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Predictors of Islamic bank adoption: Nigerian perspective

Precious Chikezie Ezeh (Department of Business Administration, Federal University Gusau, Gusau, Nigeria)
Anayo Nkamnebe (Department of Marketing, Nnamdi Azikiwe University, Awka, Nigeria)

International Journal of Islamic and Middle Eastern Finance and Management

ISSN: 1753-8394

Article publication date: 22 September 2020

Issue publication date: 6 April 2021

283

Abstract

Purpose

The 2008 financial crisis that hit conventional banks provides a market opportunity for special types of banks. Furthermore, given the current financial reform for financial inclusion and economic concern of the Nigerian Government, there is a need for research on the adoption of Islamic banks. Accordingly, the purpose of this study is to determine the predictors of Islamic bank adoption in Nigeria.

Design/methodology/approach

Data is collected from 385 Islamic bank customers in northern Nigeria and is analyzed using the partial least square structural equation modeling technique.

Findings

The result reveals that trust, social influence, knowledge and government support have a significant positive relationship with the adoption of Islamic banks, while relative advantage and compatibility do not. The model (trust, social influence, knowledge, government support, relative advantage and compatibility) explained 50% of the variance in the adoption of Islamic bank.

Practical implications

These findings are very important to scholars, the policymakers and Islamic bank operators in designing their marketing strategies. It shows that trust, social influence, government support and knowledge are predictors of Islamic bank adoption.

Originality/value

This study extended the diffusion of innovation (DOI) theory by combining relative advantage, compatibility with trust, social influence, knowledge and government support to the model. The developed model is validated for the study of Islamic bank adoption in an emerging market, Nigeria. Arguably, it is the only study that test effect sizes (f2) and predictive relevance (Q2) of extended DOI on Islamic banks.

Keywords

Citation

Ezeh, P.C. and Nkamnebe, A. (2021), "Predictors of Islamic bank adoption: Nigerian perspective", International Journal of Islamic and Middle Eastern Finance and Management, Vol. 14 No. 2, pp. 247-267. https://doi.org/10.1108/IMEFM-01-2019-0035

Publisher

:

Emerald Publishing Limited

Copyright © 2020, Emerald Publishing Limited

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