Islamic Financial Literacy and Financial Behavior: The case of Muhammadiyah Community in Medan City

Gunawan, Ade; Asmuni, Asmuni; Siregar, Saparuddin

doi:10.18196/jai.v22i3.10043

Cited by 12 publications

(15 citation statements)

References 19 publications

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“…IFL). Some previous studies have provided insights on a firm relationship between IFL and financial behavior (Addury et al, 2020;Albaity and Rahman, 2019;Ali, 2021;Gunawan et al, 2021;Muslichah and Sanusi, 2019). Some findings were guided by the fact that the increase of financial literacy firmly correlates with anticipation of risk investment, the decision of better capital utilization and adoption of the Islamic financial products (Ali, 2021;Muslichah and Sanusi, 2019;Rozikin and Sholekhah, 2020).…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Examining Islamic capital market adoption from a socio-psychological perspective and Islamic financial literacy

Yusfiarto

Nugraha²,

Mutmainah³

et al. 2022

JIABR

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Purpose This study aims to explore the Islamic capital market adoption model, based on the construct of Islamic financial literacy (IFL), the theory of planned behavior (TPB) and past behavior (PBR) in the context of a Muslim-majority country (Indonesia). Design/methodology/approach To test the conceptual model, this study used data from 251 respondents with a diverse spectrum, and the partial least squares structural equation modeling technique was used to test the forecasting of the model. Findings Overall, IFL and TPB dimensions (i.e. attitudes and perceived behavioral control) have a significant positive effect, either directly or indirectly, for investment intentions in the Islamic capital market. Also, the findings recommend the construct of PBR as an important predictor of investment intentions in Islamic capital markets. Practical implications The study can be beneficially used for Islamic financial institutions to participate with the Indonesian government in affirming IFL to broader society, not only Islamic education institutions. It is related to the significance of IFL, where it can be utilized as an indicator that education on the concept and values of Islamic finance can positively establish attitudes in society and stakeholders. Originality/value This study is an effort to strengthen IFL as a key construct using a good measurement scale, in the context of the Islamic capital market investment. In addition, this study also provides the necessary impetus to analyze the relationship between the dimensions of TPB and PBR, either directly or indirectly.

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Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Examining Islamic capital market adoption from a socio-psychological perspective and Islamic financial literacy

Yusfiarto

Nugraha²,

Mutmainah³

et al. 2022

JIABR

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show abstract

“…Meanwhile, Fauziah et al (2020) defined Islamic financial behaviour in a broader sense that includes the behavioural elements of locating and selecting halal financial sources, financial planning, and fund allocation, which is consistent with (Setiawati et al, 2018). Gunawan et al (2021) go even further in their definition, including financial information management, saving, regulating consumption patterns, credit management, cash flow management, and investing. In some studies, the definition of Islamic financial behaviour can be inferred from the given text, whereas in others, the researcher must draw our own conclusions about what the author means by Islamic financial behaviour based on the financial behaviour aspects discussed.…”

Section: Conceptualizing Islamic Financial Behaviourmentioning

confidence: 99%

“…Shari'ah-compliant financial arrangement is more than just making money and avoiding losses; it is a fortress that stands between heaven and hell. Thus, the term "Islamic financial behaviour" is increasingly being used in Islamic finance studies to denote financial conducts that adhere to Islamic principles (Dinc et al, 2021;Gunawan et al, 2021).…”

Section: Introductionmentioning

confidence: 99%

Conceptualizing the Influence of Religiosity and Islamic Financial Knowledge on Islamic Financial Behaviours

