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Revisiting the concept of Islamic financial literacy in a boundaryless context: cross-country comparison of Islamic financial literacy

Yusuf Dinc (Department of Islamic Economics and Finance, Istanbul Sabahattin Zaim University, Istanbul, Turkey)
Mehmet Çetin (Department of Business Administration, Istanbul Sabahattin Zaim University, Istanbul, Turkey)
Rashed Jahangir (Department of Islamic Economics and Finance, Istanbul Sabahattin Zaim University, Istanbul, Turkey)

Journal of Islamic Accounting and Business Research

ISSN: 1759-0817

Article publication date: 14 February 2023

Issue publication date: 22 November 2023

302

Abstract

Purpose

There is a growing body of literature that recognizes the importance of Islamic financial literacy (IFL) while it is at the heart of our understanding of the overall financial system. To date, insufficient attention has been paid to Turkey, the Balkans and other potential Islamic finance hubs like Suriname. In fact, there have been no attempts to examine IFL in those regions or economies. The purpose of this paper is to test and validate the IFL scale developed by Dinc et al. (2021) in an international setting. By doing so, this study elaborates on possible antecedents and levels of IFL across countries and economic systems.

Design/methodology/approach

The design of the questionnaire used is based on the principles of Islamic finance and covers all the segments. The total number of collected observations is 3,579. This study uses the confirmatory factor analysis (CFA) to ascertain the factor structure and test the revised scale fit with the original form. Besides, IBM AMOS 25 Graphics is used for calculating the fit indexes for the scale.

Findings

The results from the CFA revealed that the scale has a good fit for its original and kept the four-dimensional structure. In addition, it also indicates that the predeveloped IFL scale is valid for different cultures, countries and individuals either having conventional or Islamic financial institutions preferences. Furthermore, results of empirical tests demonstrate that Turkey is significantly higher in Islamic financial awareness, whereas other countries' group is higher on all other subdimensions of the scale. On the other hand, female respondents indicate significantly higher levels of Islamic financial awareness, and male respondents show significantly higher levels of Islamic financial knowledge. Finally, the most prominent finding to emerge from the analysis is that the principles of Islamic finance are well accepted, except for some liberal views on the concept of “interest” (riba).

Research limitations/implications

Because of the diverse demography of the collected sample observations, this revised scale has a homogeneous set of implications. This IFL scale can accurately measure the level of IFL attained by an individual, group, society or nation, as well as suggest necessary actions based on its four-dimensional structure.

Originality/value

This study tests the IFL scale by considering two key elements: increased sample size and vast geographical coverage. To ensure that the developed scale is universal, this study took into account more than 3,000 observations from 28 different countries. These amendments ensure the uniqueness of this paper and its originality.

Keywords

Acknowledgements

Funding: This study was funded by Istanbul Sabahattin Zaim University under the following project: Islamic Financial Literacy in the Balkan countries.

Conflict of interest: On behalf of all authors, the corresponding author states that there is no conflict of interest.

Citation

Dinc, Y., Çetin, M. and Jahangir, R. (2023), "Revisiting the concept of Islamic financial literacy in a boundaryless context: cross-country comparison of Islamic financial literacy", Journal of Islamic Accounting and Business Research, Vol. 14 No. 8, pp. 1364-1382. https://doi.org/10.1108/JIABR-02-2022-0043

Publisher

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Emerald Publishing Limited

Copyright © 2023, Emerald Publishing Limited

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