FACTORS THAT AFFECT NON-MUSLIM
CUSTOMERS’ PREFERENCE AGAINST ISLAMIC
DEPOSIT PRODUCTS IN MALAYSIA
BY
CHOONG JIA BIN
LIM CHEW HOONG
ONG KAH YONG
SEAH CHIA LOK
TAN YI XIN
A research project submitted in partial fulfilment of the
requirement for the degree of
BACHELOR OF BUSINESS ADMINISTRATION
(HONS) BANKING AND FINANCE
UNIVERSITI TUNKU ABDUL RAHMAN
FACULTY OF BUSINESS AND FINANCE
DEPARTMENT OF FINANCE
JANUARY 2017
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
ii
Copyright @ 2017
ALL RIGHT RESERVED. No part of this paper maybe produced, stored in a
retrieval system, or transmitted in any form or by any means, graphics, electronic,
mechanical, photocopying, recording, or otherwise, without the prior consent of the
authors.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
iii
DECLARATION
We hereby declare that:
(1) This undergraduate research project is the end result of our own work and
that due acknowledgement has been given in the references to ALL sources
of information be they printed, electronic, or personal.
(2) No portion of this research project has been submitted in support of any
application for any other degree or qualification of this or any other
university, or other institutes of learning.
(3) Equal contribution has been made by each group member in completing the
research project.
(4) The word count of this research report is 21,122 words.
Name of Student: Student ID: Signature:
1. CHOONG JIA BIN 1303992
2. LIM CHEW HOONG 1406603
3. ONG KAH YONG 1305845
4. SEAH CHIA LOK 1406582
5. TAN YI XIN 1303372
Date:
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
iv
ACKNOWLEDGEMENT
It is appreciated that our research project has been successfully conducted with the
assistance of various authorities. Hence, we would like to grasp this opportunity to
express our sincere appreciation and acknowledge those who had been contributed
towards our research project.
First and foremost, we would like to express thanks to Universiti Tunku Abdul
Rahman (UTAR) for giving us such a good opportunity to conduct this research
project which is useful for our future. Throughout this research project, it enables
us to obtain specific knowledge and skill which is very valuable to us. Also, it
allows us to build up strong friendship and cooperation through the teamwork in
this project.
Besides that, we want to express our deepest grateful to our supervisor, Puan Siti
Nur Amira binti Othman who has advised and guided us patiently in completing
this project. We appreciate her contribution and it is our pleasure to be under her
supervision as she shares many of her opinions and gives us valuable guidance in
order to assist us to achieve our objectives of this research. Moreover, we able to
complete our research project on time satisfactorily with her patient guidance and
full support.
Apart from that, we would also like to take this opportunity to thank and appreciate
our second examiner, Cik Zainon Binti Md. Yunus. During our VIVA presentation,
she has pointed out some weaknesses of our project and also suggested solutions
for us to further enhance our research project. We appreciate her advice as it helps
to improve our research project to be more perfect.
In addition, we would like to acknowledge to all the respondents for their
participation, cooperation and enthusiasm in our questionnaire surveys. We
appreciate all the respondents who are willing to spend their precious time to fill up
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
v
the questionnaire. Last but not least, we are grateful to all our team members for
their cooperation, tolerance and contribution towards this research project.
Once again, we would like to express a sincere gratitude to all of you. Thank you.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
vi
DEDICATION
We would like to express our sincere gratitude to our honour supervisor, Puan Siti
Nur Amira binti Othman, for her valuable guidance, advice and motivation in
assisting the completion of this research project.
Furthermore, we would like to dedicate this research project to our family members
for the appreciation of their encouragement and financial support. Moreover, this
research project is dedicated to all of our group members who have contributed
most of the time, effort, energy, knowledge and cooperation in conducting this
research. Our collaboration, understanding, respect and enthusiasm towards this
research highly lead to the completion of this research project.
Apart from that, this research project is dedicated to the public who has assisted in
the success of the survey conduction. We would like to express special thank to
them for their participation and the valuable information provided to complete this
research.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
vii
TABLE OF CONTENTS
Page
Copyright Page ……………………………………………………………. ii
Declaration ………………………………………………………………… iii
Acknowledgement ………………………………………………………… iv
Dedication ………………………………………………………………. vi
Table of Contents ………………………………………………………….. vii
List of Tables ……………………………………………………………. xiii
List of Figures …………………………………………………………… xv
List of Appendix…………………………………………………………… xvi
Preface……………………………………………………………………. xvii
Abstract…………………………………………………………….. ……...xviii
CHAPTER 1 RESEARCH OVERVIEW…………………………….. 1
1.0 Introduction………………………………………………. 1
1.1 History of Islamic Deposit Products……………………… 1
1.1.1 What is Islamic Deposit Products?............................ 2
1.1.1.1 Current Account………………………….. 4
1.1.1.2 Savings Account………………………….. 4
1.1.1.3 Investment Account………………………. 5
1.1.1.4 Certificate of Deposits…………………….. 5
1.2 Problem Statement……………..………………………….. 5
1.3 Research Objectives………………………………………. 7
1.3.1 General Objectives………………………………… 7
1.3.2 Specific Objectives……………………………… 7
1.4 Research Questions……………………………………… 7
1.5 Hypothesis of the Research………………………………… 8
1.5.1 Sharia Compliance…………………………………. 8
1.5.2 Knowledge of non-Muslim Customers…………….. 8
1.5.3 Trust and Confidence………………………………. 8
1.5.4 Flexibility of Withdrawal…………………………... 8
1.6 Significance of the Research………………………………. 9
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
viii
1.7 Chapter Layout………………………………………….. 10
1.8 Conclusion…………………………………………………. 10
CHAPTER 2 LITERATURE REVIEW……………………………... 11
2.0 Introduction……………………………………………… 11
2.1 Literature Review………………………………………… 11
2.1.1 Depndent Variable……………………………… 11
2.1.1.1 Preferences of non-Muslim Customers…… 11
2.1.2 Independent Variable…………………….……….. 13
2.1.2.1 Sharia Compliance……………………….. 13
2.1.2.2 Knowledge of non-Muslim Customer ……. 15
2.1.2.3 Trust and Confidence ………………….….. 18
2.1.2.4 Flexibility of Withdrawal………………….. 19
2.2 Review of Relevant Theoretical Methods………………. 21
2.3 Proposed Theoretical / Conceptual Framework……..……. 22
2.4 Hypothesis Development…………………………………. 23
2.4.1 Sharia Compliance…………………………………. 23
2.4.2 Knowledge of non-Muslim Customers…………….. 23
2.4.3 Trust and Confidence………………………………. 25
2.4.4 Flexibility of Withdrawal………………………….. 25
2.4.5 Four Independent Variables……………………….. 26
2.5 Conclusion……………………………………………….… 26
CHAPTER 3 METHODOLOGY…………………………………….…. 27
3.0 Introduction………………………………………………… 27
3.1 Research Design…………………………………………… 27
3.1.1 Descriptive Research………………………………. 27
3.1.2 Quantitative Research……………………………… 28
3.2 Data Collection Method………………………………….… 28
3.2.1 Primary Data……………………………………….. 28
3.3 Sampling Data……………………………………………… 28
3.3.1 Target Populations…………………………………. 29
3.3.2 Sampling Frame and Sampling Location…………... 29
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
ix
3.3.3 Sampling Elements………………………………… 30
3.3.4 Sampling Techniques……………………………… 30
3.3.5 Sampling Size……………………………………… 30
3.4 Research Instrument……………………………………….. 30
3.4.1 Questionnaire Design………………………………. 30
3.4.2 Pilot Test………………………………………….... 31
3.4.2.1 Result of Pilot Test………………………… 31
3.5 Construct Measurement…………………………….……… 32
3.5.1 Section A of Questionnaire……………………….... 32
3.5.2 Section B of Questionnaire………………………… 32
3.5.3 Section C of Questionnaire………………………… 32
3.6 Data Processing…………………………………………….. 38
3.7 Data Analysis………………………………………………. 39
3.7.1 Descriptive Analysis……………………………….. 39
3.7.2 Scale Measurement………………………………… 39
3.7.2.1 Reliability Test……………….……………. 39
3.7.3 Inferential Analysis………………………………… 40
3.7.3.1 Pearson Correlation Coefficient Analysis…. 40
3.7.3.2 Multiple Linear Regression Analysis……… 41
3.8 Conclusion…………………………………………………. 43
CHAPTER 4 DATA ANALYSIS………………………………………... 44
4.0 Introduction………………………………………………… 44
4.1 Descriptive Analysis……………………………………….. 45
4.1.1 Respondents’ Demographic Profile………………... 45
4.1.1.1 Age…………………………………………. 45
4.1.1.2 Race…………………………………………46
4.1.1.3 Marital Status………………………………. 47
4.1.1.4 Highest Education Level…………………… 48
4.1.1.5 Employment Status………………………… 49
4.1.1.6 Monthly Income…………………………… 50
4.1.2 Central Tendencies Measurement of Construct……. 52
4.1.2.1 Sharia Compliance (SC)…………………... 53
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
x
4.1.2.2 Knowledge of non-Muslim Customers
(KOC)…………………………………….... 55
4.1.2.3 Trust and Confidence (TC)………………… 57
4.1.2.4 Flexibility of Withdrawal (FW)……………. 60
4.1.2.5 Preferences of non-Muslim Customer (CP)…62
4.2 Scale Measurement………………………………………… 64
4.2.1 Internal Reliability Test……………………………. 64
4.3 Inferential Analysis………………………………………… 66
4.3.1 Pearson Correlation Analysis………………………. 67
4.3.1.1 Correlation between Sharia Compliance and
Preferences of non-Muslim Customer toward
Islamic Deposit Products............................. 68
4.3.1.2 Correlation between Knowledge of
non-Muslim Customers and Preferences of
non-Muslim Customer toward Islamic
Deposit Products…………………………… 69
4.3.1.3 Correlation between Trust and Confidence
and Preferences of non-Muslim Customer
toward Islamic Deposit Products…………... 70
4.3.1.4 Correlation between Flexibility of
Withdrawal and Preferences of non-Muslim
Customer toward Islamic Deposit
Products………………………………….. 72
4.3.2 Multiple Regression Analysis……………………… 73
4.3.2.1 Diagnostic Checking……………………….. 73
4.3.2.1.1 Normality Test………………….. 73
4.3.2.1.2 Multicollinearity Checking………. 74
4.3.2.1.3 Durbin Watson Test
(Autocorrelation)………........….... 74
4.3.2.2 Multiple Linear Regression Model………… 75
4.3.2.2.1 Coefficient of Determination(R2)…77
4.3.2.2.2 Adjusted Coefficient of
Determination (Adjusted R2)…...… 78
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
xi
4.3.2.2.3 ANOVA Table……………...……. 78
4.3.3 Hypothesis Testing………………………………….79
4.3.3.1 Overall F-test (Hypothesis E)……………….79
4.3.3.2 T-test Hypothesis A………………………... 80
4.3.3.3 T-test Hypothesis B…………………………80
4.3.3.4 T-test Hypothesis C…………………………81
4.3.3.5 T-test Hypothesis D………………………... 81
4.4 Conclusion………………………….……………………… 82
CHAPTER 5 DISCUSSION AND CONCLUSION…………………… 83
5.0 Introduction……………………………….……………….. 83
5.1 Summary of Statistical Analysis………………………….. 83
5.1.1 Descriptive Analysis………………………………. 83
5.1.1.1 Respondents’ Demographic Profile………. 83
5.1.1.2 Central Tendencies Measurement of
Construct………………………..……..…… 84
5.1.1.3 Scale Measurement………………………… 86
5.1.2 Inferential Analysis………………………………… 86
5.1.2.1 Pearson Correlation Analysis………………. 86
5.1.2.2 Multiple Linear Regressions……………….. 88
5.2 Discussion on Major Findings……………………………... 89
5.2.1 The effect of all independents variables on
preferences of non-Muslim customers toward
Islamic deposit product…………..……………….. 90
5.2.2 The effect of Sharia compliance on preferences
of non-Muslim customers toward Islamic deposit
products…………………………………..……….. 90
5.2.3 The effect of knowledge of non-Muslim customers
on preferences of non-Muslim customers toward
Islamic deposit products………………………...…. 91
5.2.4 The effect of trust and confidence on preferences of
non-Muslim customers toward Islamic deposit
products…………………………………………..... 92
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
xii
5.2.5 The effect of flexibility of withdrawal on preferences
of non-Muslim customers toward Islamic deposit
products…………………………………………..… 93
5.3 Implications of the Study………………………….……….. 95
5.3.1 Managerial Implication……………………….……. 95
5.4 Limitation of Study……………...…………..…………… 96
5.5 Recommendation for Future Researches………………….. 97
5.6 Conclusion………………………………………………… 98
References…………………………………………………………………. 99
Appendix…………………………………………………………………… 113
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
xiii
LIST OF TABLES
Page
Table 3.1 : Pilot test reliability test results : Dependent Variable
(Preferences of non-Muslim Customers toward Islamic
Deposit Products)………………………………………….. 31
Table 3.2 : Pilot test reliability test results : Independent Variable ….. 31
Table 3.3 : Questionnaire Section B………………………………….. 33
Table 3.4 : Questionnaire Section C………………………………….. 37
Table 3.5 : Cronbach’s Alpha Coefficient Value…………………….. 40
