An Islamic banking perspective on consumers’ perception in Pakistan

AbstractPurpose – The aim of this study is to examine the perceptions of consumers on Islamic banking and financein Pakistan. Islamic finance is an emerging phenomenon, and its survival depends on the availability,affordability and awareness. This paper attempts to fill the gap in the literature by exploring the perceptionsof consumers and bankers in an attempt to gain insights so that the availability of products and awarenesscan be increased.Design/methodology/approach – The study uses a regression model by using perception as adependent variable and awareness, knowledge and religious motivation as independent variables. Primarydata is collected using 150 questionnaires distributed amongst finance students in several universities andemployees of Islamic banks in the Khyber Pakhtunkhwa (KPK) Province of Pakistan.Findings – The findings reveal that overall consumers’ perception is positive about Islamic banking andfinance in Pakistan. Statistical analysis shows that awareness, knowledge and religiosity level have a positiveinfluence on the perception of consumers about Islamic financing products and services in Pakistan. Toimprove the awareness and understanding, Islamic banks could make better marketing strategies and couldincrease their presence by mosque visits and conferences. Cooperation between the industry and scholarscould help in providing more innovative products to the consumers.Research limitations/implications – There has been a limited amount of work carried out on theperceptions of consumers about Islamic banking in Pakistan. The present study represents the start of alarger context for examining Islamic banking practices in Pakistan. The findings of the study can be used as areference in future research projects in the areas of perceptions and awareness.Originality/value – Little research has been conducted to study this problem from the perspectives ofconsumers and Islamic banking employees. Most of the research associated with Islamic banks fails to payattention to these stakeholder groups in one study