Abstract
Islamic microfinance banks are generally known for promoting financial and social inclusion, especially in areas with low level of financial access resulting from either voluntary or non-voluntary factors. This paper, thus, examined the determinants of intention to adopt Islamic microfinance (IMF) in Nigeria, and the moderating role of religiosity between the constructs. The paper employed the proportionate stratified random sampling technique to collect data from 450 respondents, using close-ended questionnaires. The data was analyzed using Analysis of Moment Structures-Structural Equation Modeling (AMOS-SEM). The decomposed theory of planned behavior (DTPB) was used as the underlying theory to test six hypotheses. Results showed that intention to adopt Islamic microfinance is high in Nigeria, and attitude, subjective norm and perceived behavioral control were positive and significant in influencing the intention to adopt Islamic microfinance. Furthermore, religiosity was found to moderate the relationship between subjective norms and behavioral intention. Consequently, the study recommends the need for stakeholders in the Nigerian financial system to enhance advocacy aimed at improving public attitude towards Islamic microfinance banks. On their part, Islamic microfinance banks Islamic microfinance banks needs to expand their marketing operations, in order to promote adoption and social inclusion. Overall, the study provided additional insights to the growing literature of Islamic finance in Nigeria, which will assist in shaping Islamic microfinance policy. The study also showed the role of referents among highly religious people, in influencing the behavioral intention to adopt Islamic microfinance.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Similar content being viewed by others
References
Adeyemi, A.A., Mustafa, D., Oladipo, S.L.: A second-order factor gender-measurement invariance analysis of financial exclusion in Ilorin, Nigeria. Int. J. Trade Econ. Finance 4(6), 398–402 (2013). https://doi.org/10.7763/ijtef.2013.v4.325
Ajetunmobi, A.T., Ibrahim, N., Hamid, S.A.: A multigroup structural equation modeling approach to moderating the influence of religion on the adoption of Islamic home financing. Int. J. Bus. Econ. Law 17(1) (2018)
Ajzen, I.: The theory of planned behavior. Organ. Behav. Hum. Decis. Process. 50, 179–211 (1991)
Ajzen, I.: The theory of planned behavior. In: Lange, P.A.M., Kruglanski, A.W., Higgins, E.T. (eds.) Handbook of Theories of Social Psychology, pp. 438–459 (2012). https://doi.org/10.4135/9781446249215.n22
Albashir, W.A., Zainuddin, Y., Panigrahi, S.K.: The acceptance of Islamic banking products in Libya: a theory of planned behavior approach. Int. J. Econ. Financ. Issues 8(3), 105–111 (2018)
Ali, A., Elrahman, S.: Islamic microfinance: moving beyond financial inclusion. Eur. Sci. J. 11(10), 313–326 (2015)
Aziz, S., Afaq, Z.: Adoption of Islamic banking in Pakistan an empirical investigation adoption of Islamic banking in Pakistan an empirical investigation. Cogent Bus. Manag. 5(1), 1–18 (2018). https://doi.org/10.1080/23311975.2018.1548050
Banunaku, J., Kasera, M., Ssekiziyivu, B., Kimuli, S.N.L.: Attitude: mediator of subjective norm, religiosity and intention to adopt Islamic banking. J. Islam. Mark. 11(1), 81–96 (2020). https://doi.org/10.1108/JIMA-02-2018-0025
Bryne, B.M.: Structural Equation Modeling with AMOS: Basic Concepts, Applications and Programming (Second). Routledge, New York (2010)
Central Bank of Nigeria: Guidelines for the Regulation and Supervision of Non-Interest (Islamic) Microfinance Banks in Nigeria. Abuja, Nigeria: Central Bank of Nigeria (2017)
Central Bank of Nigeria: National Financial Inclusion Strategy (Revised), pp. 1–79 (2018). https://www.cbn.gov.ng/
Central Bank of Nigeria: The National Financial Inclusion Strategy - Annual Report 2018. Abuja, Nigeria (2019)
Echchabi, A., Azouzi, D.: Predicting customers’ adoption of Islamic banking services in Tunisia: a decomposed theory of planned behaviour approach. Tazkia Islam. Financ. Bus. Rev. 9(1) (2015)
Farouk, A.U., Md Idris, K., Saad, R.A.J.B.: Moderating role of religiosity on zakat compliance behavior in Nigeria. Int. J. Islam. Middle East. Finance Manag. 11(3), 357–373 (2018). https://doi.org/10.1108/IMEFM-05-2017-0122
Gangwal, N., Bansal, V.: Application of decomposed theory of planned behavior for M-commerce adoption in India. In: 18th International Conference on Enterprise Information Systems, vol. 2, pp. 357–367 (2016)
Hair, J.F., Hult, G.T.M., Ringle, C.M., Sarstedt, M.: A Primer on Partial Least Squares Structural Equation Modeling (PLS-SEM) (Second). SAGE Publications Inc., Los Angeles (2017)
Hassan, A.: Financial inclusion of the poor: from microcredit to Islamic microfinancial services. Humanomics 31(3), 354–371 (2015). https://doi.org/10.1108/H-07-2014-0051