Table 3.6 : Interpreting the Size of a Correlation Coefficient……….. 41
Table 4.1 : Respondent Demographic of Age………………………… 45
Table 4.2 : Respondent Demographic of Race………………………. 46
Table 4.3 : Respondent Demographic for Marital Status…………….. 47
Table 4.4 : Respondent Demographic of Highest Education Level….. 48
Table 4.5 : Respondent Demographic of Employment Status………... 49
Table 4.6 : Respondent Demographic of Monthly Income…………… 50
Tabl4 4.7 : Central Tendencies Measurement of Construct : Sharia
Compliance……………………………………………….... 53
Table 4.8 : Central Tendencies Measurement of Construct :
Knowledge of non-Muslim Customers……………………. 55
Table 4.9 : Central Tendencies Measurement of Construct :
Trust and Confidence……………………………………… 57
Table 4.10 : Central Tendencies Measurement of Construct :
Flexibility of Withdrawal…………………….……………. 60
Table 4.11 : Central Tendencies Measurement of Construct :
Preferences of non-Muslim Customers …………………… 62
Table 4.12 : Reliability Test of Dependent Variable (Preferences of non-
Muslim Customers toward Islamic deposit products).. …… 65
Table 4.13 : Reliability Test of Independent Variables……………….. 65
Table 4.14 : Rules of Thumb about Correlation Coefficient Size…….. 61
Table 4.15 : Pearson Correlation Analysis………………….…………. 62
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
xiv
Table 4.16 : Correlation between Sharia compliance and preferences
of non-Muslim Customers toward Islamic deposit
products……………………………………………………. 68
Table 4.17 : Correlation between knowledge of non-Muslim customers
and preferences of non-Muslim Customers toward Islamic
deposit products…………………………………………… 69
Table 4.18 : Correlation between trust and confidence and preferences
of non-Muslim Customers toward Islamic deposit products 70
Table 4.19 : Correlation between flexibility of withdrawal and
preferences of non-Muslim Customers toward Islamic
deposit products……………………………..…………….. 72
Table 4.20 : Skewness and Kurtosis of Residuals…………………….. 73
Table 4.21 : Collinearity Table………………………..……………….. 74
Table 4.22 : Durbin Watson Result…………………….………………. 74
Table 4.23 : Coefficient Table…………………………………………. 76
Table 4.24 : Model Summary………………………………………….. 77
Table 4.25 : ANOVA table for multiple linear regression…………….. 78
Table 5.1 : Summary of the results of hypothesis testing……………. 89
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
xv
LIST OF FIGURES
Page
Figure 1.1 :Islamic Banking Statistics ……………………………… 3
Figure 1.2 :Islamic Banking Statistic – Deposits…………………….. 3
Figure 2.1 : Research Model in Aziza & Awais’ Study……………….. 21
Figure 2.2 : Conceptual Framework That Determine the Factors of
on-Muslim Customers’ Preferences toward Islamic
Deposit Products…………………………………………. 22
Figure 3.1 : Median and Mean monthly salaries of employees by
states, Malaysia 2015-2016………………………………… 29
Figure 4.1 : Respondent Demographic of Age………………………… 45
Figure 4.2 : Respondent Demographic of Race……………………….. 46
Figure 4.3 : Respondent Demographic for Marital Status……………. 47
Figure 4.4 : Respondent Demographic of Highest Education Level...… 48
Figure 4.5 : Respondent Demographic of Employment Status……….. 50
Figure 4.6 : Respondent Demographic of Monthly Income…………… 51
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
xvi
LIST OF APPENDIX
Page
Appendix A : Survey Questionnaire…………………………………….. 113
Appendix B : Pilot test reliability output……………………………….. 121
Appendix C : Frequency output………………………………………… 125
Appendix D : Reliability test output……………………………………. 139
Appendix E : Correlation output……………………………………….. 144
Appendix F : Normality test output…………………………………….. 145
Appendix G : Collinearity output……………………………………….. 147
Appendix H : Multiple linear regression model output…………………. 150
Appendix J : Chi square distribution table……………………………... 153
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
xvii
PREFACE
In this modern era, Islamic banking is an important banking system that helps to
facilitate current financial system. Bank Islam Malaysia started it operation in 1983.
Sharia finance is a blend of Islamic Economies and modern lending principles, its
products can be sold to Muslims and non-Muslims alike. The increased of
competition and the overall structure among Islamic banks have drawn the purpose
of conducting this research in order to have a deeper understanding on the affect
non-Muslim customers’ preference against Islamic deposit products in Malaysia.
This research is conducted to enable the Islamic bankers to gain better
understanding on the Sharia Compliance, Knowledge of non-Muslim customers,
Trust and Confidence, Flexibility of Withdrawal toward the non- Muslim
customer.This study contributes to Islamic banking by enable the Islamic bankers
to formulate different strategies and policies to attract more non-Muslims banking
users. In addition this research is conducted in order to provide meaningful result
and broaden the the Islamic deposit products in Malaysia.
The beginning of the process for conducting this research is complicated. However,
we have separated all the parts to each person to complete our research. We shared
the knowledge, ideas and solutions together in order to solve the problems faced
while conducting our research. We believe that teamwork is very important to
complete our research on time. After conducting this research, we realize that we
have deeper understanding on our topic and it could enhance our knowledge and
apply in future career.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
xviii
ABSTRACT
Being one of the strongest proponents of Islamic Banking, Malaysia has been
promoting the idea of implementing Islamic Banking System (IBS) with the
purpose to expand the ring of unity among Muslims and to ensure a fair distribution
and utilization of fund in compliances with Islamic Principles in order to parallel
the conventional system. The existence of financial institutions for both Islamic and
conventional, Malaysians have been presented with numerous choices to choose the
products and services that meet their needs and wants. This study provides
important contribution to the Islamic bankers in understanding customer attitudes,
preferences and characteristics. In addition, this study also aims to investigate if any
demographic influence the awareness, understanding and perceptions of Islamic
Banking products and services among non-Muslims in Malaysia.
A total sample size of 250 respondents is drawn from Malaysia. The results show
that more than half of the respondents are aware of the Islamic banking products
and services in Malaysia. Multiple Linear Regression analysis is then conducted,
and all independent variables have significant positive effect on preferences of non-
Muslim customers, where independent variable Sharia compliance, knowledge of
non-Muslim customers, trust and confidence, flexibility of withdrawal toward the
non- Muslim customer. Besides, confidence in Islamic banking has the highest
Cronbach’s alpha and the strongest impact on acceptance level. For the analysis,
one way ANOVA and Pearson Correlation Coefficient was adopted to analyses the
results. This study also provides theoretical and managerial implications for the
Islamic bankers to attract non-Muslims customers and recommendations for future
research in Islamic Banking.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
1
CHAPTER 1: RESEARCH OVERVIEW
1.0 Introduction
This research discussed about the factors that affect non-Muslim customers’
preference against Islamic deposit products in Malaysia. This chapter separated into
eight sections to discuss about history of Islamic deposit products in Malaysia,
definition of Islamic deposit product, problem statements, objectives of research
and questions, hypothesis of the research, significance of the research, chapter
layout and conclusion. First of all, the background of the research briefly explained
about the Islamic deposit products in Malaysia. Following from that, the problem
statements and research questions discussed and stated the purpose of this research.
Thus, research objectives and hypothesis will be a guideline to conduct this research.
Lastly, this research will be concluded with a summary of this research, limitations
of this research, and recommendations for future research.
1.1 History of Islamic Deposit Products
It is revealed that the primary sources of fund for Islamic banks are deposit products.
Based on the study by Yusoff and Wilson (2005), Islamic banks and counters or
branches was opened in conventional banks in Malaysia and offer Islamic products
in order to obtain profit sharing rather that interest earning. The authors also further
expound that the demand deposits offer by Islamic bank is based on the guaranteed
custody concept (al-wadiah) which have relation to one person pass his or her asset
to another person for safekeeping on purpose while investment deposit is based on
the profit sharing concept (al-mudarabah) which related to one person provide
capital to another person for purpose of investment. The agreement between Islamic
bank and depositors does not mention a specific rate of return in investment or
deposit The parties of the contract just set the ratio to distribute the profits and losses.
According to Amin (2013), majority of banks offer all kinds of deposit products
based on bank policies, operation and marketing strategies. In short, deposit
products help surplus units transfer the funds to deficit units. Entrepreneur is one of
the deficit units who utilize the accumulated funds mobilize from surplus unit to do
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
2
different projects. Those funds are allocated in varies projects and sectors that
involved with many type of risk related to the employment of fund. Thus, the
depositors may earn dividend when the deposit or investment make profit. Likewise,
the depositors will lose a part of capital they invested when losing in investment
and deposit. By and large, Islamic bank play the vital role to accept funds and utilize
funds financing purpose, investment purpose or in profit making activities
compliant with Sharia laws.
1.1.1 What is Islamic Deposit Products?
Malaysia established the first Islamic bank in 1983 with the formation of Bank Islam
Malaysia Berhad (BIMB). As some other banks in Malaysia, the Central Bank of
Malaysia (also known as Bank Negara Malaysia) governs the operation of Islamic
banks; the Islamic Banking Act1983 covers the jurisdiction (Central Bank of
Malaysia, n.d.). The operation of the Islamic banking system is same with the
conventional system. This means that the government allows the Islamic banks to
compete with conventional banks without favouring either.
Islamic deposit products which are Islamic banks’ strength basis form in accordance
with Sharia law. They use these deposits’ money to help customers invest and earn
profit. Thus, in banks side, deposits are liabilities. Islamic deposits may be based
on Mudarabah and Wakalah structures. For the example, Islamic deposit products
such as Islamic current deposit is known as current account-i, Islamic savings
account known as savings account-i, Islamic investment account known as Islamic
fixed deposit, and so on.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
3
Figure 1.1 : Islamic Banking Statistics
Source : http://www.oicstatcom.org/imgs/news/presentations/1015-
MALAYSIA.pd
Figure 1.2 : Islamic Banking Statistics - Deposits
Source : http://www.oicstatcom.org/imgs/news/presentations/1015-MALAYSIA.pdf
Above is show about the statistic of Islamic banking between the years 2006-2012.
The statistic shows the pre-tax profit result of banking system, commercial bank,
investment and Islamic bank. In 2010, MIFC, BNM, SC, Labuan FSA, Bursa
Malaysia and DOSM work together in estimate value added Islamic capital market
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
4
activities. Besides, nature of capital market structure in Malaysia is where the same
enterprises offering both products.
1.1.1.1 Current Account
Current account is the cheque account, which means customers use the cheque to
make payments, and usually without paying any ‘interest’. This is because the
Islamic bank will not use fund for investment purpose, they just used to profit
sharing. Current account-i is under a control based on the concept of wadiah or the
combination between wadiah (guaranteed custody) and mudarabah (profit-sharing)
(Kontota et al, 2016). According to Amin, the end of the product name which has
letter ‘i’ such as “current account-i” that mean the products processing with Sharia
Compliance, and that its services which are no any riba-taking activities. For the
example: Wadi’a-wad-dhamana or guaranteed deposits, qard hasan current account.
