Islamic Home Financing Products Research Articles

Islamic home financing products: a study of customer intentions in Indonesia

Purpose Islamic home financing products with Murabaha contracts are widely favored among the Muslim community in Indonesia, given that the country has a population of over 230 million Muslims. To facilitate the development of products and enhance public interest, it is important for Islamic banking institutions to comprehend the elements that may impact the intents of Muslim communities in Indonesia when selecting Islamic home financing products with Murabaha contracts. The purpose of this study is to ascertain the many aspects that may have an impact on the decision-making process of Muslim communities in Indonesia when selecting Islamic home financing product that use Murabaha contracts. Design/methodology/approach The partial least square-structural equation modeling data processing techniques will be used to process and evaluate these components. The data used in this study was acquired by administering questionnaires to a sample of 298 Muslim communities, which were randomly selected from a pool of 301 possible customers of Islamic house finance in Indonesia. Findings The results of this research show that attitude, subjective norms and perceived behavioral control have positive influence on intention to choose an Islamic home financing scheme with Murabaha agreement, while price fairness of Islamic home financing and Islamic altruism have direct and indirect influence on intention to choose Islamic home financing. Research limitations/implications Analyzing factors that affect intention to choose Islamic home financing product under Murabaha contract is essential. Future study is required to analyze other Islamic home financing products, such as istisna, ijarah muntahia bi tamlik and diminishing musharakah. This study only serves as a foundation for further investigations into conventional approaches to home financing in emerging nations. The areas can be expanded to be implemented in other countries. Practical implications It is anticipated that Islamic banks have the capacity to cultivate a favorable and constructive perception, hence fostering a positive disposition among the Muslim populace in Indonesia. Furthermore, it is essential for Islamic banks to guarantee that all stakeholders within the sharia-compliant institution, particularly the frontline staff, have enough expertise and understanding of the intricacies of Islamic home financing products including Murabaha contracts, which are intended for prospective customers. In the foreseeable future, it is anticipated that the Muslim population in Indonesia would exhibit a greater intention toward the use of Islamic home financing solutions that use Murabaha contracts, facilitated by the establishment of a conducive environment. Originality/value This research integrates the impacts of pricing fairness and Islamic charity as a modified model, alongside the theory of planned behavior model, to examine the influence of these factors on individuals’ intentions to use Islamic home financing in Indonesia.

Does Tawarruq still remain the top option for Islamic home financing (IHF) products in Malaysia?

PurposeThe purpose of this study is to investigate whether Tawarruq Islamic home financing (IHF) products remain untouched and maintain their position as the top IHF product in Malaysia.Design/methodology/approachThe study adopted a qualitative research methodology that included both literature review and content analysis. Firstly, the existing studies and literature were reviewed to compare different types of IHF. The composition of IHF products offered by these Islamic banks was then investigated further to analyse each bank’s progress in IHF from 2015 to 2019. The data were gathered from bank websites, brochures, product disclosure sheets and annual reports.FindingsThe findings reveal that around 62.5% of Islamic banks offered Tawarruq for IHF in the year 2020. For the banks that offered Tawarruq, the amount of the financing continued to grow each year. The plausible reason for the preference for Tawarruq was its less risky nature, despite facing numerous operating, legal and Shariah issues.Research limitations/implicationsThis study has several limitations, including the fact that it was limited to home financing products only, the methodology used and the research period.Practical implicationsThis study aimed to provide beneficial insights into the use of Tawarruq, which has been a source of concern for regulators as well as steps made to reduce its usage in the industry. Islamic banks should be more proactive in developing non-Tawarruq products to enhance product innovation in the market and minimise the heavy reliance on debt-based products.Originality/valueThis study provides useful insights by analysing IHF in depth for each Islamic bank and making recommendations for future research. Specifically, the method facilitated critical discussions and comparisons to previous research findings as to why Tawarruq has remained popular.

