A Research on Consumer Behavior Towards Interestfree Financing with Special Reference to Planned Behavior Theory: An Empirical Analysis

Abstract

This study seeks to empirically analyze the validity of consumer tendency/ behavior towards the interest-free financing models with reference to the planned behavior theory (PBT). Additionally, the research further tests the validity of the hypotheses on the consumer tendencies towards interest-free financing via PBT in Turkey and other predominantly Muslim countries. To this end, the main variables of the theory, attitude, subjective norm, and perceived behavioral control, have been redefined through certain factors spelled out in the literature. Subsequently, they have been analyzed through the Cronbach Alpha test in the relevant parts of the survey done with the participation of 235 persons. The study concludes that the attitude variable, redefined through the factors of desire for a fair financial system and cost advantage, determines the consumer behavior towards interest-free financial models. Additionally, it has also been observed that the avoidance from interest, one of the factors that define the subjective norm variable, underscores the consumer behavior towards these financial methods. However, the chi-square test results suggest that the subjective norm and perceived behavioral control variables do not provide consistent outcomes. Also, it can be said that the work is original due to a special reference to PBT in the sample of Turkey, even though it is similar to interest-free finance studies made with PBT.

Financial inclusion enhancement through the adoption of Islamic microfinance in Nigeria

“…The positive and significant result obtained between attitude and intention is also consistent with that obtained in several studies. These include Zauro (2017), Ajetunmobi et al (2018), Oladapo et al (2019) and Ucar (2020). Related to H1 are four exogenous latent variables that explain attitude.…”

“…Confirmatory factor analysis (CFA) on the other hand is conducted after the researcher established the relationship between the factors and observed variables through theoretical or empirical evidence. According to Tu et al (2019), SEM can be used to analyze connections among multiple causes and results and relationships among latent variables. It can also be used to simulate the internal logical relationships among multiple factors.…”

“…According to Tu et al (2019), SEM can be used to analyze connections among multiple causes and results and relationships among latent variables. It can also be used to simulate the internal logical relationships among multiple factors.…”