1.1.1.2 Savings Account
According to Haron & Wan-Azmi (2008), customers would ordinarily choose
savings account due to satisfying precautionary motives. Amin represent that the
concept of savings account-i, is based on the concept of rabbul mal and mudarib,
where the customer is still viewed as the rabbul mal because the customers
contribute funds to the bank. On the other hand, the bank is the mudarib because
the bank employs such funds for various types of halal investments in order to earn
profits from the business transactions undertaken (Amin).
Rosly and Mohd-Zaini (2008) explained that Islamic banks will give the ‘gift’ to
the savings account holder which is the returns. The returns known as hiba, which
is context of reward profit based on the banks performances (Abdul-Rahman, 2005).
If the bank generates more profit from its banking business, greater amount of hiba
is given and credited to the customer’s savings account. If the bank getting loss, no
hiba provided, and the customer will not get any loses from their deposit within the
bank. For example: Wadi’a Model, Mudharaba Model, Al Qard Al Hasan Model
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
5
1.1.1.3 Investment Account
Islamic fixed deposits are based on a “profit-sharing ratio” and heavily depend on
the performance of the bank (Utusan Online, 2005b). It is different with the savings
account-i, the investment account-i is more focused on long term saving and has
higher price (Amin). According to Amin, the major goal of the investment account
is to gain maximum profit during the time in which it is invested. During that time
however, the customer may also lose his money if the investment by the bank is at
a loss but this situation rarely happens (Amin). However, it is depends on the bank’s
policy. For the example: General Investment Account-i (GIA), Special Investment
Account-i(SIA)
1.1.1.4 Certificate of deposits
A certificate of deposit (CD) is a time deposit, a financial product typically sold in
the United States and elsewhere by banks, thrift institutions, and credit unions. CDs
are like savings accounts in that they are insured "money in the bank" and thus
virtually risk free. In the USA, CDs are guaranteed by the Federal Deposit Insurance
Corporation (FDIC) for banks and by the National Credit Union Administration
(NCUA) for credit unions. They contrast from savings accounts in that the CD has
a specific, fixed term (usually one, three, or six months, or one to five years) and,
usually, a fixed interest rate. The banks have to arrange that the customer holds the
CD until maturity, at which time they can withdraw the money and accrued interest.
1.2 Problem Statement
The wider increase of the products coverage area and the proficiency to overcome
the global economic downturn had gain the popularity among non-Muslims. The
outstanding performance of Islamic banking creates a remarkable image in banking
sector and a new dimension was generated due to the changes in the Malaysian
financial landscape. Some scenario cause customers preference changed and
demand for high quality banking services.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
6
Since the competition between the banks becomes fierce, the financial institutions
decide to development more conventional and Islamic customers to attract Muslims
and non-Muslims for choosing the banking products and services. Rather,
customers currently are difficult to make decisions to pick the ones that address
their issues and needs. This situation applies to the Islamic banking system as
conventional bank can offer Islamic products and services under the dual-window
concept. There is different literature review found that the customers was influenced
by the services, products, trustworthy and the availableness of outlets to before
make decision to choose the Islamic products offer by Islamic banking. Hence,
based on Islamic scholars Tengku Wasimah, R, H, Rosemaliza, A, R & Abu Bakar,
H (2015) mentioned that the customers receive Islamic banking services was not
only influence by Islamic branding. From the information from examination found
that non-Muslims take Islamic administrations because of Islamic marking as well
as some different components. For example, knowledge of customers, Sharia
compliance, trust and confidence, flexibility of withdrawal scheme etc.
The demand of Islamic banking services was increased due to the Sharia principle
which complies on the commercial products and services in Malaysia. These issues
make numerous Muslim changed from ordinary to Islamic managing an account
items. Due to the well management of the operational base, regulatory framework
system and profitability, Malaysia’ society choose to support Islamic banking
industry. However, the quantity demand from customers was strong and causes the
problem of supply to industry. These days, clients are required to have more
information in saving money, interest for valuable items and administrations
(Aslamet al., 2011). There is always a doubt that the employee from Islamic banks
is well training and knowledgeable in Islamic products which can fulfil the needs
of customers. In the research by Zainol et al. (2008) argue that minority of the
bankers had insufficient knowledge to be accomplished with the banks.
Therefore, there are four main independent variables have been adopted in this
research to determine which variables is the most important factor for the customers
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
7
to choose Islamic banking services. The four independent variables which
mentioned above will be explained with the support of literature review in next
chapter.
1.3 Research Objectives
1.3.1 General Objective
To study the factors that affect the preferences of non-Muslim customers toward
Islamic deposit products in Malaysia.
1.3.2 Specific Objectives
a) To examine the relationship between Sharia compliance and the preferences
of non-Muslim customers toward Islamic deposit products in Malaysia.
b) To determine the relationship between knowledge of non-Muslim customers
and the preferences of non-Muslim customers toward Islamic deposit
products in Malaysia.
c) To examine the relationship between trust and confidence and the
preferences of non-Muslim customers toward Islamic deposit products in
Malaysia.
d) To determine the relationship between flexibility of withdrawal and the
preferences of non-Muslim customers toward Islamic deposit products in
Malaysia.
1.4 Research Questions
a) Are there any relationship between the Sharia compliance and non-Muslim
customers’ preferences against Islamic deposit products in Malaysia?
b) How well the non-Muslim customers understand about the Islamic deposit
products in Malaysia?
c) What are the level of trust and confidence for non-Muslim customers toward
Islamic deposit products in Malaysia?
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
8
d) What are the relationship between the flexibility of withdrawal and non-Muslim
customers’ preferences against Islamic deposit products in Malaysia?
1.5 Hypothesis of the Research
1.5.1 Sharia Compliance
H0A : There is no significant relationship between the Sharia compliance and the
preferences of non-Muslim customers toward Islamic deposit products in Malaysia.
H1A : There is significant relationship between the Sharia compliance and the
preferences of non-Muslim customers toward Islamic deposit products in Malaysia.
1.5.2 Knowledge of non-Muslim Customers
H0B : There is no significant relationship between the knowledge of non-Muslim
customers and the preferences of non-Muslim customers toward Islamic deposit
products in Malaysia.
H1B : There is significant relationship between the knowledge of non-Muslim
customers and the preferences of non-Muslim customers toward Islamic deposit
products in Malaysia.
1.5.3 Trust and Confidence
H0C : There is no significant relationship between the trust and confidence and the
preferences of non-Muslim customers toward Islamic deposit products in Malaysia.
H1C : There is significant relationship between the trust and confidence and the
preferences of non-Muslim customers toward Islamic deposit products in Malaysia.
1.5.4 Flexibility of Withdrawal
H0D : There is no significant relationship between the flexibility of withdrawal and
the preferences of non-Muslim customers toward Islamic deposit products in
Malaysia.
H1D : There is significant relationship between the flexibility of withdrawal and the
preferences of non-Muslim customers toward Islamic deposit products in Malaysia.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
9
1.6 Significance of the Research
This research emphasizes on the knowledge of non-Muslim customers for Islamic
deposit products, Sharia compliance, trust and confidence and the flexibility of
withdrawal scheme that affect the non-Muslim customers’ preferences against
Islamic deposit products in Malaysia. Since Malaysia is an Islamic hub in the world,
this research emphasizes on the preferences of non-Muslim customers toward
Islamic deposit products in Malaysia.
The Islamic services and products are considered well-received by non-Muslim
customers but the researchers were unsure about the customers’ preferences and the
potential of Islamic products in the future. Non-Muslim customers will consider to
establish a banking relationship with Islamic bank by taking the Islamic deposit
products if the bank have sufficient information of banking operations. Non-
Muslims customer will consider to involve in Islamic banking if the banks gave
higher confidence level to the non-Muslim customers.
Hence, through this research, the Islamic banks in Malaysia can have a better
understanding on the non-Muslim customers’ knowledge and preferences towards
the Islamic deposit products. Therefore, the banks can structure different strategies
and types of products to expand the Islamic deposit products business by increasing
the market among non-Muslim customers. In short, the Islamic deposit products
will become more popular among non-Muslim in Malaysia.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
10
1.7 Chapter Layout
This report will be followed by the literature review of previous researches in
Chapter 2. The next chapter, Chapter 3 is the discussion on the methodology used
of this research. The interpretations and results will be presented in Chapter 4. The
last chapter, Chapter 5 of this research will be concluded by a summary, implication
of the findings, limitations of the research and recommendations for future research.
1.8 Conclusion
This chapter consist of basic knowledge of Islamic deposit products, problem
statement, research objectives and research questions of this research. The
hypothesis and significance of this research can also be clearly understood in this
chapter. The chapter outline that need to study is the factors that affect the
preferences of non-Muslim customers toward Islamic deposit products in Malaysia
also stated in this chapter.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
11
CHAPTER 2 : LITERATURE REVIEW
2.0 Introduction
In Chapter 2 will discuss about the relationship between dependent variable which
is the preferences of non-Muslim customers toward Islamic deposit products in
Malaysia and independent variables which are Sharia compliance, knowledge of
non-Muslim customers, trust and confidence, and flexibility of withdrawal. This
chapter will cover literature review, review of relevant theoretical models, proposed
theoretical or conceptual framework, hypotheses development and a conclusion of
the chapter. In this chapter relevant established theories will be listed to show that
the relationship between the selected independent variables and the dependent
variable.
2.1 Literature Review
2.1.1 Dependent Variable
2.1.1.1 Preferences of non-Muslim customer
Customer preference defines a customer desires for one collection of product and
services over another or how ordering alternative of a collection of product and
services. This definition assumes customers order the products and services are
based on the amount of satisfaction, utility and afforded. Customer preference
theory does not take the income of customer, purchasing power for a product or
service and price of goods and services (Raines, 2011).
According to Jalir and Rahman (2014), the finding of the research shows the
respondents are influenced by perception of services, convenience of services and
ethical organization. But, they are not influenced by Islamic branding to choose
Islamic banking services. The finding shows the dependent variable ‘consumers’
preference toward the Islamic banking services’ and independent variable ‘services’
perception’ are strong positive relationship. However, there are some limitations in
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
12
his study which are the sample size was not more than 200, data collected from
different place in a city and too less non-Muslim respondent.
Apart from that, Haque, Osman and Ismail (2009) conducted a research on
Malaysia’s customer preferences to examine the factor influence selection of
Islamic banking. The results indicates that customer preferences influenced by the
bank service quality on performance which similar with the research conducted by
Dusuki and Abdullah (2007) stated that the customer satisfaction is depend on the
service quality of Islamic bank. Findings show that higher standard of quality
services will increase the customer preference and satisfaction. There are significant
relationships between customer perception and service quality, finally availability
of services and social and religious perspective since their coefficients are positive
values. But, there is negative value which indicated insignificant relationship
between confidence and customer perception and less effect on customer perception
for Islamic bank product selection.
Furthermore, Hamzah, Ishak and Nor (2015) conduct a study about the relationship
between customer satisfaction and the quality of services of Islamic banks in
Malaysia. This study shows that there is significant relationship between the
customer satisfaction and services quality and with the positive value of coefficient
(Hamzah, Ishak and Nor, 2015; Dusuki and Abdullah, 2007; Haque, Jamil and
Ismail, 2009). Hence, Islamic banks should take several steps to improve their
quality of services to keep marketed and maintain a top premium position. Further
researchers are recommended to do a comparison between the customer's’
preference and quality of services offer by conventional and Islamic bank that
provide Islamic banking.
Besides, Shahid, Mehmood, Ahmad, Ahmad and Shafique (2015) carry out a
research about the Malaysian consumer preferences for islamic attributes to
examine selection area of Malaysian customer towards Islamic banking. It was
affected by quality of service, accessibility to their clients, relationship with
customer, professional advice and employee skill and information. By using
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
13
quantitative method, it shows the favourite of Islamic banking is not influenced by
religious but affect by quality of service.
