International Journal of Bank Marketing

Consumer attitudes and purchase intentions toward Islamic banks: the influence of religiosity:
Nizar Souiden Marzouki Rani
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Nizar Souiden Marzouki Rani , (2015),"Consumer attitudes and purchase intentions toward Islamic banks: the influence of
religiosity", International Journal of Bank Marketing, Vol. 33 Iss 2 pp. -
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 Consumer attitudes and purchase intentions toward Islamic banks:

the influence of religiosity

Introduction

According to Standard & Poor’s September 2012 report, the Islamic finance industry is estimated

to grow by 20 per cent each year from 2011-2015. Currently, there are more than 420 Islamic

financial institutions in 75 Muslim and non-Muslim countries in the world. Interest in Islamic
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finance in the West is growing in the banking sector as well as in academia, where courses on

Islamic finance are offered in many schools, including the City University of London and

Harvard (Stewart, 2013). The UK is the first European country to allow the entry of Islamic

banks and there are five (and more than 20 other financial institutions that offer Islamic financial

services). This trend reflects changes in the financial systems of many countries. Indeed, during

the last two decades and following the financial crises, particularly during the 1990s and 2000s,

many financial systems are beginning to open to alternatives less affected by the problems

inherent in global economic crisis.

Islamic financing is emerging or being considered in many Muslim countries, traditionally

influenced by the western world. For example, Tunisia saw its first Islamic bank open in 2010,

and is more receptive to the Islamic banking system, especially since the Islamic party gained

power in 2011. Indeed, since the 2011 revolution, Tunisia has undergone major changes in its

political, economic and social environments. Tunisian society, politically and socially

‘homogeneous’ in the past, now is divided between conservative and the liberal ideologies. An

increasing number of Tunisians have turned toward their Islamic and conservative roots, while

others continue to relate to the west or the ‘liberal’ way of life. This duality of conservatism and

1
 modernism affects individual consumption habits for products and services, including financial

services (e.g., credits, insurances, etc.).

This paper investigates the impact of religiosity on consumer attitudes towards Islamic banking.

The relationship between religion and attitude has been extensively investigated in different

contexts (e.g., Dusuki and Abdullah, 2007; Erol and El-Bdour, 1989; Metawa and Almossawi,

1998), but to the best of our knowledge, no one has examined this relationship in depth in a

context where Islamic financial services are in their introduction stage in a modern-conservative
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Islamic society dominated by conventional banking systems. In particular, we intend to answer

the following questions:

1. What defines religiosity in a modern-conservative society?

2. How does religiosity affect attitudes towards Islamic banks and the intention to purchase

their services?

Literature review

Islamic Banks vs. Conventional Banks

Islamic banks must be consistent with the Sharia (i.e. the Islamic law), a set of social and cultural

norms, a divine way that Muslims must follow to accept the will of God (Allah). Accordingly,

Islamic banks are prohibited from charging interest (i.e., riba), a main drivers of conventional

banking systems, and they need to use an alternative operating system more in line with Sharia to

generate profits. This alternative system is based on four main methods: moudaraba (trust

financing), mousharaka (loss and benefits sharing), mourabaha (cost-plus financing) and ijara

2
 (leasing) (for more details on these four methods, see Haron et al., 1994 and Maali and Napier,

2010).

Islamic banks cannot under any circumstance finance projects contrary to the principles of the

Islamic religion. According to Ahmad (2000), they cannot finance projects that conflict with the

Islamic value system, such as financing a brewery, a casino, a nightclub or any other activity

clearly prohibited by Islam or considered prejudicial to society. This also implies that businesses

dealing with prohibited products or services should not have accounts in Islamic banks. Although
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banks can readily check client “eligibility” if they have rigorous procedures in place, checking

private accounts and individual clients may be more difficult. For instance, proving whether a

private client’s money comes from gambling, money laundering, or other prohibited activities

may be complex.

Based on previous studies, Al-Tamimi et al. (2009) summarize the differences between Islamic

and conventional banks which can be attributed to factors such as bank functions and operations,

management, and the nature of relations with clients (see Al-Timimi et al., 2009 : 244). For the

most part, Islamic banks do not differ from conventional banks in terms of deposits, withdrawals,

assistance and consulting services (Ahmad, 2000; Chapra, 2000; Henry and Wilson, 2004; Iqbal

and Mirakhor, 2007; Iqbal and Molyneux, 2005). There is a general agreement that it is possible

to summarize the antecedents of choice to nine main factors for conventional banks, and to ten

factors if the bank is Islamic. However, authors disagree on the importance of these factors

(Dusuki and Abdullah, 2007; Gait and Worthington, 2007).

According to many researchers (Abbas et al., 2003; Ahmad and Haron, 2002; Al-Ajmi et

al.,2009; Dusuki and Abdullah, 2007; Gerrard and Cunningham, 1997; Erol and El-Bdour, 1989;

Erol et al., 1990; Haron et al., 1994; Metawa and Almossawi, 1998; Naser et al., 1999; Omer,

3
 1992), the nine common determinants of bank choice are : confidentiality, cost and benefits of

products offered, service delivery, convenience, size and reputation of the bank, friends and

family influences, friendliness of personnel, mass-media advertising, and satisfaction with the

bank’s products and services. The tenth determinant is religiosity if the study is conducted in an

Islamic context or for Islamic banks/financial services.

