Understanding of account holder in conventional bank toward Islamic banking products

• Main Author: Ringim, Kabiru Jinjiri
• Format: Article
• Language: English
• Published: IDOSI Publications 2013
• Subjects: HG Finance
• Online Access: http://repo.uum.edu.my/9437/1/2.pdf; http://repo.uum.edu.my/9437/; http://dx.doi.org/10.5829/idosi.mejsr.2013.15.2.2251

The objectives of this study are to determine the level of understandings of a Muslim account holder’s in a conventional bank toward Islamic banking products and 2) To determine the relationship between the understanding levels of Muslim account holder’s and their decision to patronize an Islamic banking. Understanding factor is operationalised as the extent of the deeper level of knowledge, grasp or comprehension of Islamic bank products to patronized Islamic bank products and services.The study was exploratory survey research conducted in Kano-Nigeria.The samples were drawn from employees of public and private sector using proportionate stratified random sampling techniques.500 questionnaires distributed by hand delivery and 304 were returned in which 286turnout to be usable for our data analysis using SPSS and PLS Modelling Software.The findings are: first, the means for understanding variable was 5.01 with standard deviation of 0.9136.This indicates the level of understanding of Islamic products by Muslim account holders in a conventional bank.Second, the result of the composite reliability and Cronbach alpha of the Understanding was 0.855 and 0.77.Patronize an Islamic banking product was 0.8494 and 0.7348 respectively thus, exceeded the threshold of 0.7.The average variance extracted of the Understanding stood at 0.597 and Patronize an Islamic banking product was 0.6538 respectively greater than 0.5.The correlations of the Understanding and Muslim account holder decision to Patronize an Islamic banking product was less than the square root of the average variance extracted that verifies the adequacy of the construct discriminant validity.The R-square value was 0.439787, which suggest that the model explain 43.97% of the variance of the Muslim account holder’s decision to Patronizes Islamic bank products and Understanding are positively related (beta = 0.663165; p<0.001).The implication for this study is for the Islamic banking to focus on the people’s understandings of Shariah position on business transaction, a concept of profit and loss sharing practice, a benefit of Islamic banking products and investment based on Islamic financing structure as well as good understanding of Islamic banking theory and practice that would have an impact on customer decision. Organization that listens and understands customer needs are in better position on the market. The necessary suggestions regarding future research were recommended.