According to Doraisamy, Shanmugam, and Raman (2011), the result indicates that
the customers’ preferences against the Islamic banking products and services will
influence by three main factors. Those factors are awareness, profitability and
service quality. Based on the analysis, it shows that all three variables have
interaction with each other and effect on customers’ preferences toward the Islamic
deposit product and services among Sungai Petani. Among these three independent
variables, two variables which are profitability and quality have a great influence
against the customer's’ preference on Islamic product and services.
According to Metawa and Almossawi (1998), academic background is a factor will
influence customers’ preference toward the Islamic deposit product. Majority of the
Islamic bank customers are well educated and fall between 25-50years. It means the
higher the education level will increase the customer's preference and satisfaction.
The data was collected from customer in the state of Bahrain.
2.1.2 Independent Variables
2.1.2.1 Sharia Compliance
The amount of Non-Muslims customers toward Islamic products were increases
compared from the past as the Sharia principle attract the loyalty from the customers.
The Islamic products which comply with Sharia principle make the products easily
differentiate from the products offered by others conventional banks. From the
research by Md. Abdul Jalil and Muhammad Khalilur Rahman, the result from
questionnaire identify that is a positive relationship between the Non-Muslims
customers toward Islamic banking on Islamic banking services. The Islamic
products had attract the attention from Indian and Chinese customers with the
products such as insurance (TAKAFUL) and home loans (Bank Negara Malaysia).
The Sharia finance which developed in deposit product is a modern principle to the
new customers. A strict lending principle promote by Sharia finance increase the
demand in ethical investing among the Non-Muslims customers (Abdul Aziz,
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
14
Rokiah & Ahmad Azrin, 2012). Most of the Islamic banking contain Islamic
teachings bring benefit to Non-Muslims customers. From the research by Mohamad
Anwar Thalib, Sharia principle raise the mutual understanding behaviour to respect
the different needs between the Muslims and Non-Muslims customers. The value-
added services will different according to different Non-Muslims customers after
apply the behaviour.
Sharia principle protects non-Muslim customers’ perceptions by fulfilled quality
Islamic banking services to overcome the poverty in country. Islamic bank convince
customer save money in the bank with the benefit low risk and high return from
bank. Non-Muslims shift to the Islamic bank as Islamic product is protect from the
loss in recession (Keria, Jamil & Firdaus, 2016). From the research of Mohd Shahril
Ahmad Razimi and Abd Rahim Romle (2017) mention that the Sharia is used to
enhance the risk management to raise the confident from the customers. Tan Sri
Dr.Zeti Akhtar Aziz come out with a statement where amount of 70 percent Non-
Muslims customers choose Islamic banking product. A professional and
experienced Sharia scholars are needed to interpret the sources of Sharia,
differentiate the assets which is halal or haram and examine the guidelines whether
it is suitable for all customers (Ulrich & Shebab, 2008). This is because the
professional of Islamic banks’ employees possess the Sharia knowledge can raise
the confidence among the customers (Tengku Wasimah, Rosemaliza & Abu Bakar,
2015).
New Sharia financial products is offer to meet Non-Muslims demand in Bangladesh
by Islamic bank due to the satisfied of customer (Parvez, 2014). It maintain the
reputation of in management can raise the religion belief between the customers
(Sudin, Norafifah & Sandra, 1994). The process to receive the permission before
invest the fund from depositors had improve the good image of the bank. The fund
will invest at the bank risk and the profit or loss will be shared with the bank
(Mamun, Kabir Hassan & Abu Umar).
However, the condition to attract Non-Muslims is the cheaper transaction cost and
services provide by Islamic bank. The opinion from Sutan Emir Hidayat & Nouf K
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
15
Al-Bawardi (2012) proved Islamic banking products is not popular due to the less
amount of customers who maintain the relationship with Islamic banking. Non-
Muslims customers prefer the bank which offer high interest rate on the deposit
(Aziza & Awais, 2016). Muslims customers prefer the bank which comply with
Sharia laws which the fund will return to society for the growth of country economic
(Aziza & Awais, 2016).
Although Malaysia is a multi-religious society, but most of the customers believe
that the Sharia compliance was only benefit to Muslim customers. This statement
was rejected by Farah Amalina Md Nawi, Ahmad Shukri Yazid and Mustafa Omar
Mohammed (2013) after conducted a research which determine the acceptance
between Muslim and Non-Muslims customers related to Islamic Home Financing
(BBA). The result from the research showed that Non-Muslim satisfied BBA can
be fulfilled the desirable needs but discover a high level of dissatisfaction from
Muslims.
In conclusion, many researchers show that major results of the research agree there
is positive relationship between the Non-Muslims customers with the variable of
Sharia compliance.
2.1.2.2 Knowledge of Non-Muslims customers
The amount of Non- Muslims are keep interesting and populating trade with Islamic
banking products and services because of its product can cover wider scope and
ability to cross the worldwide economic recession. However, to what extent this
statement is true in Malaysian context. Subsequently, this research aims to examine
non-Muslim customers’ perception against of Islamic banking products and
services in Malaysia.
Nowadays, customers with higher educational level have more knowledge about
the area that they are interested in, for instance, as financial world (Zainol, Shaari,
& Muhamad Ali, 2008). In addition, the researchers also find that employees who
are working on the frontline are actually play important roles in representing the
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
16
association to the outside world. However, another study by Ahmad and Haron
(2002) on perceptions of Malaysian corporate customers of Islamic banking
products and services indicated that Islamic banks were not the main choice because
of the lack of knowledge. This review demonstrates that Islamic banks have not
sufficiently directed projects to instruct individuals or elevate their items to people
in general.
This view is upheld by Baba and Amin (2009) showed that the understanding of
principles or ideas of Islamic products among bankers are at the minimum level.
Therefore, it is important that the Islamic banking players have a deep
understanding of Islamic banking industry so that it will have a competitive
advantage over the conventional system. In such manner, the experts are proposed
to give more framework and arrangements to furnish Islamic saving money
representatives with adequate information to empower them to play out their
obligations as per the Sharia standards. Bley and Kuehn (2004) reviewed business
students in the United Arab Emirates (Sharjah) on their knowledge of financial
aspects of Islamic and conventional banks. The major finding was that Muslim
students preferred Islamic banking services because of religious motivations. An
auxiliary discovering, non-Arabic Muslims understudies had a more elevated
amount of learning of ordinary managing an account. Hamid and Nordin(2001)
surveyed Malaysian commercial bank customers, finding a high awareness of
Islamic banking but poor self-reported knowledge of specific Islamic
products, including poor comprehension of the contrast amongst Islamic and
traditional keeping money
Based on Haque, Jamil and Ahmad Zaki (2009) conclude that the demographic
factors such as religion and knowledge are playing an important role to select a
bank. Scientist also found that clients don't have such a great amount of information
about the Islamic keeping money items. Example: Muderaba, Mushaaraka,
Murabaha and so forth. However they purchase these items for the reason of religion.
In the research found that consumer understanding of the workings of Islamic
banking was not strong (Khan et al., 2008; Okumus, 2005; Khattak and Rehman,
2003). Most respondents knew that premium was not paid and knew about a portion
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
17
of the regular terms related with Islamic keeping money (e.g.Ijarah, and Morabha),
in any case, more point by point information was inadequate. According to Dusuki
et al. (2006) customers highly knowledgeable and competent personnel coupled and
courteous values to be the most important criteria in patronizing Islamic banks.
Marimuthu, Jing, Gie, Mun, Ping (2010) additionally found that banks ought to
observe individuals' inadequate information in Islamic saving money framework
into thought particularly while advancing Islamic budgetary administrations. Hence,
banks should improve their marketing activities accordingly. In a survey conducted
in the UK, Omer (1992) reported that the higher the rule commitment and the lower
the level of general education, the stronger the preference on Islamic over
conventional finance. However, Haron,Ahmad and Planisek (1994) mention that
the selection criteria of Muslim bank customers in Malaysia was largely based on
non-religious aspects. They noticed that in spite of the fact that there was an
abnormal state of consciousness of Islamic items, there was a poor comprehension
of the contrasts amongst Islamic and traditional saving money. The little
information about Islamic banking products is the result of poor understanding of
Islamic banking concept and creates a strong impact on customer’s perception. The
better education is necessary for the awareness of Islamic banking products
(Doraisamy, 2011).
Finding is the level of perception is less in competitive area (Leo, 2009). This
research objective is to define the knowledge of customer perception of customer
with respect to Islamic banking product and the way of increase the knowledge and
the observation of customer about the product of Islamic bank. The populace size
of this review is 280 individuals. ANOVA and relationship examination are utilized
to break down the information. The finding of this review demonstrate that over
half individuals from respondent know an about IB yet less information about item
and administration of IB in addition this review assist to draw in more client (Keong,
2012). In an urban city of Malaysia, Kuala Lumpur, a study by Abdullah et al. (2012)
conclude that non-Muslims at young age and with higher academic qualification
possessed better knowledge and understanding of Islamic banking concepts.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
18
2.1.2.3 Trust and confidence
Among the Islamic banking circumstance, trust and confidence are important in
consumer preferences. Former researchers indicated that is not only confidence with
bank, but also confidences in that bank who promise with accrete to Sharia principle
(Hoq, M., Sulatana, N., and Amin, M., 2010; Amin, M. and Isa, Z., 2008). Which
means that is more important that if products are secured, and that will build the
confidence to customers to lead them to choose that products. According to Ashraf,
S., Robson, J. & Sekhon, Y, (2015), trust exactly defined as performance of
commitment and expectation of customers that their long term benefits will be
protected by the bank. Long term will face more uncertainty than short term, if a
bank has greater reputation than others banks, will give more confidence to
customers to choose to deal with them. Good performance which mean can give
more benefits to customers and reduce risks which will faced by customers.
However, in the circumstance of Islamic Banking in Pakistan, the trust of customers
toward bank is also defined as a good perception which the expectation of the
product or service reached the customer’s expectation level (Rizwan, M., Yaseen,
G., Nawaz, A.,and Hussain, L., 2014). Customers prefer to get confidence and trust
for the bank which can increase and secured customers’ wealth.
According to Michell, P. , Reast, J. & Lynch, J., (1998) satisfaction of consumer
will affect trust and confidence of consumer to that bank. If consumer satisfied the
services of that bank provided will increase them more trust and confidence to
purchase products in that bank. Level of reputations of that bank also will affect
their image in consumer mind and tend to affect the trust and confidence of
consumer. Consumer must rely on trust when the products are difficult to assess and
in strange of range (Ennew, C, Kharouf, H, and Sekhon, H, 2011). Conclude from
Ennew, C, Kharouf, H, and Sekhon, H (2011), generate trust is a pre-requirement
for compliance and strengthen the development of allegiance, leading to repurchase
and cross buying, hence trust will affected the decision of consumers to trade with
a bank. Customers may repurchase those products or others products even they may
introduce their friends or family to purchase that products or trade with that bank
which they trusted.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
19
Larger part of researchers has argued build on trust is important key influence about
the relationship between bank and consumers because it can’t without trust and
confidence of consumer when bank created or managed. (Sekhon, H., Ennew,C., &
Devlin, J., 2014) If a bank won’t have any trust by customer, that bank will facing
a lot of troubles, like it might not continuous the business process. It was because
that must had a basic in trust between dealer and consumers, otherwise that was
easily faced a high default risk and lower down the success ratio of trade. Based on
Castaldo (2007), trust is based on accumulated knowledge about the other party,
and believed that that party will meet it promised. If that party done it’s promised
will build a higher reputation to let other people more trust it can meet all its
promised and more prefer to trade with it.
In banking process, it manufactured trusting relationship when consumer is lag
knowledge about the variety and intricacy of products and the processing of
products. For the example in Islamic banking products are unfamiliar for consumers
in Non- Muslim in Malaysia, thus the presence of trust is important if consumers
have confidence with that bank. (Roy, S. K., Devlin, J. F., & Sekhon, H., 2015).
This research provides even more vision into whether trust and confidence in an
Islamic bank will affects consumer preferences.