The Tunisian banking market is dominated by conventional banks. There is almost no difference

among these banks in terms of their services (e.g. same interest rates). In 2010, the first (and still
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the only) Islamic bank opened for business. The new Tunisian government is currently working

on opening the market to more national and international Islamic banks. Indeed, in 2012, the

Council of the Islamic Finance of Tunisia (COFIT: Conseil de la finance islamique de Tunisie)

was created in order to raise public awareness of the benefits of Islamic financing and provide

counseling to investors in that sector.

As suggested by Metwally (1996), to investigate consumer intentions to purchase Islamic

banking services, it is necessary to focus on the only real point of difference between

conventional banks and Islamic banks—religion or religiosity, which we examine in the literature

review below.

Religiosity and its determinants

The terms “Religion” and “Religiosity” are used interchangeably to define the same concept, the

latter being used more often in recent literature (Hill and Pargament, 2003). Religion is defined as

“an organized system of beliefs, practices, rituals and symbols designed (a) to facilitate closeness

to the sacred or transcendent (God, higher power, or ultimate truth/reality), and (b) to foster an

4
 understanding of one’s relation and responsibility to others in living together in a community”

(Koenig et al., 2000:18). Religiosity is defined as “the extent to which an individual is committed

to the religion he or she professes and its teachings, such as the individual’s attitudes and

behaviors reflect this commitment” (Johnson et al., 2001: 25). Religiosity has a personal

dimension (Slater et al., 2001) representing an individual’s real relation to the sacred. In our

study, we opt for the term religiosity to indicate individuals’ respect for = the religion they are

professing.
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The concept of religiosity has always posed a challenge to marketing and social science

researchers. Indeed, the hazy and complex nature of this concept, in addition to its inherent

‘taboo’ character (in many countries), does not facilitate the task of researchers. Past studies do

not agree whether religiosity is uni-dimensional or multidimensional, what the determinants are,

and how to measure them.

According to Meadow and Kahoe (1984) and Kirkpatrick and Hood (1990), the most widely used

religiosity scale, especially in psychology, is the Allport and Ross (1967) bi-dimensional

Religious Orientation Scale, which categorizes individuals into two groups: individuals who

perceive (the practice of) religion as a goal in and of itself (intrinsic orientation) and those who

perceive it as an instrument allowing them to achieve a particular goal (extrinsic orientation).

Later, Hoge (1972) converted this scale to a uni-dimensional one (intrinsic religious motivation

scale).

Batson and Ventis (1982) call religiosity a tridimensional concept (the Quest Scale) where

religion is a personal quest and an individual’s religiosity has three dimensions (Batson and

Schoenrade, 1991): questioning beliefs, valuing doubts and expecting change.

5
 Based on individuals’ perceptions of their spiritual (religious) well-being, Paloutzian et al. (1978)

and Ellison (1983) suggest another concept of religiosity: individuals’ religiosity or spirituality

can be captured by the Spiritual Well-Being Scale (SWB). This scale is subdivided into: (i) the

religious well-being subscale that provides a self-assessment of one's relationship with God and

(ii) the existential well-being subscale that provides a self-assessment of one's sense of life

purpose and life satisfaction.

To measure the affective relationship a person has with God, Edwards (1986) created the
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Religious Experience Questionnaire (REQ) to measure the human-divine relationship through

concepts such as the perception of God’s presence, the feeling of being listened to, loved and

forgiven by God and the feeling of being saved by God.

In an extension of Worthington's (1988) work, Sandage (1999) proposes the religious values

scale (RVS) that measures religious attitudes and beliefs and tolerance for others with differing

values. Since this scale avoids sectarian language, it can be used with most faiths (King and

Crowther, 2004). The RVS is broken down into seven subscales: authority afforded to given to

sacred writings, authority afforded to religious leaders, religious group identification, religious

commitment, tolerance toward people having different opinions on scripture, tolerance towards

people belonging to different religious groups and tolerance towards people with different views

regarding the authority of religious leaders.

Another measurement scale of religiosity, the Brief Multidimensional Measure of Religion and

Spirituality (BMMRS), was proposed by a team of researchers supported by the Fetzer Institute

and the National Institute on Aging (Fetzer Institute/NIA, 1999). This scale which is composed of

twelve dimensions (daily spiritual experiences, meaning, values, beliefs, forgiveness, private

religious practices, religious/spiritual coping, religious support, religious/spiritual history,

6
 commitment, organizational religiousness, and finally, religious preference) was mainly designed

for use in health outcomes and other health research.

Most of the scales described above are based on the concept of religion/religiosity in a Christian

context. Although Christianity shares several values with other religions, adapting previous scales

or developing new ones is an inevitable prerequisite to better grasp the religiosity of non-

Christians. For instance, measuring Muslims’ religiosity with scales developed for Christians

may lead to inaccuracy.

