Antecedents of Murabaha home financing among Muslim household – an integrated framework

Abstract

PurposeThough Murabaha financing experienced substantial growth in several majority-Muslim countries, its market share in the Moroccan banking industry is still very narrow than other conventional banks’ instruments. The current research investigated the ability of an extended theory of planned behavior (TPB) framework to explain the main drivers of attitude and intention to use Murabaha financing among Moroccan households. The moderating effect of Islamic religiosity was also scrutinized.Design/methodology/approachData were collected via a survey of 512 Moroccan consumers and analyzed using the partial least squares (PLS) technique.FindingsFirst, attitude toward Islamic banking products is a key predictor of consumer intention to use Murabaha financing. At the same time, consumers’ attitudes are influenced by Islamic financial literacy, subjective norms, behavioral control and profit and loss sharing. Islamic religiosity was also found to positively moderate the link between attitudes towards Islamic banking (IB) and intention to use Murabaha financing, e.g. positive attitudes toward IB are more likely to convert into an intention to use Murabaha financing among Muslim consumers with higher levels of religiosity.Managerial implicationsTo boost consumers’ intention to use Murabaha financing, Islamic bank managers should consider further investment in advertising to enhance consumers’ awareness about IB products. Islamic banks should also consider digital and social media marketing to increase consumers’ awareness about the products and spread a positive e-WOM with regards to their products. Our findings emphasize the importance of Islamic religiosity in shaping Muslim consumers’ intentions to use Murabaha financing. Islamic banks ought to make sure that Murabaha financing contracts are strictly adherent to and compliant with Shari’ah principles. They should also train their frontline employees on Islamic financing activities so that they can effectively respond to the queries and questions of Murabaha potential consumers.Originality/valueThe study findings contribute to the IB literature by demystifying the key factors shaping Muslim consumers’ intentions to use Murabaha financing. The study also extends the literature by emphasizing Islamic religiosity as a basis for Muslim consumers’ behavior in the context of IB. To the best of our knowledge, this study is among the first to empirically investigate Muslim consumers’ intention to use Murabaha financing in North Africa and the Arab countries.Peer reviewThe peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-10-2022-0680