2.1.2.4 Flexibility of withdrawal
The flexibility of withdrawal of an Islamic bank can be clearly understood through
the liquidity management carried out by the bank. Mobin and Admad (2014) stated
that, bank liquidity is the main element for a bank to manage their assets. Only bank
with a sound liquidity management could reach the level of withdrawal demand by
its customers. While the flexibility of withdrawal of an Islamic bank could bring
effects on non-Muslim customers’ preference towards Islamic deposit products.
The failure of a bank to balance between the supply and demand of liquidity leads
to liquidity problems and this is the main reason for depositors to leave the bank
(Ismal, 2010). Each Islamic bank have their own flexibility of withdrawal scheme
based on the basis of preferences and convenience such as online service and
location of ATM (Aziza & Awais, 2016). However, Amin (2016) argued that the
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
20
acceptance of consumers towards Islamic deposit products are influenced by
religious beliefs, social pressure, cost benefit analysis by the bank and
advertisements but did not show that the flexibility of withdrawal scheme have a
relationship with the customer behaviour towards Islamic deposit products.
In addition, although the availability of credit will affect the flexibility of
withdrawal of the bank but Haron, Ahmad and Planisek (1994) found that non-
Muslim customers only rank it as the ninth important factors that will affect their
preference compared to other factors. This showed that non-Muslim customers
emphasize more on others factors such as the quality of services from bank
compared to the availability of credit of the bank. The availability of ATMs’ had a
positive significant relationship with customer preference to choose the bank
(Srouji, Halim, Lubis & Hamdallah, 2015). The easier the customer could access to
the ATM of the bank, the more willingness of customer will choose for its products.
According to Mokhlis, Mat and Salleh (2008), they found that the availability of
ATM ranked second in their research which supports the view that undergraduates
have positive significant relationship stated earlier.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
21
2.2 Review of Relevant Theoretical Methods
Figure 2.1: Research Model in Aziza & Awais’ Study
Source : Aziza, N., & Awais, F. (2016). Customer’s Patronage in Selection Criteria
of Islamic Banks in Pakistan. The International Journal of Business & Management.
According to Aziza and Awais (2016), the criteria for customers to choose Islamic
Bank will be Sharia compliance, awareness, cost and benefit analysis, friendliness
of bank personnel and quality and attractiveness of offerings. Many customers
prefer the services follow the rules and regulation which comply with Sharia
principle. Secondly, customers aware the qualities of the function is important than
traditional marketing activities. Most of the customers are profit oriented as they
want the high return with low risk. They will choose the products to invest which
give benefit more than the cost invests. Friendliness of bank personnel acts as an
important factor because it provide consultation and accurate information to
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
22
customers. Islamic bank need to provide quality products to help customers
differentiate from competitive bank.
2.3 Proposed Conceptual Framework
Figure 2.2: Conceptual Framework That Determine the Factors of Non-Muslims
Customers’ Preferences Toward Islamic Deposit Products.
Adapted from : Aziza, N., & Awais, F. (2016). Customer’s Patronage in Selection
Criteria of Islamic Banks in Pakistan. The International Journal of Business &
Management.
The conceptual framework above could explain the proposed model on how the
independent variables included are of Sharia compliance, knowledge of customer,
trust and confidence and flexibility of withdrawal influence the non-Muslim
customers’ preference.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
23
2.4 Hypotheses Development
2.4.1 Sharia Compliance
H0A : There is no significant relationship between the Sharia compliance and the
preferences of non-Muslim customers toward Islamic deposit products in Malaysia.
H1A : There is significant relationship between the Sharia compliance and the
preferences of non-Muslim customers toward Islamic deposit products in Malaysia.
Sharia is an Islamic principle required investor prohibit interest (Riba) to enhance
the economic growth. It was implied on the banking operations such as deposits
transactions, products and financing. Non-Muslims prefer the investment with less
risky due to the effect of global credit crisis. Hence, the information which follow
the Sharia compliance will help customers minimize losses in the recession (Aziza
& Awais. 2016). According to Abdul Aziz, Rokiah and Ahmad Azrin (2012), many
governance used Sharia principle to enhance the strength of the management to
maintain the relationship with Non-Muslims. The effect of the Sharia principle had
attract the Non-Muslims customers which give positive relationship with Islamic
products.
2.4.2 Knowledge of non-Muslim Customers
H0B : There is no significant relationship between the knowledge of non-Muslim
customers and the preferences of non-Muslim customers toward Islamic deposit
products in Malaysia.
H1B : There is significant relationship between the knowledge of non-Muslim
customers and the preferences of non-Muslim customers toward Islamic deposit
products in Malaysia.
This exploration was conducted to identify the product knowledge among Islamic
banks’ employees in the northern part of Malaysia. The findings yielded basic
standards and preparing had given a strong influence towards the knowledge.
However, religiosity and discernment which supposed to have effect on product
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
24
knowledge (Ahmad and Haron, 2002; Zainol et al., 2008; Aslam et al., 2011) are
failed to prove. The findings will have some impact on the theory and practical
aspects of Islamic banking sector.
According to Holliday (1996), the importance of understanding customers’
perception in bank selection has become a persevering examination motivation in
managing an account. In order to infiltrate and operate side by side with
conventional banks, Islamic banks must be able to know the people’s perceptions
that their system is much better than the conventional system. Consequently,
inferable from the much focused condition, Islamic banks need to focus client
recognitions in bank determination to help them advertise their items capable
(Haron, Ahmad & Planisek, 1994; Dusuki & Abdullah, 2006). According to Rustam,
Bibi, Zaman, Rustam and Zhid-ul-haq (2011) to conclude, a new conceptual model
for Islamic banks selection criteria should include understanding of Islamic banking
concept.
The review is to indicate that more focus and improvement of education and training
on advanced aspects of Islamic banking and finance are urgently required. This
finding is important for policy-makers such as national banks. As Malaysia plans to
wind up plainly the worldwide center point of the Islamic money related industry,
information of Islamic keeping money and fund among the bank chiefs is basic to
understanding that objective. In particular it is essential if the industry is to evolve
and prosper. Knowledge of the foundation of Islamic banking practices. In addition,
only if the bank managers are knowledgeable can they inform and educate their
customers, which in turn will attract new customers and enhance the market share
of Islamic banks. This is especially important in a dual financial system like
Malaysia where Islamic financing is practiced in parallel with conventional banking.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
25
2.4.3 Trust and Confidence
H0C : There is no significant relationship between the trust and confidence and the
preferences of non-Muslim customers toward Islamic deposit products in Malaysia.
H1C : There is significant relationship between the trust and confidence and the
preferences of non-Muslim customers toward Islamic deposit products in Malaysia.
In Islamic Banking, trust and confidence are applied with Sharia compliant.
Consumers will more believe based on the banks will meet its promise which is
called trust. Confidence which means customers will more prefer a bank which has
a stability capital, higher reputations, and higher return. For the example customer
more trust bank A than bank B, because that customer believes that bank A will
give that customer more benefits than bank B, and the bank A’s has more sufficient
capital which means more stable than bank B. According to Fungacova, Hasan &
Weill (2016), trust in the banks is a basic element in the economy. Because
consumers always think that must put money in trust rather than put trust in money,
trust can helps to stability the financing and inclusive financing and it thereupon
helps to promote economic growth. Banks need consumers’ trust and confidence
to attract consumers to deposit in banks or borrowing from banks, have a good
relationship with banks.
2.4.4 Flexibility of Withdrawal
H0D : There is no significant relationship between the flexibility of withdrawal and
the preferences of non-Muslim customers toward Islamic deposit products in
Malaysia.
H1D : There is significant relationship between the flexibility of withdrawal and the
preferences of non-Muslim customers toward Islamic deposit products in Malaysia.
The flexibility of withdrawal refers to how flexible can the customers withdraw or
transfer their deposit into cash or another time of investment. While the flexibility
of withdrawal might be different according to the bank’s basis of preferences and
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
26
convenience such as online services provided and location of ATM (Aziza & Awais,
2016). For example, the ATM of bank located inside a mall allowed their customer
to withdraw money after the bank working time and this may be the reason of
customer choose this bank instead of other banks.
2.4.5 Four independent variables
H0E : There is no significant relationship between independent variables (Sharia
compliance, knowledge of non-Muslim customers, trust and confidence, flexibility
of withdrawal) and the preferences of non-Muslim customers toward Islamic
deposit products in Malaysia.
H1E : There is significant relationship between the independent variables (Sharia
compliance, knowledge of non-Muslim customers, trust and confidence, flexibility
of withdrawal) and the preferences of non-Muslim customers toward Islamic
deposit products in Malaysia.
2.5 Conclusion
In this chapter, the relationship of Sharia compliance, knowledge of non-Muslim
customers, trust and confidence, flexibility of withdrawal and the preferences of
non-Muslim customers toward Islamic deposit products in Malaysia have been
demonstrated an supported by the findings, previous studies, theories and journals.
Besides, the five hypotheses made to test whether there have relationship between
selected independent variables and the dependent variable or no. However, the
methodology of research will be discussed in the following chapter.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
27
CHAPTER 3 : METHODOLOGY
3.0 Introduction
This chapter includes the data collection method, sampling design, research
instruments, constructs measurements, and data analysis. Primary data and
secondary data are the types of quantitative approach using in different research. In
this study, primary data are collected from 250 questionnaire papers; the
questionnaire is created to distribute to targeted respondents through hand-to-hand
method. In the end of this chapter, descriptive analysis, reliability test, and
inferential analysis will be designed and presented on how the research is going to
carry out.
3.1 Research Design
Research design includes methods and processes in development of this study, thus
it is serves as a structure for this research project. The questionnaire survey to
respondents will be used to collect the data. However, only data and information
that are relating to this study will be collected and analysed. In this research,
descriptive and quantitative methods will be used to examine the data collected.
3.1.1 Descriptive Research
Descriptive research is a design to relate the participants in the study to an accurate
direction. It included three methods to proceed the project such as observational,
case study and survey. Observational is a method that record the participants which
involve in the study research by using observation. Case study is a method that study
and understanding a group of individual to get information and data throughout the
process. Survey is a method that used to discuss certain specific topic through an
interview session (Kowalczyk, 2015).
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
28
3.1.2 Quantitative Research
Quantitative research generates a data from a larger sample population. This data
will be transformed into useful information to quantify the defined variables. All
facts and uncover pattern can be measured by quantitative research through various
types of methods. For example: papers survey, online survey, face to face interview
and so on (Susan & Wyse, 2011).
3.2 Data Collection Method
Data collection must carry out in every researches in order to make the study
complete as without data the research could not measure and examine the variable
hence the research could not be conducted. The data collected should be accurate
to ensure the precision of the result. In this research, primary data is being used.
3.2.1 Primary Data
Primary data are the first hand data which collected through surveys, interviews or
questionnaire papers. In this study, the data were collected by using questionnaire
papers. The hard copy of questionnaire papers will be distributed to respondents.
Furthermore, questionnaire papers being used in this research because it can be
reached out to a huge number of respondents in a shorter period of time compared
to interviews. This method of data collection involved lower cost and save time
compared to other data collection methods.
3.3 Sampling Design
In this study, a simple random technique is selected to conduct the study. Simple
random technique is a technique where the respondents are being selected randomly
from a large number of populations.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
29
3.3.1 Target Populations
In this study, male non-Muslim Malaysian as well as female non-Muslim Malaysian
is the targeted population. This population is being chosen in order to achieve the
objective of this study which is to study the factors that affect preferences of non-
Muslim customers toward Islamic deposit products in Malaysia.
3.3.2 Sampling Frame and Sampling Location
Based on Zikmund et al. (2009), sampling frame is defined as a sample can be
drawn from a list of elements or knows as working population. For this study,
sampling frame is all the customers in the cities in Malaysia and sampling locations
are Kuala Lumpur, Johor Bahru, Ipoh and Georgetown. The locations are chosen is
because these cities are urban area and show that the employees have a higher
median and mean salary in urban area compared to rural area (Salaries & wages
survey report, 2017).
Figure 3.1 : Median and Mean monthly salaries of employees by states, Malaysia
2015-2016
Source: Salaries & wages survey report, Malaysia, 2016. (2017, May 5).
