Customers’ Perception of Non-interest Banking Services by Deposit Money Banks: Evidence fromNigeria

Danjuma, Ibrahim; Kumshe, Hauwa Modu; Daneji, Bashir Ahmad; Ibrahim, Abdullateef Kola

doi:10.15640/jibf.v3n2a6

Cited by 5 publications

(8 citation statements)

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“…There has been a considerable increase in IB and finance literature in recent times by scholars and practitioners. While much of the literature on IB is limited to Islam-dominated or Islamic countries (Amin et al, 2011;Echchabi and Nafiu Olaniyi, 2012;Kaabachi and Obeid, 2016;Loo, 2010;Souiden and Rani, 2015), very little research attention has been given to IB in the SSA context (Danjuma et al, 2015;Jinjiri Ringim, 2014). IB was unheard of in non-Muslim countries, and it was considered a wishful thinking by those who desired to engage in banking that was in accord with Islamic principles.…”

Section: Introductionmentioning

confidence: 99%

Determinants of Islamic banking adoption in Ghana

Mbawuni

Nimako

2017

IMEFM

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Purpose This study aims to examine factors affecting the adoption of Islamic banking (IB), which is an innovative and emerging form of banking, in a non-Islamic Sub-Saharan African (SSA) country. Design/methodology/approach It used primary data collected from a cross-section of 975 respondents using self-administered structured questionnaire. Empirical data were analysed using SPSS version 16 and partial least squares structural equation modelling (PLS-SEM) for Muslim and non-Muslim groups. Findings Consumer attitude, readiness to comply with Sharia law, knowledge, perceived innovativeness and perceived benefits were critical determinants of bank customers’ intention to adopt IB in both Muslim and non-Muslim sub-groups. The least influential factors were perceived religion effect (PRE) and perceived threat of violence (PTV). PTV was not a significant factor to non-Muslims, but it was a significantly negative factor to Muslims’ intentions to adopt IB. PRE has a positive influence on Muslims’ intention to adopt IB, but it has a negative effective on non-Muslims’ adoption intentions. Research limitations/implications This study is limited to only bank customers in Ghana. Moreover, service quality factors were not included in the research model because IB is yet to be given full-fledged operational license in Ghana. Future research should extend the study to other emerging countries to improve the generalizability of the findings. Practical implications Policymakers are encouraged to develop stakeholder-oriented strategies to promote effective consumer education in IB. Also, IB institution should endeavour to develop innovative financial products that are Sharia-compliant and economically beneficial to individual and business needs of bank customers. Moreover, policymakers and management of IB institutions should ensure effect governance structures to guide IB operations. Originality/value This study provides initial structural equation modelling of determinants of IB adoption in emerging countries and provides empirical evidence on the spread of IB in non-Islamic SSA, which is an under-researched area. It is the first study to empirically report on the influence of PTV, readiness to compliance Sharia law and perceived innovativeness of IB on intentions to adopt IB in non-Islamic SSA context.

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Section: Introductionmentioning

confidence: 99%

Determinants of Islamic banking adoption in Ghana

Mbawuni

Nimako

2017

IMEFM

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“…However, it has been observed that, much of the literature on IB is limited to Islam dominated or Islamic countries (Iqbal and Molyneux, 2006;Manzoor and Amanaullah, 2010;Echchabi and Abdul-Aziz, 2012). Few studies have examined customer perception of IB in Sub-Saharan Africa context (Danjuma et al, 2015;Fada and Wabekwa, JIABR 9,3 2012;Jinjiri, 2014). As a result, there is very limited research on IB in non-Islamic countries such as Ghana.…”

Section: Introductionmentioning

confidence: 99%

Muslim and non-Muslim consumers’ perception towards introduction of Islamic banking in Ghana