Applicability of Maqasid Al-Shariah Towards Home Financing by Islamic Banks among University Staff in Malaysia

Despite their significant growth, Islamic banks only consider about avoiding riba, gharar, and maysir at the expense of maqasid al-Shariah. The banks are somewhat converged with their conventional peers. Consumers believed that the banks imitate their peers pertinent to the pricing calculations and product lines. Without effective measure, consumers may discern Islamic banks undermine their maqasid objective and continued critics of mimicking their peers are prolonged. Against this backdrop, this study examines consumer preference using a proposed index known as the Maqasid Consumer Preference Index (MCPi). Drawing upon the MCPi, the present study examines consumer preference for six Islamic banks operated in Malaysia to which Islamic home financing products are presently made available. Our data were drawn from valid 450 usable questionnaires. The results obtained report that six Islamic banks relatively have a moderate index. Of these, Bank Islam Malaysia Berhad (BIMB) is ranked first, followed by Maybank Islamic, CIMB Islamic whilst Kuwait Finance House is ranked last. This work examines a new approach to measure consumer preference using the MCPi. Our contributions are confined to these particular factors – educating customer, establishing justice, and promoting welfare in the context of Islamic home financing in Malaysia. Future works may provide a different perspective on these interrogations by considering new dimensions to extend the findings. Despite this concern, the results obtained offer improved insights for bank managers to manage Islamic home financing products effectively.

DIMINISHING PARTNERSHIP (MUSHARAKAH MUTANQISAH) PRODUCT FOR ISLAMIC HOME FINANCING: THE CONCEPT FOR ISLAMIC FINANCIAL INSTITUTIONS IN AFGHANISTAN

This study aims to examine the factors influencing the Practitioners’ acceptance on Musharakah Mutanaqisah (MM) Islamic home financing (IHF) products amongst clients of Islamic financial institutions in Afghanistan. Using the MM model as a baseline theory, data are collected from the practitioners (Managers, Head of departments and Shari’ah advisors) of IFIs in Malaysia and Afghanistan, using self-administered open-ended questions. Using the qualitative method, the study finds that; attitude, subjective norm, perceived control and Compliancy of product are instrumental in determining the practitioners’ acceptance of Islamic home financing products. It is also discovered that; gender, academic qualification and monthly income have their own effects on without the consumer acceptance. There are three limitations for future studies of IHF in Afghanistan. First, the current work does not include the experienced users who utilize Islamic home financing products. Second, the contribution of the present study is confined to the analyzed explanatory variables. Third, this study also has geographical constraints in which it will be conducted in Afghanistan. These limitations, however, provide directions for further future research. Essentially, this study is a pioneering effort in applying the MM model to the new context of IHF products and to integrate the stakeholders’ acceptance for lower-income class in Afghanistan. This study introduces the compliancy of product and factors in explaining the practitioners/stakeholders acceptance on MM Islamic home financing products. Most fundamentally, this study proposes a modified intellectual framework that is of utmost importance to predict the demand for IHF products in the future.

Qualitative study in identifying factors affecting the behavior of Muslim generation Y towards Islamic home financing products in Malaysia

House is the most important basic need for the human survival, however many individuals especially those who are categorised in the category of generation Y still do not acquire a house due to various factors. It is quite a normal practice for most of home-buyers in Malaysia to purchase a house through banking institutions. However, as a Muslim, it is an obligation to purchase and acquire a house through Islamic financial institutions (IFIs) as it is accordance to the Shariah principle. The objective of the study is to qualitatively identify factors affecting the behavior of Muslims generation Y in Malaysia towards Islamic home financing products. Apparently, it is found that religious belief, profit rate, offer and promotion, and fast service (loan approval) are factors in affecting Muslims generation Y in choosing Islamic home financing products. Afterwards, the study proposed to integrate the findings (identified factors) with the theory of Attitude-Behavior-Context (ABC). The study findings are expected to contribute significantly to the theory, methodology, and empirical practices.