Retrieved from
https://www.dosm.gov.my/v1/index.php?r=column/pdfPrev&id=U3JoKzFiekE5W
FFKK0VMRWQ0a2FDQT09
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
30
3.3.3 Sampling Elements
Sampling element is a case within a population. In this study, the targeted
respondents would be the non-Muslim resident in Malaysia in order to examine the
factors that affect the non-Muslim customers’ preference toward Islamic deposit
products in Malaysia. Base on this, the data and information will be collected from
different level of education, income and race of respondents so that the result will
be more accurate and trustable.
3.3.4 Sampling Techniques
Based on Saunders et al. (2009), sampling technique can be divided into two
categories, which are probability and non-probability. In this study, the probability
sampling technique will be used due to it is not easy to collect data and information
from the entire resident of Malaysia and also it can save cost and time.
3.3.5 Sampling Size
In this study, 250 set of questionnaire papers will be distributed through hand-to-
hand in order to collect the data and information from targeted respondents. In this
research, the online form not being used for the reason to avoid the problem of
respondents not clear about the survey questions and simply choose an answer that
will affect the outcome. While the hardcopy of questionnaire was being used is to
avoid the unbalance age range as during distribution the respondents can be filtered
out before providing information. The survey for this research was conducted from
May to June 2017.
3.4 Research Instrument
3.4.1 Questionnaire Design
The main purpose of distributing questionnaire papers is to collect the primary data
and information efficiently and allow the researchers to proceed with data tabulation
as well as research discussion. The design for questionnaire papers for this study
are closed-ended format questions that suggested answer are clearly listed in the
paper. The closed-ended format questions enable the researchers to limit the number
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
31
of possible response from respondents and which will lead them to quick decision
making process as well as ease the data coding time.
Basically, the questionnaire paper for this study is separated into two main
parts which is Appendix B and Appendix C. Appendix B include the cover page of
questionnaire papers and brief explanation of researchers’ objectives. While
Appendix C consist of three sections which are section A, B, and C. Section A
contain information of respondent’s demographic profile, Section B contain the
information of factors that influence respondent’s preference, while Section C
consist of questions about the awareness and preference of respondents on Islamic
deposit products.
3.4.2 Pilot Test
There are around 30 sets of questionnaire have been distributed to conduct pilot test
for purpose of checking the reliability, validity and accuracy of statement stated in
questionnaire paper.
3.4.2.1 Result of Pilot Test
Table 3.1 : Pilot test reliability test results : Dependent Variable
(Preferences of non-Muslim Customers toward Islamic Deposit Products)
Variables Cronbach’s Alpha Number of Items
Preferences of non-Muslim
Customer towards Islamic
deposit products
0.935 4
Table 3.2 : Pilot test reliability test results : Independent Variables
Variables Cronbach’s Alpha Number of Items
Sharia Compliance 0.8010 4
Knowledge of non-Muslim
Customers 0.8750 4
Trust and Confidence 0.7420 5
Flexibility of Withdrawal 0.9580 4
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
32
3.5 Construct Measurement
3.5.1 Section A of Questionnaire
Section A in the questionnaire consists of particular information such as age, race,
marital status, highest education level, employment status and monthly income of
the respondents. This section was conducted by using nominal scale as it is the
easiest measurement level among others. Nominal scale gives the meaning as
distinct classification which directly classified the data into respective categories.
There is no intrinsic ordering in between the categories for nominal scale based
questions, therefore, it do not represent any value or relationships with other
variables. In addition, ordinal scale was also included in this section. The main
difference between ordinal scale and nominal scale is the intrinsic ordering for the
choices of categories. In short, both nominal and ordinal scale able the researcher
to collect data in an efficient way and also carry out the data analysis efficiently but
nominal scale is more suitable in this research.
3.5.2 Section B of Questionnaire
Section B contained statements relating to selected independent variables which are
factors that affect preferences of non-Muslim customers toward Islamic deposit
products in Malaysia. The selected independent variables included Sharia
compliance, knowledge of non-Muslim customers, trust and confidence, and
flexibility of withdrawal. Interval scale is the appropriate scale to adopt in this
section. It is a numeric scales which used to examine the sequences and dissimilarity
between the values and it were carried out in the figure of five points such as Likert
scale. This scales included five different options: 1 represent “Strongly Disagree”,
2 represent “Disagree”, 3 represent “Neutral”, 4 represent “Agree”, and 5 represent
“Strongly Agree”. Therefore, the respondents could determine their level of
agreement toward the statement stated in the questionnaire by using this scale.
3.5.3 Section C of Questionnaire
Section C has the purpose to examine the preferences of non-Muslim customers
toward Islamic deposit products in Malaysia. Therefore, some questions that can
show the preferences of the respondents toward Islamic deposit products were
stated in this section.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
33
Table 3.3 : Questionnaire Section B
Independent
Variable Item Measure Sources and Years
A. Sharia
Compliance
Q1. I prefer Sharia
deposit products more
than Non- Sharia
deposit products from
the bank.
Q2. I can obtain
profit sharing after I
deposit my saving in
the Islamic bank.
Q3. Islamic product
is avoid from the
activities such as
alcohol, gambling,
pornography, tobacco
and pork processing.
Q4. When facing any
risk of economic, the
Islamic products
provide by Islamic
bank will be
minimized by the risk
sharing with the bank.
Maswadeh, S, N. (2014).
A Compliance of Islamic
Banks with the Principle
of Islamic Finance
(Shariah): An empirical
survey of the Jordanian
Business Firms.
International Journal of
Accounting and
Financial Reporting. Vol
4. No 1.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
34
B. Knowledge of
Customer
Q1. I can easily
obtain useful
information about
Islamic deposit
products from the
bank.
Q2. Conventional
bank and Islamic
bank provides the
same information for
customers.
Q3. I believe bank’s
staffs have enough
knowledge to answer
questions regarding
Islamic deposit
products provided by
the bank.
Q4. The different age
of people could not
receive the
information
accurately.
- Ahmad, Norafifah, and
Haron, Sudin. (2002).
“Perceptions of Malaysian
Corporate Customers
Towards Islamic Banking
Products and Services”,
International Journal of
Islamic Financial
Services, 3 (4).
-Bley, J and Kuehn K
(2004). Conventional
versus Islamic finance:
student knowledge and
perception in the United
Arab Emirates.
International Journal of
Islamic Financial Services
5 (4).
- Baba, R., & Amin, H.
(2009). Offshore Bankers'
Perception on Islamic
Banking Niche for
Labuan: An Analysis.
International Journal of
Commerce and
Management Vol.19 No.4,
293-308.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
35
C. Trust and
Confidence
Q1. I trust Islamic
banking because it
strictly upholds the
confidentiality of
consumers’ privacy.
Q2. I believe Islamic
banks provide the
sameness of true and
exact information of
the products and
services to all
consumers.
Q3. I trust the
Islamic banks’
account and
operational
transparency system.
Q4. I am confident
with the Islamic bank
because it accreted
with Sharia principle.
Q5. If the bank has
higher image and
reputation will make
me more trust and
confidence to
deposits.
Liang, F. C. et al., (2013)
Acceptance Level
Towards Islamic
Banking Among
Individual Consumers in
Malaysia. (Unpublished
University Thesis).
Universiti Tunku Abdul
Rahman, Malaysia
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
36
D. Flexibility of
Withdrawal
Q1. I prefer to
deposit in the Islamic
bank which have
higher availability of
credit.
Q2. I will choose the
Islamic bank which
provides ATM at
convenient location.
(Eg: Mall, University,
Hospital)
Q3. I prefer to
deposit in the Islamic
bank with online
services provided.
Q4. I prefer to
deposit in the Islamic
bank which can fulfil
my personal needs.
(Eg: Emergency
withdrawal)
Srouji, Halim, Lubis and
Hamdallah (2015).
Determinants of Bank
Selection Criteria’s in
Relation to Jordanian
Islamic and Conventional
Banks : International
Journal of Economics,
Commerce and
Management, Vol III, Issue
10, 294 – 306.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
37
Table 3.4 : Questionnaire Section C
Dependent
Variable Item Measure Sources and Years
Preferences of
non-Muslim
Customers
Q1. Purchasing Islamic
deposit products is a “must”
to prevent financial
difficulties.
Q2. The concepts of interest
free and profit and loss
sharing make me prefer to
Islamic deposit products
rather than conventional
deposit products.
Q3. I prefer Islamic deposit
products compared to
conventional deposit products
because of the structure and
processing transparency.
Q4. Engaging in Islamic
deposit products would be my
consideration for the time to
come.
Liang, F. C. et al., (2013)
Acceptance Level Towards
Islamic Banking Among
Individual Consumers in
Malaysia. (Unpublished
University Thesis). Universiti
Tunku Abdul Rahman,
Malaysia
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
38
3.6 Data Processing
The data is process through the processing stage which is data processing and
converts the information from questionnaire paper into useful output. A total of 6
steps will be carried out during data processing, first step is data checking followed
by data editing, data coding, data transcribing, data cleaning, and lastly data analysis
strategy selection. However, the purpose of this stage is to generate a series of data
which is free from error and fault.
The first step of data checking after the questionnaire was created completely and
it is found out to be free of errors. In this step, any problem that existed will be
amended and the correction of the questionnaire can be made immediately.
Therefore, the questionnaire is free of errors before distributing to targeted
respondents. After data checking, the step of data editing will be carried on. This
step carries out for the purpose to overview the questionnaire in order to increase
the accuracy precision. Questions that consist of uniformity answer and questions
that are unanswered will exist in the questionnaire, therefore, this step is important
to identify the consistency of the questionnaire.
Data coding is the third step to transform the data and information collected into
another format which is the computer could encoded. In the questionnaire, there are
few dissimilar types of code being allocate to represent the different types of
questions. However, the next step is data transcribing. During step of data
transcribing, the data will be transformed into computers by typing and key in the
collected data and information.
Moreover, the next step will be data cleaning process. In this step, SPSS software
version 23 will be used to make consistency checking so that the inconsistency data
can be avoided. The step of data cleaning is quite similar with the step of data
editing but data cleaning process is more detail as in it used to identify the data
which is out of range, inconsistent with the title or it consist of extreme values.
Lastly, the final step is data analysis strategy selection. The data analysis strategy
will be selected based on the problem definition, developing of hypothesis, and
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
39
research constructed. However, the characteristics of the data and information
produced are also under the consideration when selecting the strategy of data
analysis.
3.7 Data Analysis
Statistical Package for Social Science (SPSS) Version 23 has been used to analyse
and interpreted the collected data and information. This software will help us in
managing the data in any size and calculated it in statistical form.
3.7.1 Descriptive Analysis
For this part descriptive analysis is a mainly for describe the collected information
from questionnaires quantitatively. Statistic profile of respondents and central
tendencies measurement of conduct will be separated respectively in descriptive
analysis. Besides that, there are few common ways to use in conclude data including
by calculating the averages, frequency distributions and also the percentage. In this
study, the statistics will be presented through frequencies and percentages of mean
value of summaries the group data using a combination of tabulated description (i.e.
tables) and graphical description (i.e. graphs and charts).
3.7.2 Scale Measurement
3.7.2.1 Reliability test
According to Golafshani (2003), reliability is one of the most important elements
of test quality which is based on results that are consists over time and also an
accurate representation of total population under the research study. If the result can
be remake under a similar methodology, then the examination instrument is viewed
as solid. In other words, reliability refers to whether the variability in the observed
scores actually represents variability in the underlying true score (DeCoster, 2004).
SPSS Version 23 provides a measurement of internal-consistency reliability
whereby it is calculated by averaging of coefficients that result from all possible
combination of split halves which is called Cronbach’s Alpha. The higher the
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
40
correlation among the variables are more the better. According to Zikmund and
Babin (2010), coefficient values vary from 0 mean no consistency reliability
between items to 1 means complete consistency reliability.
According to George and Mallery (2003) provide following rules: 1 to 0.9 is
excellent, 0.8 to less than 0.9 is good, 0 .7 to less than 0.8 is acceptable, 0.6 to 0.7
is questionable, 0.5 to less than 0.6 is poor, and less than 0.5 is unacceptable.
