INTERNATIONAL JOURNAL REVIEW

Indonesian Low-Income Households’ Acceptance of Microtakaful in East Java

Disusun Oleh:
Azwah Tri Lestari

FAKULTAS EKONOMI BISNIS ISLAM

INSTITUT AGAMA ISLAM NEGERI KENDARI
2024
 INTERNATIONAL JOURNAL REVIEW

Tittle : Indonesian Low-Income Households’ Acceptance of

Microtakaful In East Java
Journal : Journal of Islamic Monetary Economics and Finance
Volume and Pages : Vol. 9, No.4, hlm.637 - 660
Years : 2023
Autors : Muh Zul Hazmi Rapi dan Salina Kassim
Reviewer : Azwah Tri Lestari
Date : February 11, 2024

Abstract : The journal entitled " Indonesian Low-Income Households’

Acceptance of Microtakaful In East Java" discusses
mikrotakaful knowledge and participation intention among
low-income households in East Java, Indonesia. This study
uses the Theory of Planned Behavior (TPB) as a conceptual
framework and involves a comprehensive study of attitudes,
subjective norms, prices, and knowledge of mikrotakaful
products. The data collection method used a simple random
sampling approach with a target sample size between 250-
450 respondents. The results of multiple linear regression
analysis show that attitude, subjective norms, price, and
knowledge have a significant influence on the intention of
poor households in East Java to participate in mikrotakaful.
The findings indicate the potential acceptance and uptake of
mikrotakaful among poor households in East Java, and
provide recommendations for regulators and mikrotakaful
practitioners to create a cost-effective program that meets
the needs of the economically disadvantaged. This study
also highlights the importance of social support and
awareness of inclusiveness in shaping the intention to
 participate in mikrotakaful among low-income households.
The findings provide a more diversified understanding of
the microtakaful market, allowing for more targeted
interventions to increase insurance uptake, especially in
areas with high poverty rates.
Introduction : The first paragraph of the journal discusses the importance
of factors such as attitude, subjective norms, price, and
knowledge in the context of poor households' intention to
invest in microtakaful products in East Java. The study
emphasizes that the insights gained from these findings can
provide valuable inputs for policy makers and
microinsurance providers to design effective strategies to
increase microinsurance uptake among this demographic.

The second paragraph goes on to discuss the purpose of this

research, which is to broaden the understanding of low-
income households in East Java, the province with the
highest number of people living below the poverty line. The
research aims to uncover insights that can help improve the
financial resilience of these vulnerable households, in line
with the broader goals of poverty alleviation and financial
inclusion in Indonesia. The research also contributes to
efforts to improve the financial resilience of these vulnerable
households, as well as provide necessary insurance for the
economically disadvantaged.

The next paragraph discusses the awareness of poor

households in East Java on the importance of Islamic
microinsurance and their readiness to allocate some of their
limited resources to Islamic microinsurance. This paragraph
also highlights the willingness of households to invest in
Islamic microinsuranceslamic microinsurance, although
 financial constraints. This additional finding adds another
dimension to the understanding of the behavioral intentions
of poor households in East Java towards mikrotakaful, by
investigating the need and willingness to pay for
microinsurance products.
Discussion : This study used subgroup analysis based on gender
characteristics to increase the robustness of the findings and
test the consistency of the results across different segments.
The dataset was divided into two different subgroups:
Female (consisting of 150 samples) and Male (consisting of
153 samples). The main objective of this robustness test was
to analyze whether the initial findings of the entire dataset
hold true when examined separately in different gender
groups. This approach provides a more diverse
understanding of the relationship between variables in each
subgroup and offers an opportunity to detect potential
variations in microtakaful usage by gender. In evaluating
Hypothesis 1 (H1), this study delves deeper into the Theory
of Planned Behavior (TPB), where attitude is recognized as
an important determinant of an individual's intention to
behave, according to Ajzen's (1991) perspective. In this
study, the researcher investigated the attitude of low-income
households in East Java towards microinsurance products
and whether this affects their intention to use the service.

