Choice Criteria for Halal Financing: Religiosity as Mediator

Abstract

This paper aims to examine the factors of Muslims' intention toward halal financing by considering religiosity as a mediator. The data were collected through a survey of 220 Muslims in Malaysia and were analyzed using the Structural Equation Modelling (SEM) technique. The returned survey was N=211, and the results showed that attitudes and subjective norms positively affect the intention to use halal financing. Religiosity has a mediation effect on the intention to use halal financing. Managers and marketers of Islamic banks may benefit from the findings of this study, which provide insight into the factors that should be considered to promote halal financing. The findings contribute to the literature on halal financing products by demonstrating the drivers of intention to use halal financing. The study also extends the literature by testing the mediating role of religiosity. Furthermore, the study extends the Theory of Reasoned Action (TRA) in the context of halal financing by introducing religiosity as a potential driver of intention and mediator effect.