Mbawuni

Nimako

2018

JIABR

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PurposeThis study aims to examine consumer perception of introduction of Islamic banking (IB) in Ghana, which is a new and emerging form of banking in many non-Islamic countries. Design/methodology/approachEmpirical field data were collected from a sample of 975 respondents using self-administered structured questionnaire. Descriptive analysis was conducted using SPSS version 16. FindingsMuslim respondents have significantly positive perceptions of IB compared to non-Muslims and have stronger intentions to adopt IB in Ghana than non-Muslims. Non-Muslims have high perceived benefit of IB. Non-Muslim respondents do not perceive potential threat of violence associated with the introduction of IB in Ghana. Although non-Muslims perceive IB that would make Islam popular, they do not perceive it as a means of Islamizing bank customers. Relatively, non-Muslims appear to have low knowledge of IB, unfavourable attitude towards IB, are reluctant to comply with Sharia law and consequently have weaker intentions to adopt IB. Research limitations/implicationsThis study was limited to descriptive analysis and to only Ghana. Future research should quantitatively model IB adoption and switching factors using samples from other developing countries. Practical implicationsIB institutions could focus on attracting a niche of Muslim consumers at its initial stages. Moreover, to facilitate the introduction of IB, the Bank of Ghana and other relevant stakeholders, in addition to establishing effective governance structures, must promote consumer education to enhance consumer knowledge of IB and correct misconceptions about IB among consumers, particularly non-Muslim customers. Originality/valueOne unique contribution of this study is that it provides an initial empirical exploration of consumers’ attitude and perceptions of IB in Ghana, which is an under-researched area.

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“…Thus, Islamic banking in Nigeria is becoming household name (Danjuma et al , 2015). Hence, Garba (2014) argues that Islamic bank operators should emphasise on justice, equality, trust, honesty, non-prejudice, mutual gain, non-wastage and fulfilling of responsibility as the matters that must be adhered to gain customers.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Interestingly, Islamic bank is almost in all geopolitical zones but in few states of Nigeria (Jaizbank, 2015; Ezeh and Nkamnebe, 2019). Specifically, Islamic banking is somewhat gaining prominence in northern Nigeria (Danjuma et al , 2015).…”

Section: Introductionmentioning

confidence: 99%

“…On the other hand, Iqbal et al (2018) argue that Islamic bank has special nature that is different from conventional banks. On that note, Islamic bank in Nigeria faces regulation and religious challenges (Ezeh and Nkamnebe, 2019; Ezeh and Nkamnebe, 2018; Danjuma et al , 2015). Therefore, the survival of Jaiz Bank, the only Islamic bank in Nigeria, is in doubt.…”

Section: Introductionmentioning

confidence: 99%

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Islamic bank selection criteria in Nigeria: a model development

Ezeh¹,

Nkamnebe

2019

JIMA

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Purpose The purpose of this study is to develop a model for the study of Islamic bank choice and to test the significant importance of the constructs that influence bank customers to choose Islamic bank in a pluralistic-secular nation. Design/methodology/approach Total of 348 conventional and Islamic bank customers were sampled. Five-point Likert-type question containing 27 bank selection items was used in collecting primary data. Cronbach’s alpha, composite reliability and average variance extracted are used to test the reliability and validity of the instrument. Also various descriptive statistics, exploratory factor analysis and one sample T-test are equally used in analyzing the work. Findings Exploratory factor analysis identified four factors. They are Islamic ethics, convenience, Islamic bank services awareness and physical evidence. Furthermore, the factors that show significant importance in the choice of Islamic banking are Islamic ethics and Islamic bank services awareness. The result equally shows that people are aware of Islamic banking. Practical implications This study provides insight on the factors that influence the selection of Islamic banking, an innovative banking concept. This study has obvious management and theory implications. Also, the study will assist the bank managers in developing effective marketing strategy to increase the market share. Originality/value This study reports Islamic banking selection criteria in a pluralistic-secular Nation. The study also developed a model that can be used in studying the choice of Islamic bank in special type of environment. Thus, Islamic banking is a new reality in the Nigerian financial scene.

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Customers’ Perception of Non-interest Banking Services by Deposit Money Banks: Evidence fromNigeria

Cited by 5 publications

References 0 publications

Determinants of Islamic banking adoption in Ghana

Determinants of Islamic banking adoption in Ghana

Muslim and non-Muslim consumers’ perception towards introduction of Islamic banking in Ghana

Islamic bank selection criteria in Nigeria: a model development

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