BEYOND CONVENTIONAL FINANCE: WHAT SHAPES CONSUMER INTENTIONS TOWARD ISLAMIC PERSONAL FINANCING

Abstract

This study investigates the factors influencing customers in Pakistan to adopt Islamic personal financing using the Theory of Reasoned Action (TRA). The model includes two original components, attitude and subjective norm, along with four additional factors adapted from the research papers including pricing, religious obligations, perceived risk, and perceived image. Data was collected from 260 customers of Meezan and Faysal Banks through a structured survey, and Partial Least Squares Structural Equation Modeling (PLS-SEM) was used for analysis. The findings reveal that religious obligations, perceived image and attitude significantly influence customers’ intentions to use Islamic personal financing, with religious beliefs emerging as the strongest predictor. Contrary to initial expectations, pricing, perceived risk, and social influence were found to have no significant impact on intention. The model explains 58.4 percent of the variation in customer intention, highlighting that perceived image and attitudes matter more than peer pressure, cost, or risk perception. The study suggests that Islamic banks should prioritize aligning their products with religious values and fostering positive consumer attitudes to enhance adoption rates.