Relative financial deprivation, financial anxiety and financial satisfaction: the role of access to Islamic financing among MSME owners amidst COVID-19

Abstract

Purpose The purpose of this paper is to augment the present literature on the relationship between relative financial deprivation (RFD), financial anxiety (FA), access to Islamic financing (AIF) and financial satisfaction (FS) of micro, small and medium enterprise (MSME) owners. Principally, the study examines the moderating role of AIF on the RFD–FS and FA–FS relationships. Design/methodology/approach Quantitative survey approach was used to collect data through self-administered questionnaires from MSME owners. Partial least square (PLS) structural equation modelling (SEM) version 3.2.7 was used to analyse 208 retrieved questionnaires. Findings The results confirm that the RFD–FS relationship is negatively significant, but the FA–FS relationship is not significant. However, the direct relationship between AIF and FS is positively significant. Conversely, AIF failed to moderate the RFD–FS and FA–FS relationships. Practical implications The study specifies that the existence of RFD will decrease the FS of MSME owners, and therefore, RFD should be eliminated at all costs. However, the greater the AIF, the stronger will be the FS of MSME owners. Thus, policymakers and owners of MSMEs should emphasize on AIF to foster FS. Nevertheless, AIF could not redirect the negative impact of RFD and FA on MSME owners’ FS. Originality/value This study, to the best of the authors’ knowledge, is the first to examine the moderating role of AIF on the RFD–FS and FA–FS relationships among MSME owners. Notwithstanding the importance of small business owners for economic development, the literature on MSME entrepreneurs FS has been neglected. This study also uncovers new theoretical knowledge by revealing the inability of AIF to alter the RFD–FS and FA–FS relationships.

What do individuals know, feel and do from a financial perspective? An empirical study on financial satisfaction

“…On a sample of 427, the single factor extraction was 39.69%, below the recommended value of 50%, indicating no CMB problem in the present model (Rahman et al. , 2021; Mahmoud et al. , 2022).…”

“…The present article analyzes the significance of FIS in the context of individuals and examines how they are affected by financial crises. Earlier research by Mahmoud et al (2022) confirmed that relative financial deprivation and anxiety affect FIS. However, no study has been directed to the financial attitude (FA), financial self-efficacy (FSE), financial knowledge (FK), financial stress (FS) and demographic characteristics (DC) influences on FB and FIS.…”

“…The present article analyzes the significance of FIS in the context of individuals and examines how they are affected by financial crises. Earlier research by Mahmoud et al. (2022) confirmed that relative financial deprivation and anxiety affect FIS.…”

“…Thus, Harman's single factor was applied to confirm no CMB in the data set (Cera et al, 2021). On a sample of 427, the single factor extraction was 39.69%, below the recommended value of 50%, indicating no CMB problem in the present model (Rahman et al, 2021;Mahmoud et al, 2022). Additionally, multicollinearity can be measured through the variance inflation factor (VIF).…”

How do Baitul Maal Wat Tamwil empower Micro, Small and Medium Enterprises amidst COVID-19 pandemic? A case of Indonesia

“…One of the functions of Islamic financial institutions is to empower MSMEs (Rokhman & Abduh, 2019). MSMEs have been hampered by access to funding from formal financial institutions (Mahmoud et al, 2022). In order to overcome these obstacles, non-bank financial institutions are increasingly growing and developing in the community that carry out business activities, including business development services and community empowerment.…”