Abstract/Summary

This is the first-known study conducted in Canada on the social and religious determinants of the likelihood of adopting Islamic banking and financial services among Canadian Muslim consumers. Using Structural Equation Modelling, a model was tested based on the Theory of Planned Behaviour. The hypothesized paths in the structural model affecting one's intentions to use Islamic banking and financial services were: positive attitude, higher Islamic religiosity, positive subjective norms, perceived behavioural control, and lower perceived cost of being Muslim. A total of 536 completed surveys from individuals residing in Canada who self-identified as Muslims were obtained. The data were then analyzed using SPSS and AMOS. The model's research hypotheses were tested using a three-step approach: exploratory factor analysis, confirmatory factor analysis, and SEM. The results reveal that attitude was most important, followed by religiosity, subjective norms, and perceived behavioural control. In contrast, the cost of being Muslim had the least bearing on the intention to adopt IBF. This research study is based in Canada and seeks to address the gap in IBF literature in the Canadian and broader North American contexts. While other IBF studies consider religiosity as a construct to determine IBF adoption, this research study extends on this research, adopting a multidimensional construct that explores the impact of belief, experience, rituals, knowledge, devotion, and consequences to identify differences and relationships, if any, between each dimension and the intention to adopt IBF. This study creates a predictive model that may be used to identify not only the intention of the Muslim population in Canada to adopt IBF but, ultimately, assist in developing targeted marketing and business development strategies for IBF for both conventional and Islamic finance institutions. This is a timely study in the Canadian market and broader Western context, and the findings may significantly impact future development and practices.