Nawi¹,

Aziz²,

Shahwan³

2022

IJARBSS

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Studies of human behaviours have been conducted extensively and continuously in order to gain better understanding on how people make decisions. For Muslims, the behaviour must not deviate from the principles, demands, and standards set by Shari'ah. In the context of financial behaviour, Muslims are significantly influenced by their religious belief, particularly in distinguishing between halal (permissible) and haram (impermissible), as well as restrictions in financial dealings. Hence, Muslims are required to have a meticulous understanding of the subjects, as Shari'ah has established distinct guiding principles in financial arrangements. This paper aims to analyse the existing Islamic financial literacy literature by conceptualizing the influence of religiosity and Islamic financial knowledge on Muslim's financial behaviours. A literature review has been undertaken for the conceptual development. The association between Islamic financial knowledge, religiosity, and Islamic financial behaviour has been established, laying the groundwork for future research. Islamic financial knowledge and religiosity have both been demonstrated to be significant in capturing Islamic financial behaviours and are therefore indispensable components of Islamic financial literacy. This paper expands the literature by increasing our understanding of Islamic financial literacy among Muslims. The findings of this study could offer the related bodies in financial knowledge and literacy like the Organisation for Economic Co-operation and Development (OECD) for international level and local agency in Malaysia like the Credit Counselling and Debt Management Agency (AKPK) with a new perspective on Muslims' financial behaviour, by considering the role of religion and Islamic financial knowledge in order to develop effective and relevant strategies to improve financial literacy among Muslims.

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“…From the facts above, it can be concluded that after the issuance of the MUI fatwa in 2003 concerning the illegitimate interest of banks, it did not have a significant impact on the Another factor that causes Muslims to not respond to the MUI fatwa is that the Muslim community has already been guided by the first bank interest law is khilafiyah (Fuad, Fakhrina, Aziz, & Rosyid, 2013). The controversy surrounding bank interest is inseparable from the discourse of usury, whether the addition (interest) falls into the category of usury or not being part of usury (Balz & Saeed, 2000;Gunawan, Asmuni, & Siregar, 2021). Some scholars and scholars have long discussed the issue, but there is no clear agreement yet.…”

Section: Introductionmentioning

confidence: 99%

“…Some scholars and scholars have long discussed the issue, but there is no clear agreement yet. On the one hand, some say that bank interest is the same as usury and on the other hand, some consider it not to belong to the category of usury (Balz & Saeed, 2000;Gunawan et al, 2021).…”

Section: Introductionmentioning

confidence: 99%

Islamic Financial Literacy Amongst Muslims and Loyalty to Fatwas

2022

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This study aims to determine the extent of the financial literacy of the Muslim community in Ponorogo and their loyalty to the bank interest fatwa. This paper uses a field research approach using data collection methods in the form of interviews and observations and the analysis techniques used are descriptive-inductive. Based on the analysis of the data obtained, the following conclusions were found: 1. The perception of Ponorogo Muslims is divided into no types, namely agreeing with bank interest fatwas, doubting the existence of bank interest fatwas, and ignoring the provisions of bank interest fatwas. 2. The factors influencing the observance of Ponorogo Muslims are classified into 2 categories, namely those who obey which are divided into observance based on religious values (obedience) and obedience based on religious-rational considerations (internalization observance). Then those who disobey are caused because their legal awareness is still very weak, the causative factor is the nature of the fatwa itself and some of the following: (a) There is still difficult access to Islamic banking in their area; (b) Islamic bank services that tend to be the same as conventional banks; (c) Conventional banks and Islamic banks are practically considered to be no different, both of which have not adhered to sharia principles; 3. By behavioral finance analysis, it is found that (a) Those who agree with fatwas based on religious-rational values are not found any element of bias in them. (b) who doubts that there is an element of bias in the form of overconfidence with the initial information so as not to follow the development of the next information (bias anchoring). And those who ignore fatwas have no element of bias in them because they are supported by the fact that bank interest fatwas have no significant effect on the provisions of fatwas.

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Islamic Financial Literacy and Financial Behavior: The case of Muhammadiyah Community in Medan City

Cited by 12 publications

References 19 publications

Examining Islamic capital market adoption from a socio-psychological perspective and Islamic financial literacy

Examining Islamic capital market adoption from a socio-psychological perspective and Islamic financial literacy

Conceptualizing the Influence of Religiosity and Islamic Financial Knowledge on Islamic Financial Behaviours

Islamic Financial Literacy Amongst Muslims and Loyalty to Fatwas

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