The practice of imposing default rate in Islamic home financing product in Malaysia: Analysis from regulatory and Shariah perspective

In developing and structuring an Islamic banking product, one of the areas that should be addressed is to mitigate risk that includes default risk. Financial institutions will always be exposed to the risk of default by customers. This is faced by Islamic banks as well when granting financing facilities to customers irrespective of the underlying Shariah contracts that apply to the product structure. In order to mitigate such risk, bank normally will impose late payment charges if the instalment amount is not received by the payment due date. In addition to the normal late payment charges, banks may also impose default rate on customers who have defaulted within certain period. As such, this study analysed the practice of charging default rate in Islamic home financing product involving sale- and lease-based contracts. This qualitative study adopted the explanatory methodology as the main method of data collection from relevant documents, such as Shariah-related regulatory policies, Shariah resolution issued by Bank Negara Malaysia (BNM), decided court cases, and Islamic bank product documentation related to the practice of charging default rate. Next, secondary data from journal articles and other published sources, including Shariah literature relevant to this study, were deployed to analyse the said issue. Evidently, several Islamic banks in Malaysia seem to impose default rate in their product structure. Such practice may not be consistent with the spirit of Shariah and Islamic finance if the purpose is to gain more income while the customers face financial issues. This study prescribes Shariah scholars and regulator to re-evaluate the current regulatory policies and product structure to ensure that they embrace the spirit of Shariah, apart from protecting consumers from heightened financial burden.

Islamic mortgage adoption: examining the moderating effects of Islamic altruism

PurposeUsing the theory of planned behaviour (TPB) as an analytical framework, this paper aims to investigate the direct effects of attitude, subjective norm, perceived behavioural control, price fairness and Islamic altruism. It also explores how these path linkages can be moderated by Islamic altruism.Design/methodology/approachData are gathered via survey questionnaires on 287 Muslim bank customers in major cities of East Malaysia. The data are then tested using partial least squares.FindingsThe results show that attitude, subjective norm, perceived behavioural control, price fairness and Islamic altruism are significantly influenced by Muslim bank customers’ intention to choose Islamic home financing products. Islamic altruism is also found to significantly moderate the relationship between price fairness and behavioural intention.Research limitations/implicationsThree limitations are available for future research that include the geographical restriction, respondents’ selection and a limited number of battery items used.Practical implicationsEssentially, the results of this study serve as a guide for Islamic bank managers or mortgage providers to improve their pertinent marketing strategies, which are vital to enhancing the acceptance rate of Islamic mortgage.Originality/valueThis study extends the TPB model by incorporating price fairness and Islamic altruism into the Islamic home financing context.

Receptiveness of Islamic Home Financing among Malaysians: A Revisit

This study examines the effects of the key factors influencing the intention of first-time house buyers to choose Islamic home financing products. First-time house buyers are selected since they are the major segment of Islamic banks' profit for the Islamic mortgage sector. Drawing upon the theory of planned behaviour (TPB), this study proposes a model to test the effects of attitude, subjective norm and perceived behavioural control on the intention of selecting Islamic home financing. This study also examines the effect of "perceived customer taqwa” on customer receptiveness to Islamic home financing. Based on 150 usable questionnaires, PLS results indicate that attitude and perceived behavioural control of the TPB are instrumental in determining the receptiveness of Islamic home financing products. Besides, the added factor, namely, perceived customer taqwa is influential in explaining the receptiveness- implying that God-fearing and God-conscious in oneself resulted in strong intention to opt for halal products. The findings demonstrate that the enhancement of measurement items for TPB factors as well as generation of new factor reflecting Islamic home financing are relevant in determining one’s decision of Islamic home financing. Besides, the findings could offer support to Islamic bank managers to enhance their planning for Islamic home financing products and develop effective strategies accordingly that benefit their customers.