Table 3.5 : Cronbach’s Alpha Coefficient Value
Alpha Coefficient Range Strength of Association
Less than 0.50 Unacceptable
0.5 to less than 0.60 Poor
0.60 to less than 0.70 Questionable
0.70 to less than 0.80 Acceptable
0.80 to less than 0.90 Good
0.90 and above Excellent
Source: by George, D., &Mallery, P. (2003). SPSS for Windows step by step: A
simple guide and reference. 11.0 update (4th ed.). Boston: Allyn& Bacon.
3.7.3 Inferential Analysis
3.7.3.1 Pearson Correlation Coefficient Analysis
Pearson correlation coefficient alludes to the measure on showing the relationship
of variables and the strength of the association between two variables. The scatter
plot will be used to gauge the relationship between the variables. The correlation
coefficient value is from -1 to +1. When the value with -1 indicates that the variable
has a perfect negative linear relationship with a negative slope. The value with zero
indicates that the variable has no linear relationship. The value with +1 indicates
the variable has a perfect positive linear relationship with a positive slop. If the
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
41
Pearson correlation is less than 0.5 which mean there is a weak correlation while
the coefficient value is more than 0.8 indicate that there is a strong relationship.
In this research, the Pearson correlation analysis used to evaluate the correlation
between the selected independent variables which are Shari compliance, knowledge
of non-Muslim customers, trust and confidence, and flexibility with the dependent
variable, preferences of non-Muslim customers toward Islamic deposit products.
Table 3.6 : Interpreting the Size of a Correlation Coefficient
Size of Correlation Interpretation
0.90 to 1.00 (-0.90 to -1.00) Very high positive (negative)
correlation
0.70 to 0.90 (-0.70 to -0.90) High positive (negative) correlation
0.50 to 0.70 (-0.50 to -0.70) Moderate positive (negative)
correlation
0.30 to 0.50 (-0.30 to 0.50) Low positive (negative) correlation
0.00 to 0.30 (0.00 to -0.30) Very low positive (negative)
correlation
3.7.3.2 Multiple Linear Regression Analysis
Multiple linear regressions are the most general form of linear regression analysis.
This analysis used to examine the relationship between one dependent variable and
two or more independent variables. It is a factual procedure with the function of
evaluating the association among selected independent variables and dependent
variable by computing coefficients in the straight line multiple regression equation
(Zikmund et al., 2010).
Therefore, multiple linear regressions analysis will subsitute the selected
independent variables which are Sharia compliance, knowledge of non-Muslim
customers, trust and confidence, and flexibility of withdrawal into the equation to
test the significant of affecting the preferences of non-Muslim customers toward
Islamic deposit products in Malaysia.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
42
Moreover, R-square is known as the coefficient of determinant for the multiple
regressions and used to examine of how close the data can be fitted into regression
line. R-squared also defined as the percentage of the variable variation which is
explained by a linear model. The higher the percentage, the more the model can
explain the response variable’s variability around the mean value.
The basis of Multiple Regression Equation:
Y = β1 + β1 X1 + β2 X2 + …… + βnXn
A multiple linear regression models will be formed. The equation of multiple
regressions that is involved in this study is as follow:
CP = β0 + β1SC + β2TC + β3KOC + β4FW
Where,
CP = Preferences of non-Muslim customers toward Islamic deposit
products
SC = Sharia Compliance
KOC = Knowledge of non-Muslim Customers
TC = Trust and Confidence
FW = Flexibility of Withdrawal
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
43
3.8 Conclusion
In conclusion, the research methodology is used to collect and investigate the data
which need to be processed in next chapter. The research methodology of this
chapter was discussed about design and instrument of research, method to collect
data, design of sampling, and construct measurement as well as data processing and
analysis. A total of 250 questionnaire surveys were collected from 250 respondents
that randomly chosen from general non-Muslims in Malaysia which come from
different races so as to carry out the research to investigate the factors that effect on
the preferences of non-Muslim customers toward Islamic deposit products in
Malaysia. To run, analyse and access the collected data, Statistical Analytical
Software (SAS) was conducted in this research to test and determine the multiple
linear regression analysis correlation among the variables. In chapter 4, the data and
result will be analysed further.
.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
44
CHAPTER 4 : DATA ANALYSIS
4.0 Introduction
In this chapter, the data collected from the survey will be analysed for interpretation
and research purposes. The data was collected from the distribution of questionnaire
and was collected from 250 Malaysians. Statistical Package for Social Science
(SPSS) Version 23 was used in this research to interpret and examine the collected
data to make sure the hypotheses are valid in this research. In addition, the data
running process and the obtained results which including Cronbach’s Coefficient
Alpha, Pearson Correlation test, Multiple Regression analysis and etc. will be
presented by using tables and charts which are easy for understanding.
Furthermore, there are four main sections in this chapter which are descriptive
analysis, scale measurement, inferential analysis, and a small conclusion. Firstly, in
the section of descriptive analysis will analyse the respondents’ demographic
profile and followed by the central tendencies measurement of construct. Second,
reliability analysis will be included in the part of scale measurement to identify the
reliability of the variables in this research. Moreover, the connection of independent
variable and dependent variables will be showed in the section of inferential
analysis. Lastly, the results obtained in this chapter will be summarized in the
conclusion’s section.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
45
4.1 Descriptive Analysis
4.1.1 Respondents’ Demographic Profile
The following tables and charts demonstrated demographic profile of survey
respondents including age, race, marital status, highest education level,
employment status, and monthly income.
4.1.1.1 Age
Table 4.1 : Respondent Demographic of Age
Age Frequency Percentage (%)
17 - 25 years
26 – 35 years
36 – 50 years
50 years and above
134
76
25
15
53.60
30.40
10.00
6.00
Total 250 100.00
Source : Developed for the research
Figure 4.1 : Respondent Demographic of Age
Source : Developed for the research
In the age of respondents, majority of the respondent are at the age of between 17
to 25 years which has 53.60% of respondents. The amounts of respondents are age
50 and above are lowest in the research which is 15 respondents (6%). The
53.60%30.40%
10.00%6.0…
Age
17 - 25 years
25 - 35 years
36 - 50 years
50 years and above
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
46
respondents are age 26 to 35 is the second highest percentages which is 76
respondents (30.4%), follow by the respondents are age 26years to 50 with 25
respondents (10%).
4.1.1.2 Race
Table 4.2: Respondent Demographic of Race
Source : Developed for the research
Figure 4.2 : Respondent Demographic of Race
Source : Developed for the research
In the race of respondents, the highest percentages of respondents are from Chinese
which is 211 respondents (84.4%). The amount of respondents other race are lowest
84.40%
12.80%
2.80%
Race
Chinese
Indian
Other
Race Frequency Percentage (%)
Chinese
Indian
Others
211
32
7
84.40
12.80
2.80
Total 250 100.00
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
47
in the research which is 7 respondents (2.8%). The second highest percentages of
respondents are from Indian which is 32 respondents (12.8%).
4.1.1.3 Marital Status
Table 4.3: Respondent Demographic for Marital Status
Source : Developed for the research
Figure 4.3 : Respondent Demographic of Marital Status
Source : Developed for the research
Figure 4.4 and table 4.4 illustrate the respondent’s marital statuses. Marital statuses
which have been included in this survey are single and married. The result above
shows that the highest percentage of respondents is 76% which is from Single and
76.00%
24.00%
Marital Status
Single
Married
Marital Status Frequency Percentage (%)
Single
Married
190
60
76.00
24.00
Total 250 100.00
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
48
there is more than half comprises 190 respondents. The result from marital Status
shows that respondents which are in married status only cover 60 respondents
(24%).
4.1.1.4 Highest Education Level
Table 4.4 : Respondent Demographic of Highest Education Level
Source : Developed for the research
Figure 4.4 : Respondent Demographic of Highest Education Level
Source : Developed for the research
7.20%
13.20%
12.40%
61.60%
1.60% 0.40% Highest Education Level
UPSR/PMR/SRP/SPM
STPM/A-Level/Foundation
Diploma/Advanced
DiplomaBachelor Degree
Master Degree
PHD
Highest Education Level Frequency Percentage (%)
UPSR/PMR/SRP/SPM
STPM/A-Level/Foundation
Diploma/Advanced Diploma
Bachelor Degree
Master Degree
PHD
Others
18
33
31
154
4
1
9
7.20
13.20
12.40
61.60
1.60
0.40
3.60
Total 250 100.00
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
49
Table 4.4 and Figure 4.4 demonstrated that the highest percentages of 61.60% or
154 respondents are from bachelor degree level. In contrast, there is only 1
respondent who are holding PHD certificate showed the lowest percentage of 0.40%
only. Besides, the amount of respondents from master degree in the research are 4
out of 250 respondents or 1.60% of respondents. Moreover, there are 33 respondents
or 13.20% of respondents are at the level of STPM/A-Level/Foundation which is
the second highest percentage and followed by Diploma/Advanced Diploma with
31 respondents (12.4%), UPSR/PMR/SRP/SPM with 18 respondents (7.2%) and
other education level with 9 respondents (3.6%).
4.1.1.5 Employment Status
Table 4.5: Respondent Demographic of Employment Status
Source : Developed for the research
Employment Status Frequency Percentage (%)
Students
Employed for wages
Self-employed
Homemaker
Retired
Unable to work
120
93
25
10
1
1
48.00
37.20
10.00
4.00
0.40
0.40
Total 250 100.00
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
50
Figure 4.5 : Respondent Demographic of Employment Status
Source : Developed for the research
In the employment status of respondents, the highest percentages of respondents are
from students which is 120 (0.48%). The amount of respondents from retired and
unable to work are lowest in the research which is 1 respondent (0.4%). The second
higher of respondents is employed for wages which is (0.372%), follow by self-
employed which is (0.1%) and homemaker which is (0.04%).
4.1.1.6 Monthly Income
Table 4.6: Respondent Demographic of Monthly Income
Source : Developed for the research
48.00%
37.20%
10.00%4.00%
0.40%0.40%
Employment Status
Studemts
Employed for wages
Self-employed
Homemaker
Retired
Unable to work
Monthly Income Frequency Percentage
(%)
Less than RM2500
RM2500 – RM 3500
RM3500 – RM 4500
More than RM4500
204
28
15
3
81.60
11.20
6.00
1.20
Total 250 100.00
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
51
Figure 4.6 Respondent Demographic of Monthly Income
Source : Developed for the research
Table 4.6 and Figure 4.6 demonstrated the frequency of monthly income of the
respondents. In fact, most of the respondents are having an income below RM2500
per month which are 204 persons or 81.60% among 250 respondents. In contrast,
there are only 3 persons or 1.20% of the respondents are having an income more
than RM4500 per month. Furthermore, there are 28 persons or 11.20% of the
respondents are in the income range of RM2500 to RM3500 per month. Lastly, for
the monthly income range of RM3500 to RM4500, there are 15 out of 250 or 6.00%
of the respondents fall in this range.
81.60%
11.20%
6%1.20%
Monthly Income
Less than RM2500
RM2500 - RM3500
RM3500 - RM4500
More than RM4500
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
52
4.1.2 Central Tendencies Measurement of Construct
In this part of Chapter 4, the mean scores of the four independent variables will be
calculated. In the central tendencies measurement, the mean values of 21 items will
be calculated and stated by using SPSS version 23. Furthermore, the construct was
taped on a 5-points Likert Scale with 1 represents “Strongly Disagree” (SD), 2
represents “Disagree” (D), 3 represents “Neutral” (N), 4 represents “Agree” (A),
and 5 represents “Strongly Agree” (SA).
The central tendencies measurement of construct for the selected independent
variables which are Sharia compliance, knowledge of non-Muslim customers, trust
and confidence, and flexibility of withdrawal will be evaluated with table
respectively from Table 4.7 to Table 4.10. While the central of tendencies
measurement of construct for the dependent variable will be evaluated with Table
4.11.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
53
4.1.2.1 Sharia Compliance (SC)
Table 4.7 Central Tendencies Measurement of Construct : Sharia
Compliance
Source : Developed for the research
Statement SD
(%)
D
(%)
N
(%)
A
(%)
SA
(%)
Mean Rank
SC1 I prefer Sharia deposit
products more than Non-
Sharia deposit products
from the bank.
