically investigate Muslim consumers’ intention to use Murabaha financing in North Africa and the Arab countries.Peer reviewThe peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-10-2022-0680

What drives to adopt Islamic banking products and services: is it shariah compliance or convenience?

Purpose The main issue is whether customers prefer convenience over Shariah compliance or the opposite when they decide their Islamic banking needs. The purpose of this paper is to explore why customers adopt Islamic banking products and services: Shariah compliance or convenience? Design/methodology/approach Using convenience sampling, 310 respondents’ data were collected through online survey. For testing the fit and hypotheses of the proposed model, AMOS 25 software and Smart-PLS 4.0 software have been used. Findings Attitude, Islamic value and convenience have significant determinants of Islamic banking products and services. Shariah compliance has no direct or indirect influence on neither intention nor actual behaviour to adopt Islamic banking services. Furthermore, gender has no such differential effect on the adoption. Practical implications Managers and marketers of Islamic banks may benefit from the findings of this study, which demonstrate fresh insights regarding the factors which help in strategy formulations to promote Islamic banking services. Originality/value The growth of Islamic banks, branches and windows is remarkable in both Muslim-majority and Muslim-minority countries in the world. This paper postulates the behavioural finance studies in Islamic banking and finance research stream by extending the theory of planned behaviour of Ajzen (1985) as all the three new constructs (Islamic value, convenienc and Shariah compliance) are statistically fit for further studies. However, only Islamic value and convenience are the two significant factors which drive customers to take decision in the proposed model. This study gives insights to the bankers and authority about the consumer behaviour.

Nonlinear effect of Islamic financing on economic stability: A Case of equity and debt financing

The main purpose of this study is to differentiate between the effects of two major categories of financing of Islamic banks on the economic stability of the selected countries. This study determines the nonlinear effect of equity-based and debt-based financing of Islamic banks to assess how the stability of the economy can be achieved. This study acquires the data on Islamic banking product-wise financing at a national level from the Islamic Financial Service Board (IFSB), and the data on industrial production index is selected from International Financial Statistics for selected countries. The sample size comprises of all the countries included in the IFSB. The data ranges from 2014Q1 to 2019Q4. The economic stability is estimated using the GARCH volatility approach, and the nonlinear ARDL model is used to determine the causal effect of Islamic banking product wise financing. This study clarifies the empirical relationship between Islamic banking equity-based financing and debt-based financing and whether macroeconomic stability is linear or quadratic in terms of the marginal effect of financing, which helps policymakers to constitute strategies for expanding the size of Islamic banking financing. The results identified the inverted U-shaped effect of equity-based financing types on output instability. At the same time, both financing types are not causing price instability. The outcomes are instruments for the central bank to optimize the Islamic banking financing structure to achieve the goal of product-wise financing of economic stability.

The Influence Of Marketing Mix And Brand Awareness On Banking Customers' Interest In Using Home Ownership Credit Services

The purpose of this study is to ascertain whether social influence, brand awareness, and sharia marketing mix influence the choice of sharia house ownership financing. Customers who select Sharia KPR items make up the research population. Purposive sampling was the method of sampling employed by the researchers. 100 persons were chosen as the sample size by the researchers. In this study, a questionnaire was utilized as an instrument by the researcher to collect the required data. In this study, the researcher used a quantitative research methodology. data interpretation and analysis with SPSS 23.0 software. The analysis results indicate that the three variables studied, namely social, brand awareness, and sharia marketing mix, significantly influence the decision process for selecting sharia bank customers. Brand awareness also has a significant effect, with a significance level of 0.000. Likewise, the sharia marketing mix variable also has a significant impact. In addition, the F test results show that simultaneously, social variables, brand awareness, and the sharia marketing mix have a significant influence on the decision process for selecting sharia bank customers, as evidenced by the F value of 35.5. These findings illustrate that the combination of these factors as a whole has a strong role in shaping customer preferences for Islamic banking products or services. The author suggests that future research add other variables so that this research can further develop for the academic world in the future. So in this case, it is hoped that the bank needs to understand the social conditions of the target market as a form of marketing research to win the sharia banking market share. Can increase brand awareness in the community to win market share.

CUSTOMER'S PERCEPTION AND DIGITALIZAION ABLE TO INCREASING INTEREST TO INVEST IN GOLD IN ISLAMIC SHCEME

The aim of this research is to find and determine the influence of perceptions of Islamic banking products, digitalization and income on interest in investing in gold at BSI Mobile. Sampling used purposive sampling technique with a total sample of 121 respondents. The approach used is a quantitative model with data collection techniques using questionnaires. SPSS 26 and Excel are data analysis tools. Data testing uses data quality tests, classical assumption tests, multiple linear regression analysis tests and hypothesis tests. The results of this research are that perceptions of sharia banking products and digitalization partially have a significant effect on interest in investing in gold at BSI Mobile, while partially income does not significantly affect interest in investing in gold at BSI Mobile. Simultaneously, all independent variables have a significant effect on the dependent variable.

PERSEPSI PENGURUS MASJID TENTANG PRODUK TABUNGAN BANK SYARIAH DAN MINAT MENABUNG DI BANK SYARIAH (Studi di Kelurahan Simpang IV Sipin Kecamatan Telanaipura Jambi)

This study aims to: (1) to find out how the perception of mosque administrators towards Islamic bank savings products (2) to find out how mosque administrators are interested in saving their mosque funds to Islamic banks. The method used to collect data in this study is through interviews, observation and documentation. In this study, the research objects used were 9 mosques in the Simpang IV Sipin Telanaipura area. The results of this study are that the mosque administrators in the Simpang IV Sipin Telanaipura area there are still some mosque administrators who do not really understand the products issued by Islamic banks, 6 out of 9 mosques studied that the administrators have the perception that Islamic bank products are good, guaranteed by the sharia which is free from usury elements. While the other 3 mosques mosque administrators perceive that Islamic bank products are not much different from conventional banks, they assume that as long as conventional banks do not take excessive profits from customer savings, it is still different if they take profits beyond the limit. Furthermore, as many as 6 mosques, the administrators are interested in saving the mosque funds that they manage in Islamic banks. Meanwhile, as many as 2 mosques, the administrators are not interested in saving the mosque funds that they manage in Islamic banks, they prefer conventional banks. If it is percented, 67% of mosque administrators are interested and 22% of mosque administrators are not interested. Mosque administrators who do not save in Islamic banks because they save in conventional banks, they have the perception that Islamic banks have complicated requirements, difficult and long arrangements, which is why they prefer conventional banks. And 1 mosque administrator is not interested in either Islamic banks or conventional banks, if percented by 11%. The implication of the findings of this study is that it is necessary to follow up on efforts related to increasing public knowledge of Islamic financial products for the better development of Islamic banking, mosques and society.