Critical success factors for the receptiveness of Islamic home financing in Malaysia

PurposeThe purpose of this study is to examine the critical success factors (CSFs) for the receptiveness of Islamic home financing in Malaysia.Design/methodology/approachA framework of the CSFs for the receptiveness of Islamic home financing is developed. The framework evaluates the effects of product type, competitive value proposition, Islamic debt collection policy, Islamic bankers' knowledge and maqasid al-Shariah compliance on the receptiveness. Data from 744 usable questionnaires are analysed to confirm the applicability of the framework in Islamic home financing context.FindingsThe results suggest that product type, competitive value proposition, Islamic debt collection policy, Islamic bankers' knowledge and maqasid al-Shariah compliance are significantly related to the receptiveness of Islamic home financing.Research limitations/implicationsTwo limitations are available for future studies. Firstly, the respondents of this study are limited to Malaysians, signifying further testing of the proposed model across different geographies is required to determine the generalisability of the model. Secondly, the contributions of the proposed framework are confined to a specific area of Islamic banking products. Thus, extending the framework to other banking products or conducting a comparative study between Islamic home financing and its conventional peer can improve its generalisability.Practical implicationsThe results obtained offer a fresh direction on how to market Islamic home financing products successfully, where the new CSFs are brought into play.Originality/valueThis study examines the new proposed CSFs for the receptiveness of Islamic home financing in Malaysia.

Examining the influence of factors critical for the consumer to accept the offered Islamic home financing

PurposeThis study aims to examine the impacts of Shariah-compliant products, value-added benefits, mortgage repayment policy and well-versed bankers on the consumer acceptance of Islamic home financing. These variables, thereafter, are called the “critical success factors” (the CSFs) for Islamic home financing.Design/methodology/approachGuided by the Islamic theory of consumer behaviour (ITCB), this study intends to propose the specific CSFs that ensure consumer acceptance of Islamic home financing a success. The term success refers to consumers’ willingness to take up the facility. A questionnaire survey was conducted to elicit responses pertinent to the level of agreement/disagreement of the CSFs. A total of 460 respondents usable responses were obtained and analysed accordingly.FindingsThe results obtained indicate that Shariah-compliant products, value-added benefits, mortgage repayment policy and well-versed bankers are instrumental to influence the consumer acceptance of Islamic home financing.Research limitations/implicationsLike other works, this study has confined its context to capture only a limited geographical area, and the study’s contributions are restrained to the variables analysed to a specific context of Islamic home financing in Malaysia.Practical implicationsThe results obtained can become as a yardstick to measure the consumer acceptance of Islamic home financing.Originality/valueNew proposed CSFs can help to address the new demand of Islamic home financing accordingly, where a new area of improvement is brought into play. This study also extends the applicability of the ITCB to include Islamic home financing products.

Integrating the effects of price fairness and Islamic altruism with the TPB model

PurposeThe purpose of this study is to examine the impacts of price fairness and Islamic altruism on the Islamic mortgage adoption along with theory of planned behaviour’s (TPB’s) constructs (i.e. attitude, subjective norm and perceived behavioural control). Attitude is also analysed as a mediator in this study.Design/methodology/approachUsing TPB as a baseline theory, this study analyses the Islamic mortgage adoption involving a total of 281 Muslim consumers in Malaysia using partial least squares.FindingsThe results indicate that attitude, subjective norm, perceived behavioural control and price fairness significantly influence Muslim bank customers’ intention to choose Islamic home financing products. Other interesting findings are also provided.Research limitations/implicationsThis study contains three limitations that include the geographical constraint, respondents’ selection and the limited number of factors used.Practical implicationsThe results obtained can serve as a guideline for bank managers or marketers to generate better strategies, which are dynamic to improve the acceptance rate of Islamic mortgage.Originality/valueThis study extends the TPB flexibility to integrate with price fairness and Islamic altruism in the Islamic mortgage adoption context.