A survey approach was chosen for data collection due to its

effectiveness in providing reliable and generalizable results.
The sample size was determined between 250 and 450
respondents based on a review of academic literature and
Sekaran's (2000) recommendations to achieve a balance
between statistical reliability and logistical feasibility. This
sample size was considered sufficient to provide meaningful
insights into the attitudes and intentions of low-income
households in East Java regarding mikrotakaful. Prior to
hypothesis testing, the study ensured that the data met the
necessary prerequisites for statistical analysis, including
tests for normality, autocorrelation, homoscedasticity,
multicollinearity, and linearity. Data analysis was conducted
using IBM-SPSS, after going through a careful data
screening process to verify the integrity and consistency of
the data. The main goal of the data screening process is to
maximize meaningful information while minimizing
potential inconsistencies, inaccuracies, or errors. Based on
data from BPS East Java (2022), the number of people
categorized as 'poor' in East Java is reported to be around
4,259,600 as of September 2021.

The study discusses the factors that influence the intention

of low-income households in East Java to participate in
mikrotakaful. It emphasizes the importance of factors such
as attitude, subjective norms, price, and knowledge, as well
as households' perceived need for mikrotakaful and their
readiness to invest in it. The findings provide valuable inputs
for policy makers and microinsurance providers to design
effective strategies to increase the uptake of microinsurance
among this demographic. In addition, the hypothesis testing
of this study provides a comprehensive understanding of the
behavioral intentions of the poor. This study underscores the
influence of price and perceived premium of microtakaful
on the intention of low-income households to participate in
microtakaful in East Java. Therefore, initiatives aimed at
increasing the uptake of microinsurance among low-income
households should focus on ensuring fair pricing, raising
awareness of costs, and addressing concerns regarding
affordability. The study also highlights the importance of
price as a determinant in shaping intentions, showing that
price construction is also a significant determinant in
influencing the intention of low-income households in East
Java to participate in microtakaful.

This study also emphasizes the importance of subjective

norms and attitudes in influencing the intention of low-
income households to participate in mikrotakaful. In
addition, this study highlights the importance of knowledge
and perception of mikrotakaful as determinants in shaping
the intention of low-income households in East Java to
participate in mikrotakaful. The findings of this study
provide valuable insights for policymakers and
microinsurance providers to design effective strategies to
increase the use of microinsurance among low-income
households in East Java. Testing the research hypotheses
provides a comprehensive understanding of the behavioral
intentions of low-income households in East Java towards
mikrotakaful. This research underscores the influence of
price and perceived premium of mikrotakaful on the
intention of low-income households to participate in
mikrotakaful in East Java. Therefore, initiatives aimed at
increasing the uptake of microinsurance among low-income
households should focus on ensuring fair pricing, raising
awareness of costs, and addressing concerns regarding
affordability.

The methodology used in this study is based on a

quantitative approach. The research was conducted using
questionnaires distributed to low-income households in East
Java. The data collected was then analyzed using statistical
methods to identify the relationship between factors such as
attitude, subjective norms, price, and knowledge with poor
households' intention to invest in microtakaful products. In
addition, this study also considers Islamic factors in the
context of mikrotakaful in Indonesia. The data analysis
method used in this study provides a comprehensive
understanding of the behavioral intentions of the poor in
East Java towards mikrotakaful, as well as providing a solid
basis for future policy recommendations.

In this journal, the research developed a conceptual model

based on the Theory of Planned Behavior/TPB to analyze
the factors that influence the intention of low-income
households in East Java towards mikrotakaful. The model
includes variables such as individual attitudes towards
mikrotakaful, subjective norms, mikrotakaful price, and
knowledge about mikrotakaful as predictors of intention to
participate in the mikrotakaful program.

In developing this model, the research constructed these

variables based on existing literature and modified them to
fit the research context. For example, the construction of the
variable "attitude" (ATT) combines four different indicators
to reflect an individual's attitude towards microtakaful.
Using this model, the study was able to comprehensively
analyze the influence of these factors on low-income
households' intention towards mikrotakaful, providing
valuable insights for the development of the mikrotakaful
program in East Java. The construction of these variables
was a complex process, derived and modified from existing
literature to fit the context of the study.
 This journal has a conceptual framework that describes the
relationship between attitude, subjective norm, price,
knowledge, and intention of low-income households in East
Java towards mikrotakaful. This framework serves as a
foundation for analyzing the factors that influence the
acceptance of mikrotakaful among low-income households
in the region. Acceptance of Mikrotakaful by Low Income
Households in East Java.

This study highlights the significant influence of factors

such as attitude, subjective norm, price, and knowledge on
the intention of low-income households in East Java to
participate in the mikrotakaful program. The findings
emphasize the importance of these factors in shaping
households' intention towards microinsurance, providing
valuable insights for policymakers and microinsurance
providers to design effective strategies to increase
microinsurance usage among this demographic.