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To our knowledge, few researchers have examined the determinants of religiosity in Muslim

countries. Since the most important sources that govern Muslim life are the Koran and the Hadith

(i.e., the Prophet Mohamed’s words) and because these two sources summarize the moral and

juristic code in Islam, one can refer to them to delineate Muslim behavior and beliefs that reflect

their religiosity. For instance, to be a ‘good’ Muslim requires a full submission to God (i.e.,

Allah). Indeed, for Muslims, the veracity of the Divine Word is not called into question and all

events, negative or positive, are the act of Allah. This may explain, to some extent, the

omnipresent notion of fatalism in the life of a Muslim (see for example Koran 50:33). Also,

according to the two sources of Islam teaching, individuals’ beliefs, as well as submission, must

be visible in their behavior. Thus, Muslims must not only respect the precepts of their religion but

also practice them (e.g. prayer, almsgiving), or they commit a sin, manifested by simple

forgetfulness or disobedience up to a serious situation of non-belief (i.e., kufr).

‘Good’ Muslims should fear the creator (see for example verses 3:102 and 33:70 of the Koran),

which encourages the individual to abide to what is considered good (i.e., Halal) and avoid what

is considered bad (i.e., Haram). A Muslim must submit himself to the prescriptions of God and

completely avoid what is Haram (forbidden) under penalty of very grave sanctions.

7
 A ‘good’ Muslim must also honor religion by deepening his/her knowledge of Islam and the

world (e.g. Koran 45:13). This continual interest in religion should allow Muslims not only to

remember the divine principles that guide their life, but to develop an understanding of their

beliefs. They can then adapt their behavior to the demands of life whilst staying in harmony with

their religion.

Since Islam governs all aspects of Muslim life, and many restrictions apply, a ‘good’ Muslim has

to be patient and endure the difficulties of bodily (physical) life to enjoy the spiritual one (e.g.
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Koran 47:31). This implies that weakness in the face of difficult situations in daily life must not

divert the Muslim from what the creator asks of him. It is his duty to overcome obstacles and a

good Muslim should not succumb to the temptations of life, especially those that contradict the

precepts of Islam. Only weak (Muslim) individuals succumb to temptation.

To summarize: a religious Muslim believes in God, obeys His laws, fears His punishment,

develops an interest in his/her religion and practices it, and is patient and does not yield to

temptation.

Religiosity and Consumer Behavior

Many researchers have explored the role that religion plays in consumer purchasing behavior.

Delener (1994) finds that individuals have different levels of religiosity and can be divided into

four categories: the most religious, the moderates, the less religious and the non-religious. Their

consumption behaviors seem to vary according to their degree of religiosity. For the less

religious, the religion factor is not taken into consideration nor has a weak influence on

consumption decisions.

8
 Religion may require that individuals follow a certain lifestyle and influences their beliefs and

values, including their clothing habits, their diets and their economic affairs. In a study on the

impact of monotheistic religions on consumer behavior, Assadi (2003) discusses the ban of

certain products by Islam, Christianity and Judaism. For example, Muslims are forbidden to eat

pork-based products or non-halal food. Similarly, Jews must consume kosher products (Leviticus

11: 9-19) and Christian women must dress decently and must not wear gold (I Timothy 2: 9-10).

Mokhlis (2006) reports that the buying behaviors of Muslims gravitate around the culture, norms,
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attitudes and values influenced by their religion in their study of food, clothing and cars in

Malaysia. Bonne et al. (2007) study the determinants of buying halal meat in France, and show

that the decision processes of Muslims differ from those of non-Muslims. These same results

were obtained by Sharri and Afirin (2010), who add that religion dictates the lifestyle of religious

individuals, a finding confirmed by Khraim, (2010) who agrees that individuals’ lifestyle depends

on their level of religiosity.

Nonetheless, a distinction should be made between Muslims’ beliefs and their (actual) behavior.

For instance, it is possible to find Muslims who believe in the principles of their religion but

consume prohibited products/services. Alserhan (2011, p.115) states, “The definition of the

Muslim consumer is not as straightforward as it might seem. Being a Muslim by birth does not

necessarily signify that a person does actually search for, adopt or consume products that are

Shariah-compliant. It is a well-known fact that some Muslims consume alcohol, dine at

restaurants that don’t serve Halal food and arrange their finances through conventional rather

than Islamic banking.” Thus, Muslim consumers can be distinguished not only on the basis of

their beliefs and attitudes toward Islamic principles but also on the strength of the disconnect that

may exist between their beliefs and attitudes and their behavior. There are Muslims who consume

9
 prohibited products/services (e.g., alcohol, interest-based loans) and admit that their act

transgresses Islamic principles while regretting their behaviors/decision. They may also admit

that their act transgresses Islamic principles but do not regret their behaviors/decisions or they

may not admit or believe that their act transgresses Islamic principles and thus show no regret.

The degree of religiosity seems to be a key determinant of Muslim consumer attitudes and

behaviors.

Religiosity and Purchase of Islamic Bank Services

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Noland (2007) maintains that beliefs and religion can be very harmful to the economy, at both

microeconomic and macroeconomic levels. He believes that Islam may have a negative effect on

activities that generate economic growth, mainly because it is prohibited to charge interest. Thus,

Noland (2007) contends that, the more pious Muslims are, the more they tend to be ‘anti-market.’

