Adoption of Islamic Banking: A Comparative Analysis of the Moderating Effect of Religiosity and Islamicity of Product in the Base of Pyramid Markets of Pakistan

Abstract

The purpose of this research study is to examine the comparative explanative power of religiosity and Islamicity of product as moderators in the Base of Pyramid markets of Pakistan to predict the adoption Islamic financial inclusions of Islamic banking. Quantitative research approach using the technology acceptance model drawn from the theory of reasoned action as theoretical framework has been used for this research. The direct effect of the perceived ease of use, perceived usefulness with comparative moderations of Islamicity of the product and religiosity on the adoption of Islamic banking using the SEM approach. Measures of the study were collected from a sample of 300 Islamic bank customers on a structured questionnaire adopted from the earlier studies. The results of the study revealed that the perceived ease of use and perceived usefulness directly proportionate to the adoption of Islamic banking base of pyramid market of Pakistan. The comparative moderating statistical computation analysis attested significant moderation of Islamicity of the product than the religiosity. The respondents of this research study were selected who have at least used the Islamic Banking once, thus, the response of the customers may be based on the one key element, association, social influence and or perceptions. The study is cross-sectional in the BOP market of Islamic financial system; therefore, results, interpretations and conclusion may not be generalized in other financial systems and settings. Islamicity of product and religiosity were found to have a significant influence in moderating the adoption of Islamic financial inclusions in the BOP. The highest r2 value of Islamicity of product in strengthening the adoption of Islamic Bank-Customers should be focused. The potential customers must be explained about the just-based features of Islamic Banks with comparative analysis of line of differences with that of the conventional banks. The marketing strategies of the Islamic banks should increase the outreach of these financial inclusions by adding relevant information consistent with the customer perceptions, influence of the religiosity and Islamicity of product in the adoption of Islamic banking among the customers in the low-income market of Pakistan.