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The intention to use Islamic banking: an exploratory study to measure Islamic financial literacy

Mohamed Albaity (Department of Finance and Economics, University of Sharjah, Sharjah, United Arab Emirates)
Mahfuzur Rahman (Department of Finance and Banking, University of Malaya, Kuala Lumpur, Malaysia)

International Journal of Emerging Markets

ISSN: 1746-8809

Article publication date: 1 August 2019

Issue publication date: 22 November 2019




Several research models have been proposed in the existing literature to understand the intention to use Islamic banking where conventional bank customers are not primarily addressed. Upon measuring the level of Islamic financial literacy (IFL) among the customers of conventional banks in the UAE, the purpose of this paper is to examine the direct and indirect effects of IFL, awareness, cost and benefit, reputation and attitude towards Islamic banking on the intention of potential customers to use Islamic banking.


Using judgmental sampling techniques, questionnaires were distributed to working individuals who did not have accounts with Islamic banks. A total of 350 completed and usable questionnaires were received and used for further analysis. The SmartPLS 3.0 software was used to analyse the data.


The results revealed that the level of IFL was high across the respondents and differed significantly as a function of gender, income level and years of work experience. The findings showed that IFL, awareness, reputation and attitude towards Islamic banking significantly influenced the intention to use Islamic banking, while cost and benefit appear not to. Interestingly, IFL was negatively correlated with the intention to use Islamic banking, but when the attitude towards Islamic banking mediated the relationship between IFL and the intention to use Islamic banking it then became positive.

Research limitations/implications

Future research should consider looking at non-Muslim economies, which might be more vulnerable to IFL. In addition, a comparison between the current customers of Islamic banks and potential customers might be relevant to see whether the IFL of the current customers differs from the new customers.

Practical implications

The implications of the research are twofold. First the study suggests that IFL is crucial for an Islamic bank’s potential new customers. Islamic bank managers should design and focus their policies toward enriching the knowledge of the public about Islamic banks and their products. Second, IFL alone does not lead to a higher level of intention to use Islamic banks unless there is a positive attitude towards such banks.


To the authors’ knowledge, this is one of the first studies to consider the IFL measure used in this paper. Therefore, this study will be the foundation for future research on IFL.



Albaity, M. and Rahman, M. (2019), "The intention to use Islamic banking: an exploratory study to measure Islamic financial literacy", International Journal of Emerging Markets, Vol. 14 No. 5, pp. 988-1012.



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