In the literature, amongst all the common variables that come into play when choosing a bank,

religious beliefs or religiosity have been the most studied factors in the context of Islamic

banking (Al-Ajmi et al., 2009; Al-Sultan, 1999 ; Dusuki and Abdullah, 2007; Erol and El-Bdour,

1989 ; Erol et al., 1990 ; Hamid and Nordin, 2001 ; Haron et al., 1994 ; Hegazy, 1995 ; Metawa

and Almossawi, 1998 ; Naser et al., 1999 ; Omer, 1992 ; Okumus, 2005 ; Zainuddin et al.,

2004 ).

Although Islam prohibits dealing with interest-based banks, many Muslims do not respect this

principle (Alserhan, 2011), possibly because they do not clearly understand or perceive the “non-

Halal” aspect of conventional banks. They may argue that there is no difference between Islamic

and conventional banks and, therefore, they do not see any issue in dealing with the latter. A

second reason could be the scarce availability of Islamic banking services in many Muslim

countries. For instance, the first Islamic bank in Tunisia was established in 2010. Before then,

10
 Tunisians had no choice but to deal with conventional banks. This is also true for Muslims living

in non-Islamic countries where Islamic financial services are not offered. The third reason that

may explain why Muslims deal with conventional banks is a low degree of religiosity in certain

individuals.

Although religiosity is always considered as a key factor in the choice of a bank for Muslims,

researchers remain undecided about its importance in explaining consumer decisions. Some
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researchers consider it the most influential factor (Metawa and Almossawi, 1998; Naser et al.,

1999) and sometimes it is reported to be the least important one (Al-Ajmi et al., 2009; Dusuki

and Abdullah, 2007; Erol and El-Bdour, 1989).

Erol and El-Bdour (1989) show that in Jordan, where a conventional-Islamic bank duality exists,

religion was not a determining factor in the choice of a bank. Instead, confidentiality, the bank’s

reputation, image and speed and efficacy of service are the deciding factors. The results of their

study were confirmed by Erol et al. (1990) in the same context (i.e., Jordan) and by Haron et al.

(1994) in Malaysia.

Other studies, however, show that religion plays a considerable role in consumers’ choices of

Islamic banks. For example, Al-Sultan (1999) and Metwally (1996) report that adherence to

Islam is the principle factor for Kuwaitis’ choice of Islamic banks (if and only if the quality of

banking services is satisfactory). In Bahrain, Metawa and Almossawi (1998) find that the most

important factors in the choice of an Islamic bank are religion and then profitability. Naser et al.

(1999), based on the work of Erol and El-Bdour (1989) and Erol et al. (1990), conclude that bank

reputation and religiosity are the most important factors in the choice of an Islamic bank in

Jordan.

11
 Similarly, and in an Islamic context where both banking systems coexist (Egypt, Kuwait and

Saudi-Arabia), Metwally (1996) shows that Islamic banks and conventional banks do not differ in

terms of the costs and benefits of offered services or in the competence of personnel and speed of

service. They find that the main factor explaining consumers’ choice of an Islamic bank is

religion. In a totally different, non-Islamic context, Omer (1992) shows that in Great Britain,

even if they had limited knowledge of Islamic finance, clients of Islamic banks believe the

religious factor is the most important in their choices of a bank. Okumus’s (2005) study shows
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that most clients of Islamic banks in Turkey choose this type of bank for religious reasons.

The Impact of Religiosity on Attitude and Purchase Intention

For many consumer goods (e.g. food and clothing), Islam encourages or forbids certain choices

and significantly influences attitudes, either negatively if the products/services are forbidden by

Islam (i.e., haram), or positively if they are allowed (i.e., halal).

The very definition of religiosity offered by Johnson et al. (2001) suggests that it is strongly

related to attitude, in line with Fishbein and Ajzen (1975: 11), who write that attitude is “the

amount of affect for or against some object”. They say that beliefs represent the information an

individual has about an object. A person’s beliefs are likely to be strongly related to his/her

religion, either by direct effect (via sacred texts) or by indirect effect (because of the culture of

the individual, which is influenced by religion). Religion and attitude are strongly correlated.

Confirming this opinion, Foxall and Goldsmith (1994) report that religion contributes to building

the base of knowledge that justifies and controls the attitudes and behavior of an individual.

Weaver and Agle (2002) agree, adding that it is the religious identity that a person has of

him/herself that influences his/her behavior and his/her attitude.

12
 If individuals thus perceive that subscribing to an Islamic bank’s services is consistent with their

religion, their attitude toward Islamic banks will theoretically be favorable, but this seems not to

be the case for many religious people, who tend to question the compatibility of Islamic banks

with Islamic principles. They ask how an Islamic bank can be consistent with the principles of

Islamic finance if it operates in an environment where the interest rate is not only important, but

paramount. The answer seems to depend on the context. For instance, in Tunisia, banking sector

regulations require banks to engage with the Central Bank of Tunisia, and those transactions are
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governed by interest rates established by the Central Bank itself. Thus, the Islamic bank cannot

escape the riba which is forbidden by Islam. This is also confirmed by Chong and Liu’s (2009)

study in Malaysia, which finds that the absolute majority of Malaysian Islamic banks (99.5%) do

not employ the profit-and-loss model inherent to this type of bank, but rather use the

conventional interest system. In Senegal, however, Islamic banks are exempt from the interest-

related regulations that apply to conventional banks and are thus considered to be in harmony

with the Islamic precepts.