The Islamic theory of consumer behaviour for ijarah home financing

Purpose This study aims to examine the factors that determine consumer behaviour of ijarah home financing using the Islamic theory of consumer behaviour (ITCB). In particular, the specific contract used is al-ijarah muntahia biltamleek. Subsequently, the term al-ijarah muntahia biltamleek home financing is used throughout the paper. Design/methodology/approach Drawing upon the ITCB, the present study examines patronage factors for al-ijarah muntahia biltamleek home financing. This study’s data were drawn from valid 409 usable questionnaires. Findings Partial least square results suggest that the role of iman, Islamic mortgage support and maqasid consumer index are significantly related to consumer behaviour. In turn, consumer behaviour is instrumental in determining religious satisfaction. Research limitations/implications Two limitations were observed that provide direction for future studies. Firstly, the current study is only tested in one particular Islamic home financing product that may explain why the generalisation is an issue. Secondly, the theory is still in its infancy stage, which, of course leads to some criticisms pertinent to its parsimony and applicability to other settings. Despite these limitations, however, this study aims to suggest a so-called Islamic model of factors that can explain consumer behaviour of a particular Islamic home financing product. In particular, scrutinising the product acceptance from the context of the ITCB can open a new debate in this area. Practical implications This study indeed reduces the theory–practice gap by suggesting new indicators that are workable to improve consumers’ positive perception of Islamic home financing. Given the results obtained, the ITCB provides a better prediction for consumer behaviour of al-ijarah muntahia biltamleek home financing. Originality/value This study expands the applicability of the ITCB to include al-ijarah muntahia biltamleek home financing.

Examining Factors Influencing Customer Intention to Use Islamic Home Financing: A Study in UTM

Islamic home financing is a kind of product offered by Islamic banks, which is based on the principle of Sharia. Using the Theory of Reasoned Action (TRA) as basis, this study examine factors that influence customers intention in using Islamic home financing. 342 usable surveys are obtained from Islamic bank customers which are the staff in UTM. There are six determinant factors which are attitudes, subjective norms, religious obligation, price and product knowledge were tested. The outcomes show that attitude, religious obligation and product knowledge significantly influenced customers’ intention to use Islamic home financing while price and subjective norms are not significant. The results would help bankers to improving the strategies about the factors that they need the effective market Islamic home financing products in order to be more competitive and known to customers.

ISLAMIC HOME FINANCING BASE ON DEBT: A REVIEW OF PRACTICES OF ISLAMIC BANK IN MALAYSIA

Nowadays the dual banking system in Malaysia has enable banks to offer two forms of home financing method, the Islamic home financing and the convensional home loan. As we know a house is a everyone needs. They will get by all means by purchase it, renting or build the house themselves. Islamic home financing product is one of the sources that generate profits for the local and foreign Islamic bank in Malaysia. Thus, very few people can afford to purchase a house on a cash basis. As muslim consumers, it is important for them to choose wisely on their financing. This study attempts to analyse the practice of Islamic home financing product base on debt in Malaysia since 2000 till 2016. The study is motivated by few shortcomings of current Islamic home product as well as an increasing the number of shariah instrument contracts among Islamic banking in Malaysia. Islamic home financing in Malaysia can divided into two types, which is debt and equity. Bai bithaman ajil (bba) is the most marketable mode of home financing in Malaysia since 1983 but nowadays, many Islamic banks in Malaysia was accepted musyarakah mutanaqisah (mm) and tawarruq as an alternative to bai bithaman ajil. This study uses a qualitative approach. The paper would survey the practice on Islamic home financing in Malaysia base on debt since 2000 until 2016.

Consumer behaviour of Islamic home financing

PurposeThe purpose of this study is to examine the contributing factors that affect consumer behaviour of Islamic home financing in Malaysia. The effects of perceived religiosity on property, perceived Islamic debt principle and perceived maqasid on homeownership on consumer behaviour are examined. Furthermore, the effects of perceived religiosity and consumer behaviour on religious satisfaction are also investigated.Design/methodology/approachUsing the theory of Islamic consumer behaviour (TiCB) as a baseline theory identified from the literature, this study proposes a conceptual model of consumer behaviour of Islamic home financing in Malaysia. Data from the 205 usable questionnaires are analysed using partial least squares (PLS).FindingsThe PLS results suggest that perceived religiosity on property, perceived Islamic debt principle and perceived maqasid on homeownership are instrumental in determining consumer behaviour, thus revealing these factors as “Islamic factors” that represent the TiCB. Furthermore, the effect of consumer behaviour on religious satisfaction is also significant, implying that good behaviour makes people happier – seeking pleasure for doing well that is blessed and approved by Allah (S.W.T).Research limitations/implicationsTwo limitations are available for future studies. First, this study included only Malaysians in East Malaysia, suggesting that further testing of the proposed model should be conducted across different geographies to determine the generalisability of this study’s findings. Second, this study’s contributions are narrowed down to the factors examined. These limitations, however, provide directions for further future research.Practical implicationsThe results provide directions to bank managers to effectively manage Islamic home financing services for the benefit of their customers. Islamic home financing products tend to be used by consumers if the patronage factors investigated are considered more profoundly.Originality/valueThis study examines the behaviour of consumers of Islamic home financing using the proposed framework derived from TiCB.