Hooper, D., Coughlan, J., Mullen, M.R.: Structural equation modelling: guidelines for determining model fit. Electron. J. Bus. Res. Methods 6(1), 53–60 (2008). https://doi.org/10.21427/D79B73
Hussein, M.M., Ehab, W.K.A.-Y., El-Bassiouny, A.-A.N.: Effects of religiosity on consumer attitudes toward Islamic banking in Egypt. Int. J. Bank Mark. 33(6), 1–32 (2015)
Maulana, H., Razak, D.A., Adeyemi, A.A.: Factors influencing behaviour to participate in Islamic microfinance. Int. J. Islam. Middle East. Finance Manag. 11(1), 109–130 (2018). https://doi.org/10.1108/IMEFM-05-2017-0134
Muhammad, A.D., Haneef, M.A., Mohammed, M.O.: Intention to use the Islamic micro-investment model in Nigeria: empirical evidence. Int. J. Plur. Econ. Educ. 7(3), 283–299 (2016)
Muhammad, T., Dauda, S.A., Mamman, D.: The contemporary Islamic banking system (Jaiz Bank) in tackling financial exclusion in Nigeria. Int. J. Islam. Econ. Finance Studies 4(1), 24–40 (2018). https://doi.org/10.25272/j.2149-8407.2018.4.1.02
Nabi, G., Islam, A., Bakar, R., Nabi, R.: Islamic microfinance as a tool of financial inclusion in Bangladesh. ResearchGate Publication (April), pp. 25–53 (2017). https://doi.org/10.12816/0051154
Nugroho, A.P., Hidayat, A., Kusuma, H.: The influence of religiosity and self-efficacy on the saving behavior of the islamic banks. Banks Bank Syst. 12(3), 35–47 (2017). https://doi.org/10.21511/bbs.12(3).2017.03
Oladapo, I.A., Omar, N., Muda, R., Abdurraheem, A.A.: The mediating effect of attitude on customers’ behavioural intention to participate in Islamic banking: empirical evidence. Int. J. Financ. Res. 10(5), 167–180 (2019). https://doi.org/10.5430/ijfr.v10n5p167
Ozturk, H.: Behavioral Aspects of Religiosity in Finance: A Brief Survey on Conventional versus Islamic Finance (2020)
Pandey, P., Pandey, M.M.: Research Methodology: Tools and Techniques. Bridge Center, Romania (2015)
Ramakrishna, S., Trivedi, P.: What determines the success of financial inclusion? An empirical analysis of demand side factors. Rev. Econ. Finance 14(4), 98–112 (2018)
Rhule, K.: Islamic Microfinance: A Vehicle for Promoting Financial Inclusion. University of Chicago Law School International Immersion Program Papers, p. 21 (2016)
Sekaran, U., Bougie, R.: Research Methods for Business: A Skill Building Approach, 7th edn. Wiley, UK (2016)
Setayesh, M.H., Momtazian, A., Rajabdoory, H.: Investigating the relationship between religious attitude and perceptual errors in stock exchange investors. Int. J. Manag. Financ. Account. 2(5), 39–50 (2017)
Shih, Y.-Y., Fang, K.: The use of a decomposed theory of planned behavior to study Internet banking in Taiwan. Internet Res. 14(3), 213–223 (2004). https://doi.org/10.1108/10662240410542643
Suhr, D.: The Basics of Structural Equation Modeling, pp. 1–19 (2006)
Taherdoost, H., Sahibuddin, S., Jalaliyoon, N.: Exploratory factor analysis; concepts and theory 2 factor analysis 3 types of factor analysis 4 exploratory factor analyses. 375–382 (2004)
Taylor, S., Todd, P.A.: Understanding information technology usage: a test of competing models. Inf. Syst. Res. 6(2), 144–176 (1995)
Thambiah, S., Ismail, H., Ahmed, E.M., Khin, A.A.: Islamic retail banking adoption in Malaysia: the moderating effect of religion and region. Int. J. Appl. Econ. Finance 7, 37–48 (2013). https://doi.org/10.3923/ijaef.2013.37.48
Ucar, A.M.: A research on consumer behavior towards interest-free financing with special reference to planned behavior theory: an empirical analysis. J. Econ. Policy Res. 7(1), 69–88 (2020). https://doi.org/10.26650/JEPR652338
Weston, R., Gore, P.A., Jr.: A brief guide to structural equation modeling. Couns. Psychol. 34(5), 719–751 (2006). https://doi.org/10.1177/0011000006286345
Yong, A.G., Pearce, S.: A beginner’s guide to factor analysis: focusing on exploratory factor analysis. Tutor. Quant. Methods Psychol. 9(2), 79–94 (2013)
Zaid, Z.: Attitudes towards Islamic banks: the impact of religiosity and the moderating role of trust. Int. J. Account. Finance Rev. 4(2), 29–36 (2019)
Zauro, N.A.: The Determinants of Intention to Accept Islamic Finance Products in Nigeria: The Moderating Effects of Financial Inclusion (September) (2017)
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Appendix
Appendix
Appendix 1: Convergent and Discriminant Validity
Rights and permissions
Copyright information
© 2023 The Author(s), under exclusive license to Springer Nature Switzerland AG
About this paper
Cite this paper
Abdullahi, A., Othman, A.H.A., Kassim, S.H. (2023). Promoting the Adoption of Islamic Microfinance in Nigeria: The Moderating Role of Religiosity. In: Alareeni, B., Hamdan, A., Khamis, R., Khoury, R.E. (eds) Digitalisation: Opportunities and Challenges for Business. ICBT 2022. Lecture Notes in Networks and Systems, vol 621. Springer, Cham. https://doi.org/10.1007/978-3-031-26956-1_57
Download citation
DOI: https://doi.org/10.1007/978-3-031-26956-1_57
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-031-26955-4
Online ISBN: 978-3-031-26956-1
eBook Packages: EngineeringEngineering (R0)