Skepticism about the ‘Islamization’ of banking services can be due to consumers’ lack of

knowledge on the nature of services offered by Islamic banks. Indeed, since these banks offer

services like those of conventional ones, people may believe that Islamic banks are just a decoy,

an imitation of conventional banks, to attract individuals who want to make their savings or

investments compatible with their religion (ie.,halal). In a study conducted in the eastern Arabian

Gulf countries (Kuwait, Saudi Arabia, Bahrain, Qatar, United Arab Emirates, and Oman), Elbeck

and Dedoussis (2010) report that Islamic banks have evolved to the point where differences with

conventional banks are negligible. They add that criteria describing the merits of (online) Islamic

banks are not clear and do not strongly reflect Sharia. This leads to an unclear positioning of

13
 (online) Islamic banks. Thus, Islamic banks need to have specific criteria (e.g., meaningful

variety of banking and investment opportunities) that distinguish them from conventional (online)

banking. For many Muslims, Islamic banks are not yet fully accepted because of lack of

knowledge (Ahmad and Haron, 2002). Additionally, for many orthodox Muslim scholars (and

individuals as well), Islamic banks are perceived as scam by modern-day Muslim countries and

are therefore forbidden (i.e. haram) just as conventional banks are, because they directly or

indirectly offer interest-based services (Gup, 2011). Thus, the very religious individuals who
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wish to avoid anything forbidden or discouraged by their religion are likely to reject Islamic

banking services.

Attitude is often reported as a strong determinant of purchase intention (e.g., Engel et al., 1978;

Howard and Sheth, 1969; Nicosia, 1974). Taib et al.’s (2008) study on home financing in

Malaysia (one of the products offered by Islamic banks) confirms that a significant relationship

exists between attitude and intent to call upon Musharakah Mutanaqisah (a partnership contract

between two parties, where one partner progressively buys the whole part of the property). In

another study, Lada et al. (2009) explore Halal product choices in Malaysia and find that attitude

correlates with the consumption of halal products. Similarly, Hanudin et al. (2010) find that, in

Malaysia, attitude toward Qardh Hassan, an Islamic financing method, positively correlates with

intention to apply for credit.

Based on the previous discussion, we formulate the following hypotheses:

H1: The more religious a person is, the more he or she has a positive attitude toward Islamic

banks.

14
 H2: The more positive an attitude an individual has toward Islamic banks, the greater his or her

intention to purchase its services.

Following our literature review and the discussions presented above, we present the following

conceptual model:
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Insert Figure 1 about here

Research methodology

Our study takes place in the Tunisian context for several reasons: First, the Islamic banking

system in Tunisia is rather recent and in its introductory stage. There is only one Islamic bank in

Tunisia with 24 branches throughout the country. Second, the study coincides with the decision

of the new government to boost Islamic banking services in the country. A Reuters survey finds

that Tunisia’s burgeoning Islamic finance industry is expected to constitute nearly 40 percent of

its financial sector by 2018 in light of new reforms (World Finance, September 2013). Thus, the

present study could be helpful for investors in the Islamic financing sector since we intend to

shed light on individuals’ attitude and purchase intentions towards Islamic banks. Third, the

Tunisian banking market is characterized by great homogeneity in its banking services. Indeed,

the country’s 24 conventional banks (with 1,393 branches) offer similar services in terms of

credit, deposits, interest rates, etc. The study offers an opportunity to see whether religiosity is

behind consumers’ selection of the single Islamic bank while conventional dominate the market.

Fourth, European culture influences Tunisia, mainly through tourism and the media. As a liberal

15
 Muslim country, Tunisians’ lifestyle and social, cultural, and business environments are different

from those of other Middle Eastern countries (e.g., Saudi Arabia). Tunisians are not legally

required to abide by Islamic principles. Performing Islamic rituals (e.g., fasting, praying, etc.) is

an individual decision. This is not the case in Saudi Arabia, for example, where all residents are

subject to legal sanctions when transgressing Islamic norms or omitting rituals. We expect that,

unlike citizens of more conservative Muslim countries, Tunisians who respect Islamic principles

and have high religiosity will behave according to their religious convictions not because they are
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forced to do so by law.

Measures

The measurement scales of attitude and purchase intention have been validated in many contexts

and for different product and service categories. For the attitude variable, five items often used in

past studies (e.g., Amin et al., 2011; An and Kim, 2007; Nepomuceno and Porto, 2010; Schlosser

et al., 1999; Sun and Wang, 2010; Wolin et al., 2002) were selected, including “Overall, I

consider Islamic banks is a good thing”, “I consider Islamic banks essential”, and “I appreciate

Islamic banks”. For the purchase intention variables, we adopted three items used by Lada et al.