The analysis of the study confirmed the consistency of the

impact of an individual's attitude towards microtakaful,
subjective norms, price, and knowledge on the intention to
participate in a microtakaful program. This consistency
strengthens the validity and generalizability of the research
findings, demonstrating the relevance of these factors in
influencing low-income households' attitudes towards
microtakaful in East Java, Indonesia.

Conclusions : The study of mikrotakaful acceptance among low-income

households in East Java showed a significant relationship
between attitude, subjective norm, price, and knowledge
with households' intention to participate in mikrotakaful.
The research findings indicate respondents' high interest and
willingness towards Islamic microinsurance, thus indicating
the potential for acceptance and adoption among low-
income households in East Java. The study provides
valuable insights for policy makers and microinsurance
providers, and offers recommendations for creating a cost-
effective program that benefits the economically
disadvantaged.

Based on a summary of some of the citations in the journal,

it is also concluded that this study shows that factors such as
attitude, subjective norms, price, knowledge, and
perceptions related to microtakaful premiums have a
significant influence on the intention of poor households in
East Java to participate in microtakaful products. Social
support from close contacts, friends, parents and siblings
also influence the decision-making process regarding
mikrotakaful among low-income households in East Java.

Knowledge about the inclusiveness of mikrotakaful

services, the basic principles of sharia, the absence of
interest charges, the tangible benefits of participation, and
the core principle of cooperation also play an important role
in shaping poor households' intention to participate in
mikrotakaful. Therefore, the findings highlight the
importance of these factors in designing strategies to
increase microtakaful literacy and microinsurance uptake
among underserved communities, especially in East Java,
Indonesia. This research makes a valuable contribution in
expanding the understanding of poor households' behavioral
intentions towards mikrotakaful and provides a solid basis
for future policy recommendations.
 Overall, the conceptual framework and analysis conducted
in this study highlight the factors that influence the
acceptance of microinsurance among low-income
households in East Java, emphasizing the importance of
attitude, subjective norms, price, and knowledge in shaping
their intention towards microinsurance products.
Power
research : The strengths of this research include:
1. The use of the Theory of Planned Behavior (TPB) as a
strong conceptual framework to analyze the intention of
low-income households towards mikrotakaful. TPB has
been proven effective in understanding human behavior.
2. The use of multiple linear regression analysis which
allows researchers to explore the relationship between the
independent variables (attitude, subjective norm, price,
knowledge) and the dependent variable (intention to
participate in mikrotakaful).
3. The use of a survey approach with a large enough sample
size (250-450 respondents) to collect data, which can
increase the validity and generalizability of the research
results.
4. The assumption tests conducted to ensure the validity and
reliability of the analysis conducted, demonstrating
prudence and rigor in the research process.
5. The finding that more than 60% of respondents expressed
their need for mikrotakaful and willingness to pay in the
future indicates the potential acceptance and uptake of
mikrotakaful among poor households in East Java,
providing positive implications for mikrotakaful policy and
practitioners.
 Thus, the strength of this study lies in the use of a strong
conceptual framework, appropriate analytical methods,
adequate sample size, maintained validity of the analysis,
and findings that provide valuable insights for microtakaful
policy makers and practitioners.

Research
weaknesses : This research has several weaknesses that need to be
considered:
1. Geographical limitations: This study is limited to a
specific region, namely East Java, Indonesia. This may
affect the generalizability of the research results to a wider
population outside the region.
2. Cultural Factors: This study may not have fully
considered cultural factors that may influence poor
households' intention towards mikrotakaful. These cultural
aspects can have a significant impact on acceptance and
participation in insurance products.
3. Theoretical Limitations: Although the study used the
Theory of Planned Behavior (TPB), it favored the
conventional viewpoint over the Islamic viewpoint. This
may reduce the depth of understanding of household
preferences towards mikrotakaful in East Java, Indonesia.
4. Data Limitations: This study may face limitations in data
collection that may affect the validity and reliability of the
research results. The use of limited data may limit the
conclusions that can be drawn from this study.
With these weaknesses in mind, future research should
expand the geographical coverage, consider cultural factors
in more depth, integrate Islamic perspectives more
significantly, and ensure the use of more comprehensive
data to support the research findings.