Customer Intention on Islamic Home Financing Products: An Application of Theory of Planned Behavior (TPB)

Abstract Islamic home financing products are completely different from conventional home loan. Conventional home loan is based on lending and working on regime of interest which is prohibited by Shari’ah. This research aims to investigate the relationship between attitude, subjective norm, perceived behavioral control, level of knowledge or awareness and religiosity with customer’s intention in choosing Islamic home financing products. In addition, this study also hopes to identify the most influential factors that affect the customer’s intention in choosing Islamic home financing products. A total of 421 sets of questionnaires were returned by respondents among bank customers in Alor Setar, Kedah. The data was analysed using the Statistical Package for the Social Sciences (SPSS software version 18). The results of this study reveals that there is a significant relationship between attitude, subjective norm, perceived behavioral control, level of knowledge or awareness and religiosity with customer’s intention in choosing Islamic home financing products. This research also verifies that religiosity is the most important factor that affects the customer’s intention in choosing Islamic home financing products.

Inadequacy of Consumer Protection from Unfair Contract Terms in Musharakah Mutanaqisah Home Financing in Malaysia

Musharakah Mutanaqisah is one of the Islamic home financing products which has gained popular demand from the public in Malaysia. However, the terms and conditions of legal documentation of Musharakah Mutanaqisah Home Financing which were usually prepared by solicitors for Islamic financing institutions (“IFIs”) may have affected the welfare of consumers especially when most of the terms and conditions of legal documentations favoured the IFIs. In these circumstances, the consumers have no choice but to abide by the terms stipulated by the IFIs.This paper examines the adequacy of present legislation in Malaysia namely Islamic Financial Services Act 2013, Financial Services Act 2013, Shariah Standard and Guidelines: Prohibited Business Conduct policy, Consumer Protection Act 1999, Consumer Protection (Amendment) Act 2010 and the Contracts Act 1950 relating to unfair terms of contract in Musharakah Mutanaqisah Home Financing. The methodology adopted in this paper is statutory analysis whereby the relevant legislation are analysed. The analysis reveals that the legislation are not sufficient to regulate unfair terms of contract in Musharakah Mutanaqisah Home Financing in Malaysia. To ensure the protection of the consumers in Musharakah Mutanaqisah Home Financing, this paper recommends the present legislation, particularly Consumer Protection Act 1999 and Contracts Act 1950 be reformed. Musharakah Mutanaqisah Home Financing, reform, legislation, standard form of contract.

Crowdfunding and the Opportunity Presented in the American Islamic Home Financing Product

The shifting paradigm of the primary Islamic Banking product in America, the Shariah-compliant home financing product, has fallen into a developmental conundrum. In an attempt to capture a larger segment, current Shariah-compliant schemes evolved to that which are void of Islamic attributes, fundamentally converging with that of the convention in function, form, and procedure. Correspondingly, a recent phenomenon in the present financial landscape, crowdfunding, has demonstrated an overwhelming resemblance to the teachings and methodology of Islam. This paper identifies the opportunity to create a home finance product centered around a non-interest bearing marketplace lending platform capitalizing on the pairing of respective attributes present in crowdfunding and Islamic Finance. Crowdfunding offers such attributes as cooperation, consultation, and altruism, while Islamic Finance offers such attributes as non-interest bearing, dissuading of debt, and conservative loan terms while being unambiguous. While hindrances to the implementation of such a model definitely do exist, such as the relatively high value of real estate and risk of default, the crowdfunding platform offers a resolution and could evolve the next generation of the Islamic home finance product to one fully compliant with Islamic teachings. Ultimately, Islamic home finance product developers are urged to advance the development of products that incorporate the innate Islamic attributes found in crowdfunding platforms.