(2009) and Nepomuceno and Porto (2010), including “I will be (or will continue to be) a client of

an Islamic bank” and “I am interested in being (or will continue to be) a client of an Islamic bank

in the future.”

For the religiosity scale, a more adapted measurement was needed. Previous studies maintain that

adaptation to context is necessary because scales contain items that refer to social and

psychological aspects of the respondent (Bouletreau et al., 1999). The different religiosity scales

described in the literature do not adequately correspond to Tunisian society. Even though Tunisia

16
 is a Muslim country, the culture is considerably different from those of the Middle East or

Malaysia, countries where the majority of studies on Islamic banks have taken place.

Consequently, finding a measurement scale for religiosity in the Tunisian context was a crucial

step. We had to first select pertinent studies to identify the measurement scales of religiosity

developed in Muslim and non-Muslim contexts. In all, 26 items were selected to measure

individuals’ religiosity (seven items were chosen from Khan et al., 2005; five items from

Ghorbani et al., 2002; five from Jana-Marsia and Priestera, 2007; three from Khraim, 2010; 3
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items from King and Crowther, 2004, and one each from Almarri et al., 2009; Abu Raiya et al.,

2008 and Rehman and Shabbir, 2010). These items were then adapted to our context.

To test the reliability and validity of the religiosity scale, a pre-test on a sample of Tunisian

respondents was considered. A questionnaire containing only statements on religiosity measured

on a five-point Likert scale (from totally disagree to totally agree) was administered online. The

decision to collect data online can be justified by the fact that certain subjects relating to religion

may be considered taboo (e.g., polygamy, obligation for women to wear the veil, financial

interests, religious practices, etc.) (Sabri et al., 2010). Using an online questionnaire not only

speeds answers but guarantees the anonymity of the respondents and the sincerity of their

answers. Data collection for the pre-test lasted seven days, leading to 188 answers, a number

considered sufficient and satisfactory for the pre-test.

Using IBM SPSS Statistics 20.0, an exploratory factor analysis (EFA) was applied to the 26 items

of religiosity. Only items with factor loading superior to 0.6 were retained (Nunnally, 1978). A

solution of four factors with eigen values of unity and greater was produced. The KMO (Kaiser-

Meyer-Olkin) index tended towards 1 (KMO = 0,923) and the Bartlett sphericity test was

17
 significant (sig.= 0.000). The four factors were rotated to a simple structure using a varimax

rotation.

The EFA of religiosity led to the retention of 19 items split into four dimensions. The first

dimension, “fear of divine punishment” (Cronbach’s Alpha = 0.941) comprises seven items such

as “I am afraid that Allah is going to punish me in some way” and “I do my best to avoid sin,

because I do not want to go to Hell”; a second dimension “religious involvement” (Cronbach’s

Alpha = 0.900) comprises five items, such as “I attend religious sermons at the Mosque” and “I
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read books and magazines that talk about religion”; a third dimension “religious belief”

(Chronbach’s Alpha = 0.853) comprises four items, such as “I believe in the application of the

Sharia” and “I believe that women must wear the headscarf (hijab)” and finally a fourth

dimension “susceptibility to give in to temptations” (Cronbach’s Alpha = 0.768) contains three

items, such as “I am a believer but sometimes I have a tendency to sin” and “I am a believer but I

find that it is hard to follow my religion to the letter.” These four dimensions have an explained

variance of 73.712 percent.

Data Collection and Sample Characteristics

A convenience sampling technique was used to collect data through an online questionnaire. All

the items of religiosity (19), attitude (5) and purchase intention (3) are measured on a 5-point

Likert scale (totally disagree to totally agree). The questionnaire includes nine socio-demographic

questions and two filter questions. Data collection lasted one month, during which 243 responses

were received and 217 were considered valid.

18
 Of the sample, four percent are customers of the single Islamic bank in Tunisia, close to the 2.2

percent market share of the bank as reported by the Tunisian Ministry of Finance in 2012. Among

the respondents, 57 percent are male and 43 percent are female; 87 percent are single, 12 percent

are married and one percent are divorced. In terms of age, 71 percent of respondents are between

18 and 25 years old, 17 percent are between 26 and 35, six percent are between 37 and 50 and six

percent are more than 51 years old. Concerning household size, 17 percent of respondents lived

alone, 19 percent were in a household with two or three people and 64 percent lived in a
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household of four or more people. As for household income, 48 percent have an annual income

of less than 5000 TD (1 $US ≈ 1.6 TD), 31 percent between 5001 TD and 20,000 TD, 16 percent

between 20,001 TD and 50,000 TD and five percent more than 50,000 TD. The majority of

respondents (97%) completed or are pursuing undergraduate studies. The majority live in the

capital Tunis or its suburbs.

Analysis

The Cronbach’s alphas for attitude towards Islamic banks and purchase intention are 0.883 and

0.916, respectively. However, when we noticed that the suppression of item five of the attitude

scale would greatly improve the model’s indices, we eliminated it and the attitude scale’s

Cronbach’s Alpha remained very high (0.855).

For the religiosity scale, a confirmatory factor analysis (CFA) was undertaken to test its

multidimensionality (as reported in the EFA analysis) and the results show that the religiosity

model indices are not satisfactory. Indeed, the GFI is inferior to 0.9 (0.835), the RMSEA is

greater than 0.08 (0.085), and the RMR is greater than 0.08 (0.138). This is not surprising since

scale purification was not yet completed.

