Determinants of Islamic financial inclusion in Indonesia: a demand-side analysis

Takidah, Erika and Kassim, Salina (2021) Determinants of Islamic financial inclusion in Indonesia: a demand-side analysis. Journal of Islamic Finance, 10 (2). pp. 38-52. ISSN 2289-2109 E-ISSN 2289-2117

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Abstract

The low number of Islamic financial inclusion has been a major problem to the Indonesian government because of the country has the largest Muslim population globally. This study aims to examine the Islamic financial inclusion determinants by collecting information from Muslim respondents. The determinants used include Islamic financial literacy, trust, financial self-efficacy, and social influence. The survey involved 215 respondents from West Java, Lampung, South Kalimantan, Gorontalo, and West Nusa Tenggara. All the participants involved in the study were included in Islamic financial institutions. Furthermore, the Exploratory Factor Analysis (EFA) and the Confirmatory Factor Analysis (CFA) methods were applied to classify Islamic financial inclusion determinants, while the Structural Equation Modelling was used to test the hypothetical relationships. The results showed that social influence is a significant determinant of Islamic financial inclusion in Indonesia. Therefore, policymakers and the Islamic financial industry need to improve social influence through campaigns that involve local culture and public or religious figures to enhance inclusion. Future studies need to provide other validated constructs to assess Islamic financial inclusion from the demand and supply aspects

Item Type:	Article (Journal)
Uncontrolled Keywords:	Islamic financial inclusion, Islamic financial literacy, trust, financial self-efficacy, social influence, exploratory factor analysis
Subjects:	H Social Sciences > HG Finance > HG3368 Islamic Banking and Finance
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button):	Institute of Islamic Banking & Finance (IIiBF)
Depositing User:	Prof. Dr. Salina Kassim
Date Deposited:	25 Mar 2022 12:21
Last Modified:	25 Mar 2022 12:21
URI:	http://irep.iium.edu.my/id/eprint/97354

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