Consumer acceptance of Islamic home financing

Purpose– This study aims to examine the factors influencing the consumer acceptance on Islamic home financing products amongst clients of Islamic banks. For the purpose, the study extends the theory of planned behaviour (TPB) in explaining the Islamic home financing adoption along. Further, the study also intends to analyze the effects of “Islamicity of product” and seven demographic factors on the consumer acceptance of Islamic home financing products.Design/methodology/approach– Using the TPB model as a baseline theory, data are collected from bank customers in East Malaysia involving two cities, namely, Kota Kinabalu and Labuan, using self-administered questionnaires. A total of 300 questionnaires are distributed; however, only 278 are found usable. We use ordered probit model to analyze the effects of attitude, subjective norm, perceived behavioural control, Islamicity of product and demographic factors.Findings– Using the ordered probit model, this study finds that attitude, subjective norm, perceived control and Islamicity of product are instrumental in determining the consumer acceptance of Islamic home financing products. Concerned with demographic items, the study finds that marital status, ethnic, occupation and religion are influential. It is also discovered, however, that gender, academic qualification and monthly income have little effects on the consumer acceptance.Research limitations/implications– Three limitations are available for future studies. First, the current work does not include the experienced users who patronize Islamic home financing products. Second, the contribution of the present study is confined to the analyzed explanatory variables. Third, this study also has geographical constraint in which it is conducted in East Malaysia whilst samples from West-Malaysia are overlooked. These limitations, however, provide directions for further future research.Practical implications– Essentially, this study is a pioneering effort in applying the TPB model to the new context of Islamic home financing products in Malaysia. The study integrates the effects of Islamicity of product and demographic factors on the consumer acceptance on Islamic home financing products. The TPB model is proven valid and is reliable in predicting the consumer acceptance on Islamic home financing products.Originality/value– This study introduces Islamicity of product and demographic factors in explaining the consumer acceptance on Islamic home financing products. Most fundamentally, this study proposes a modified theoretical framework that is of paramount importance to predict the demand of Islamic home financing products in the future.

An integrative approach for understanding Islamic home financing adoption in Malaysia

Purpose – The purpose of this paper is to investigate the effects of subjective norm, relative advantage, simplicity, compatibility and perceived behavioural control on the Islamic home financing adoption. It also examines the effects of subjective norm, relative advantage, simplicity and compatibility on attitude. Analyses of attitude as a mediating factor are also provided. Design/methodology/approach – Survey data from 237 usable questionnaires are employed to test the hypothesized relationships. The proposed hypothesized relationships are examined using partial least squares (PLS). Similarly, PLS is also extended to analyse attitude as a potential mediator for the relationships between subjective norm, relative advantage, simplicity and compatibility with the Islamic home financing adoption. Baron and Kenny's (1986) procedure is used to evaluate the role of attitude as a potential mediating factor in the research's framework. Findings – This study discovers an integrative approach that is valid in the case of Islamic home financing. The paper's results, however, have not supported the effect of compatibility on attitude towards Islamic home financing preference and it is also reported that attitude does not mediate for the relationship between compatibility and the Islamic home financing adoption. Research limitations/implications – This study, however, suffers from three limitations which further stimulate new researches in this area. First, this research does not consider additional measures to capture Islamic home financing adoption. Second, this study discovers attitude does not mediate the relationship between compatibility and the Islamic home financing adoption. Third, there is a possibility that attitude also serves as a moderator, however, but it is presently unconsidered. Practical implications – This study has several implications for Islamic banks to develop proper planning for Islamic home financing products. Those implications are provided. Originality/value – This study is the first research in Islamic home financing's area to integrate two models namely the theory of planned behaviour (the TPB) and the innovation diffusion theory (the IDT) in a single research in order to expound Islamic home financing adoption. This study contributes to the literature by examining an integrative approach for understanding Islamic home financing adoption in Malaysia.