19
 We thus proceeded to remove, one by one, the items that seemed problematic, whilst monitoring

the effects of these removals on the indices of the religiosity’s model. This process led us to drop

the dimension of “susceptibility to give in to temptations” and the overall fit recorded a

remarkable improvement in the model indices (CFI=0.956, GFI= 0.91, TLI= 0.95, and RMR

close to 0.08). Consequently, the religiosity construct comprises three dimensions. The first one,

“fear of divine punishment”, measured by four items, has a Cronbach’s Alpha of 0.859. The

second dimension, “religious involvement”, measured by three items, has a Cronbach’s Alpha of
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0.880, and the third dimension, “religious belief”, measured by four items, has a Cronbach’s

Alpha of 0.849.

Thus, religiosity in our study’s context is a tridimensional concept and this confirms its

multidimensionality as reported in previous studies (e.g. King and Crowther, 2004; Worthington,

1988). Subsequently, in order to determine the effect of each dimension of religiosity on attitude,

we readjusted our conceptual model (see figure 2) and the first hypothesis (H1).

H1.a: The more an individual is a believer (in the laws and principles of Sharia), the more

favorable his/her attitude toward Islamic banks.

H1.b: The more an individual has a religious involvement (i.e. practice and interest), the more

favorable his/her attitude toward Islamic banks.

H1.c: The more an individual fears divine punishment (is afraid of sinning), the more favorable

his/her attitude toward Islamic banks.

Insert Figure 2 about here

20
 To test the whole model and the research hypotheses, structural equations modeling (SEM) was

also applied. The results show that the CFI is superior to 0.9 (0.974), the RMSEA is <0.06

(0.056), the GFI is above 0.9 (0.906), the RMR is below 0.08 (0.072) and the TLI is superior to

0.95 (0.969). Convergent validity is also confirmed. Thus, we can trust the results of this model

to test the research hypotheses.

Insert Table 1 about here

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Table 1 shows that the more a person fears divine punishment, the more he/she will develop a

favorable attitude towards Islamic banks. The more a person believes in Islamic laws, the more

favorable his/her attitude towards Islamic banks. However, we observe that the relationship

between religious involvement and attitude toward Islamic banks is not significant. Thus,

practicing religion or having an interest in religion does not explain one’s attitude towards

Islamic banks. Only beliefs in Islamic law and fear of divine punishment motivate individuals to

develop a positive attitude towards Islamic banks. Finally, the results confirm that attitude toward

Islamic banks is positively and significantly related to purchase intention (i.e., intention to use the

services of Islamic banks).

We tested an alternative model that directly links each dimension of religiosity to purchase

intention, and the results indicate that neither fear, nor beliefs, nor religious involvement has a

direct effect on purchase intention. We conclude that religiosity has an indirect effect on purchase

intentions of Islamic bank services through attitude towards these banks.

21
 Theoretical and managerial implications

Like previous studies which report that religiosity is a multidimensional concept (e.g., Batson and

Schoenrade, 1991; Edwards, 1986; Hall and Edwards, 1996; Worthington, 1988), the present

study suggests that, in the context of a conservative-modem Muslim country such as Tunisia

(Souiden and Msaad, 2011), the religiosity concept is tridimensional, formed by religious beliefs,

religious involvement, and fear of divine punishment.

We find that individuals’ religiosity significantly influences their attitude toward Islamic banks,
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in line with earlier studies in both Islamic (e.g., Omer, 1992; Hagazy, 1995) and non-Islamic

contexts (e.g. Foxall and Goldsmith, 1994). Previous studies have reported the strong impact of

religion on Muslims’ attitude towards Islamic banks (e.g., Metwally, 1996; Al-Sultan, 1999). The

present study adds that the dimension of religiosity with the most important impact on attitude

toward Islamic banks is religious beliefs. Fear of divine punishment has the second most

important impact on attitude. A number of studies insist on the relationship between fear (in

general) and attitude (Eadie et al., 2009; Johnston and Warkentin, 2010; Leventhal, 1970;

McDaniel and Zeithaml, 1984), maintaining that fear has a considerable effect on individuals and

their attitudes towards certain situations or certain objects. According to Leventhal (1970), an

increase in fear may bring about an “accommodating,” and thus positive, attitude toward objects.

Similar results were confirmed by McDaniel and Zeithaml (1984) in a study on the relationship

between fear and intention to purchase. For our study, this means that the more a person develops

fear of divine punishment, the more he/she will tend to purchase services consistent with his/her

religion. Thus, the more a person is afraid of being in the haram, the more his/her attitude toward

Islamic banks will be favorable. Studies by Elliot (2003), Eadie et al. (2009) and Warkentin

(2010) show that the more fear has an impact on attitude, the more individual behaviors or

22
 behavioral intentions are inclined to change accordingly. In the present study, however, fear has

only an indirect impact on behavioral intentions via attitude.

