Modelling public behavioral intention to adopt Islamic banking in Uganda

Abstract

Purpose Islamic banking (IB) has resulted in abundant cross-border financial flows and diversified economic inter-linkages with over US$2tn in assets that have extended beyond Muslim countries to more established global financial centres and other emerging economies. Despite this remarkable diffusion, numerous developing and least-developed countries are yet to embrace IB. This study aims to examine the factors that determine public intention to adopt IB in Uganda. Design/methodology/approach This study undertook a quantitative approach where the theory of reasoned action (TRA) was used as a theoretical framework and structural equation modelling technique was applied to determine the relationship between attitude, subjective norm and public intention to adopt IB. Thus, a sample of 300 bank customers was surveyed using a questionnaire. Findings Initially, the measurement model did not fit the data well. So, the model was modified by removing an indicator with a lower loading. Finally, the structural model under maximum likelihood estimate analysis confirmed a good model fit for the data. Key findings were as follows: attitude positively influenced intention to adopt IB, whereas subjective norm influence to intention is mediated by attitude. Furthermore, public intention to adopt IB in Uganda can be predicted by attitude (R2 = 0.89) which also mediates the prediction of subjective norm to intention (R2 = 0.58). Originality/value To the best of the authors’ knowledge, no study has used the TRA on the feasibility and adoption of IB. Thus, the present study is relevant in extending the theoretical body of knowledge by validating the TRA in a new field.

Determinants of the intention to adopt Islamic banking in a non-Islamic developing country

“…The findings of this study are consistent with the findings of previous researchers; for example, Lujja et al (2016a), who found a positive relationship between attitude and behavioral intention to adopt Islamic banking. Similarly, Kaawaase and Nalukwago (2017) found that attitude is a significant predictor of patronizing Islamic banking in Uganda using existing bank account holders as respondents.…”

“…Previous studies on adoption of Islamic banking using evidence from Uganda suggest a number of determinants of adoption of Islamic banking (Lujja et al, 2016a;Lujja et al, 2016b;Kaawaase and Nalukwago, 2017;Lujja et al, 2018;Bananuka et al, 2019). In their study of modeling public behavioral intention to adopt Islamic banking in Uganda using the theory of reasoned action, Lujja et al (2016a) found that attitude influences behavioral intention to adopt Islamic banking in Uganda. The authors further found that subjective norm is not a significant predictor of behavioral intention to adopt Islamic banking but rather influences attitude toward the adoption of Islamic banking in Uganda.…”

Subjective Norms and Intention- A Study of Crowdfunding in India

“…Various authors studied the subjective norm on adopting banking and found it the most important factor in shaping the intention of people (Gumel et al 2015;Hanudin et al, 2014;Abduh et al, 2011). Lujja et al (2016) on the contrary found that the referent group has no significant influence on shaping the intention to adopt banking. Lajuni et al (2017) suggested that a person will perform a behavior as expected by the social group under the pressure of the same even he may not be in favor of doing the action.…”

Adoption of Internet Banking Services by Corporate Customers for Forex Transactions Based on the TRA Model

“…In a study conducted in Uganda by [18], the researchers looked to determine the behavioural intention to adopt Islamic banking using TRA as the framework. The authors chose to use structural equation modelling to determine the relationship between attitude, subjective norms and public intention to adopt Islamic banking.…”