Knowledge and Perception of Muslim and Non-Muslim Customers in Papua Province Towards Islamic Banking

Abstract

In the past few decades, Islamic banking has gained popularity not only in Muslim countries but also in non-Muslim countries. This is due to the fact that the products and services provided by Islamic banking are not only intended for Muslims but also non-Muslims. As one of the largest Muslim population countries in the world, Indonesia has the potential to develop its Islamic banking. However, not all Indonesians have the same level of knowledge and perceptions about Islamic banking. Therefore, it will turn out to be an obstacle to Islamic banking growth in the future. This research is conducted to investigate the knowledge and perception of Muslim and non-Muslim about the products and services provided by Islamic banking in Papua Province, one of the regions in Indonesia with a minority Muslim population. Using the questionnaire to collect the data from 452 Muslim respondents and 231 non-Muslim respondents, the result showed that there is a correlation between religion and knowledge as well as religion and understandings of Islamic banking products, services, and operational activities. Furthermore, this study also reveals that both Muslims and non-Muslims have a good and positive perception of Islamic banking.

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“…Knowledge encompasses all information that consumers have regarding various types of products and services, as well as additional knowledge linked to these items and services and information related to their functions as consumers (Rachmawati, 2018). Each person has a different level of Islamic financial literacy, including awareness of Islamic financial product characteristics (Pratiwi & Affandy, 2020). Several studies have been undertaken to examine the community's knowledge and opinions concerning Islamic banking (Muslichah & Sanusi, 2019;Pratiwi & Affandy, 2020;Rachmawati, 2018).…”

“…Each person has a different level of Islamic financial literacy, including awareness of Islamic financial product characteristics (Pratiwi & Affandy, 2020). Several studies have been undertaken to examine the community's knowledge and opinions concerning Islamic banking (Muslichah & Sanusi, 2019;Pratiwi & Affandy, 2020;Rachmawati, 2018). Studies suggested looking into non-Muslims as they will be more vulnerable, and this will strengthen the variables towards the willingness to choose Islamic microfinance (Utamy & Widhiastuti, 2020).…”