Like research on the relationship between attitude and purchase intention (e.g., Engel, Blackwell

and Kollat, 1978; Howard and Sheth, 1969; Nicosia, 1974), the present study reports a direct and

significant link between attitude toward Islamic banks and purchase intention, in line with the

findings of Taib et al. (2008) and Hanudin et al. (2010), who investigate this relationship in the

Malaysian financial sector, and more generally, with the results of Lada et al. (2009), who
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investigates this relationship in the Halal food products sector. In the context of Islamic banks,

we confirm that attitude plays an important mediating role between religiosity and purchase

intention.

The results of this study can be quite useful for managers, particularly those dealing with or

marketing to conservative-modern Islamic countries. Knowing the different aspects of religiosity

lets managers consider new approaches when exploring consumer behaviors and they can tailor

their marketing strategies accordingly.

In the aftermath of the Tunisian revolution, there are at least two main groups in Tunisian society:

those calling for the application of Islamic principles through legislation and other means and

those calling for keeping religion as a personal matter. For the banking sector (and from a

marketing standpoint), these two groups should be considered two market segments.

Conventional banks will certainly continue to target the more liberal consumers while Islamic

banks will target conservative Muslims. Since Islamic banks in Tunisia are very recent,

competition with conventional ones is likely to be weak in the short-term and perhaps increase in

the mid-term. In the long run, the performance of conventional and Islamic banks will certainly

23
 depend on how Tunisian society evolves and whether it moves in more conservative or liberal

directions.

Our study shows that beliefs are the most important factor influencing attitude toward Islamic

bank services. Consequently, a communication strategy focusing on the compatibility of Islamic

banks with Islamic beliefs and eliminating any doubt that Islamic bank operations are suspicious

(from a religious point of view) could attract a segment of consumers who wish to be in harmony

with the prescriptions of their religion. Islamic banks can better position their offers compared to
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conventional banks and improve the perception of actual or potential clients.

In the communications campaign used in the launch of the only Islamic bank in Tunisia,

convenience (i.e., proximity to consumers) figured as a major factor in promoting its offers and

services. This communication message is perhaps influenced by the political environment that

characterized Tunisia during the old regime, where religious messages were not common (or

even permitted) in the economic and financial domains. Currently, and with the democratic

climate slowly improving, Islamic banks will be able to market themselves “freely” to citizens

with messages with religious connotations. They could, for example, opt for informative and

persuasive advertisements explaining the halal character of their offers to potential clients. But

they must also prove that Islamic banks in Tunisia do not practice interest-based operations and

that they have no suspicious operations that contradict Islamic principles.

Islamic banks can also use fear of divine punishment (i.e., the fear of committing sins by

purchasing services from conventional banks or obtaining interest-based credit) in their

communications. This may improve religious consumers’ attitudes toward Islamic banks, comfort

and reassure actual clients, and perhaps attract clients of competitors (i.e., conventional banks).

24
 Finally, managers of conventional banks can learn from our study results if they want to grow

their Islamic services portfolios to take advantage of this niche market. The question remains as

to how (actual or potential) customers will perceive conventional banks if they offer two types of

services considered to be contradictory (i.e., conventional financial services that impose interest

rates (thus haram) and Islamic financial services consistent with the prescriptions of the Sharia

(thus halal)). This could be interesting to explore because, to our knowledge, attitudes toward

hybrid banks (conventional and Islamic) has not been yet studied.
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Limitations and further research

This study has some limitations. First, due to the convenience sampling technique, the sample is

not representative of the target population and the results should not be generalized to the whole

Tunisian or Muslim population. Second, the focus of the present study is attributed to the role of

religiosity in influencing consumer attitudes towards Islamic banks and purchase intentions.

Including other variables in the model, such as image of Islamic banks and trust towards these

banks, can further shed light on consumer attitudes toward Islamic bank services, and purchase

intentions. Third, and with respect to the religiosity dimensions, it would be interesting to test

their mutual impacts in another Muslim context. The Tunisian conservative-modern lifestyle is

quite different than that of other Middle East countries (e.g. Saudi Arabia which is more

conservative, or Lebanon which is more liberal). These countries do not necessarily share the

same priorities and the same sociocultural characteristics as Tunisia even if they present some

similarities.

25
 Finally, we recommend future studies to investigate the impact of religiosity on attitude toward

and purchase intentions for other Islamic services (e.g., Islamic insurance), and other Islamic

products (e.g., halal food).

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26
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Zainuddin, Y., Jahyd, N. and Ramayah, T. (2004), “Perception of Islamic banking: does it differ

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 Figure 1: Conceptual model

Religiosity

H1
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Attitude

H2

Purchase
Intention

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 Figure 2: Adjusted Model

Religious Beliefs Religious Fear of Divine

Involvement Punishment

H1.b
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H1.a H1.c

Attitude

H2

Purchase
Intention

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 Table1: Regression Results and Hypotheses Testing

Hypotheses St. β p Conclusion

H1.a. Religious belief
Attitude 0.561 0.000 Accepted
H1.b. Religious involvement
Attitude 0.029 0.807 Rejected
H1.c. Fear of divine punishment
Attitude 0.215 0.019 Accepted
H2. Attitude
Purchase intention 0.950 0.000 Accepted
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