5.60 14.80 25.20 43.20 11.20 3.3960 4
SC2 I can obtain profit
sharing after I deposit my
saving in the Islamic
bank.
4.40 5.60 22.00 43.60 24.40 3.7800 1
SC3 Islamic product is avoid
from the activities such as
alcohol, gambling,
pornography, tobacco and
pork processing.
2.00 9.20 24.40 39.60 24.80 3.7600 2
SC4 When facing any risk of
economic, the Islamic
products provide by
Islamic bank will be
minimized by the risk
sharing with the bank.
6.40 10.40 30.40 41.60 11.20 3.4080 3
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
54
As Table 4.7 showed, obtain interest after deposit saving in the Islamic bank is
ranked number one as the mean value is the highest among others which is 3.7800.
Islamic product is avoid from the activities such as alcohol, gambling, pornography,
tobacco and pork processing ranked number two at the mean 3.7600. When facing
any risk of economic, the Islamic products provide by Islamic bank will be
minimized by the risk sharing with the bank ranked number three with mean 3.4080
and prefer Sharia deposit products more than Non-Sharia deposit products from the
bank will be the last ranked number four at mean 3.3960.
In the first statement “I prefer Sharia deposit products more than Non-Sharia deposit
products from the bank”, most of the respondents vote for “agree” which is 43.20%.
There is 11.20% of respondents vote for “strongly agree”, followed by 25.20% for
“neutral”, 14.80% for “disagree” and only 5.60% for “strongly disagree”.
From the statement “I can obtain profit sharing after I deposit my saving in the
Islamic bank”, 43.60% of respondents vote for “agree”. 24.40% of respondents vote
for “strongly agree”, followed by 22% for “neutral”, 5.60% for “disagree” and only
4.40% for “strongly disagree”.
From the next statement “Islamic product is avoid from the activities such as alcohol,
gambling, pornography, tobacco and pork processing”, 39.60% of respondents vote
for “agree”. 24.80% of respondents vote for “strongly agree”, followed by 24.40%
for “neutral”, 9.20% for “disagree” and only 2% for “strongly disagree”.
In the last statement “When facing any risk of economic, the Islamic products
provide by Islamic bank will be minimized by the risk sharing with the bank”, 41.60%
of respondents vote for “agree”. 11.20% of respondents vote for “strongly agree”,
followed by 30.40% for “neutral”, 10.40% for “disagree” and only 6.40% for
“strongly disagree”.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
55
4.1.2.2 Knowledge of non-Muslim Customers
Table 4.8 : Central Tendencies Measurement of Construct : Knowledge of non-
Muslim Customers
Source : Developed for the research
Statement SD
(%)
D
(%)
N
(%)
A
(%)
SA
(%)
Mean Rank
KOC1 I can easily obtain
useful information
about Islamic deposit
products from the
bank.
2.40 18.80 14.80 50.00 14.00 3.5440 3
KOC2 Conventional bank
and Islamic bank
provides the same
information for
customers.
3.60 11.20 17.20 47.20 20.80 3.7040 1
KOC3 I believe bank’s staffs
have enough
knowledge to answer
questions regarding
Islamic deposit
products provided by
the bank.
3.60 10.40 25.60 43.60 16.80 3.5960 2
KOC4 The different age of
people could not
receive the
information accurately
2.80 10.40 40.40 38.40 8.00 3.3840 4
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
56
Table 4.8 show the measurement of trust and confidence may affect Non-Muslim
customers' preference against Islamic deposit products in Malaysia. KOC 2
(Conventional bank and Islamic bank provides the same information for customers)
is agreed by most of the respondents with the mean value of 3.7040. Second and
third highest are KOC 3 (I believe bank’s staffs have enough knowledge to answer
questions regarding Islamic deposit products provided by the bank.) and KOC1 (I
can easily obtain useful information about Islamic deposit products from the bank.)
where the mean values are 3.5960 and 3.5440 respectively. In addition, KOC 4 (The
different age of people could not receive the information accurately.) is the fourth
with mean values of 3.3840.
In the first statement “I can easily obtain useful information about Islamic deposit
products from the bank”, most of the respondents vote for “agrees” which is
50.00%. There is 18.80% of respondents vote for disagree”, followed by 14.80%
for “neutral”, 14.00% for “strong agree” and only 2.40% for “strongly disagree”.
From the second statement “Conventional bank and Islamic bank are provide the
same information toward the custom”, 47.20% of respondents vote for “agree”,
followed by 20.8% for strong agree”, 16% for “strongly agree” and there is 17.20%
for “neutral” and only 3.60% for “strongly disagree”.
From the third statement “I believe bank’s staffs have enough knowledge to answer
questions regarding Islamic deposit products provided by the bank.” 43.6% of
respondents vote for “agree”, followed by 25.60% for “neutral” and 16.80% for
“strongly agree”, and there is 10.40% for “disagree” and only 3.60% for “strongly
disagree”.
In the last statement “The different age of people could not receive the information
accurately”, 40.40% of respondents vote for “neutral”, followed by 38.40% for
“agree”, 10.40% of respondents vote for “disagree” and there is 8.00% for “strong
disagree” and only 2.80% for “strongly disagree”.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
57
4.1.2.3 Trust and Confidence
Table 4.9 : Central Tendencies Measurement of Construct : Trust and Confidence
Source : Developed for the research
Statement SD
(%)
D
(%)
N
(%)
A
(%)
SA
(%)
Mean Rank
TC1. I trust Islamic banking
because it strictly
upholds the
confidentiality of
consumers’ privacy.
2.40 11.60 17.60 52.80 15.60 3.6760 3
TC2. I believe Islamic
banks provide the
sameness of true and
exact information of
the products and
services to all
consumers.
2.80 10.40 20.00 50.80 16.00 3.6680 4
TC3. I trust the Islamic
banks’ account and
operational
transparency system.
2.40 11.60 16.80 56.00 13.20 3.6600 5
TC4. I am confident with
the Islamic bank
because it accreted
with Sharia principle.
6.40 10.40 10.80 50.00 22.40 3.7160 2
TC5. If the bank has higher
image and reputation
will make me more
trust and confidence
to deposits.
2.40 18.80 9.20 32.80 36,80 3.8280 1
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
58
Table 4.9 showed the measurement of trust and confidence may affect Non-Muslim
customers' preference against Islamic deposit products in Malaysia. TC5 (If the
bank has higher image and reputation will make me more trust and confidence to
deposits.) is agreed by most of the respondents with the mean value of 3.8280.
Second and third highest are TC4 (I am confident with the Islamic bank because it
accreted with Sharia principle.) and TC1 (I trust Islamic banking because it strictly
upholds the confidentiality of consumers’ privacy.) where the mean values are
3.7160 and 3.6760 respectively. In addition, TC2 (I believe Islamic banks provide
the sameness of true and exact information of the products and services to all
consumers.) is the fourth and the last one TC3 (I trust the Islamic banks’ account
and operational transparency system.) is the fifth with mean values of 3.6680 and
3.6600.
In the first statement “I trust Islamic banking because it strictly upholds the
confidentiality of consumers’ privacy”, most of the respondents vote for “agree”
which is 52.80%. There is 17.60% of respondents vote for “neutral”, followed by
15.60% for “strongly agree”, 11.60% for “disagree” and only 2.40% for “strongly
disagree”.
From the second statement “I believe Islamic banks provide the sameness of true
and exact information of the products and services to all consumers”, 50.80% of
respondents vote for “agree”, followed by 20% for “neutral”, 16% for “strongly
agree” and there is 10.40% for “disagree” and only 2.80% for “strongly disagree”.
From the third statement “I trust the Islamic banks’ account and operational
transparency system”, 56% of respondents vote for “agree”, followed by 16.80%
for “neutral” and 13.20% for “strongly agree”, and there is 11.60% for “disagree”
and only 2.40% for “strongly disagree”.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
59
From the next statement “I am confident with the Islamic bank because it accreted
with Sharia principle”, 50% of respondents vote for “agree”, followed by 22.40%
for “strongly agree” and 10.80% for “neutral”, and there is 10.40% for “disagree”
and only 6.40% for “strongly disagree”.
In the last statement “If the bank has higher image and reputation will make me
more trust and confidence to deposits”, 36.80% of respondents vote for “strongly
agree”. followed by 32.80% for “agree”, 18.80% of respondents vote for “disagree”
and there is 9.20% for “neutral” and only 2.40% for “strongly disagree”
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
60
4.1.2.4 Flexibility of Withdrawal
Table 4.10 : Central Tendencies Measurement of Construct : Flexibility of
Withdrawal
Statement SD
(%)
D
(%)
N
(%)
A
(%)
SA
(%)
Mean Rank
FW1. I prefer to deposit in
the Islamic bank
which have higher
availability of credit.
3.60 11.20 17.20 54.00 14.00 3.6360 2
FW2. I will choose the
Islamic bank which
provides ATM at
convenient location.
(Eg: Mall, University,
Hospital)
3.60 10.40 18.00 55.60 12.40 3.6280 3
FW3. I prefer to deposit in
the Islamic bank with
online services
provided.
2.40 11.60 24.00 54.80 7.20 3.5280 4
FW4. I prefer to deposit in
the Islamic bank with
online services
provided.
6.40 10.40 14.00 50.00 19.20 3.6520 1
Source : Developed for the research
Table 4.10 demonstrated the measurement of central tendencies of construct in
Flexibility of Withdrawal. In this case, the highest ranking of overall statement is
FW4 which represent “I prefer to deposit in the Islamic bank with online services
provided.” with 3.6520 of mean value. FW1 which represents “I prefer to deposit
in the Islamic bank which have higher availability of credit.” and FW2 which
represents “I will choose the Islamic bank which provides ATM at convenient
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
61
location. (Eg: Mall, University, Hospital)” ranked at the second and third highest
with mean value of 3.6360 and 3.6280 respectively. However, FW3 (I prefer to
deposit in the Islamic bank with online services provided.) ranked at the lowest with
mean value of 3.5280.
In the first statement “I prefer to deposit in the Islamic bank which have higher
availability of credit”, most of the respondents vote for “Agree” which is 54.00%.
There is 17.20% of respondents vote for “Neutral”, followed by 14.00% for
“Strongly Agree”, 11.20% for “Disagree” and only 3.60% for “Strongly Disagree”.
From the second statement “I will choose the Islamic bank which provides ATM at
convenient location. (Eg: Mall, University, Hospital)”, 55.60% of respondents vote
for “Agree”, followed by 18.00% for “Neutral”, 12.40% for “Strongly Disagree”
and there is 10.40% for “Disagree” and only 3.60% for “Strongly Disagree”.
From the third statement “I prefer to deposit in the Islamic bank with online services
provided”, 54.80% of respondents vote for “Agree”, followed by 24.00% for
“Neutral” and 11.60% for “Disagree”, and there is 7.20% for “Strongly Agree” and
only 2.40% for “Strongly Disagree”.
In the last statement “I prefer to deposit in the Islamic bank with online services
provided”, 50.00% of respondents vote for “Agree”, followed by 19.20% for
“Strongly Agree”, 14.00% of respondents vote for “Neutral” and there is 10.40%
for “Disagree” and only 6.40% for “Strongly Disagree”.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
62
4.1.2.5 Preferences of non-Muslim Customers (CP)
Table 4.11 : Central Tendencies Measurement of Construct :
Preferences of non-Muslim Customer
Statement SD
(%)
D
(%)
N
(%)
A
(%)
SA
(%)
Mean Rank
CP1 Purchasing Islamic
deposit products is a
“must” to prevent
financial difficulties.
10.00 9.20 13.20 38.00 29.60 3.6800 1
CP2 The concepts of interest
free and profit and loss
sharing make me prefer
to Islamic deposit
products rather than
conventional deposit
products.
5.60 14.40 26.00 43.20 10.80 3.3920 4
CP3 I prefer Islamic deposit
products compared to
conventional deposit
products because of the
structure and
processing
transparency.
10.00 9.20 19.60 45.20 16.00 3.4800 3
CP4 Engaging in Islamic
deposit products would
be my consideration for
the time to come.
5.60 14.80 17.20 46.80 15.60 3.5200 2
Source : Developed for the research
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
63
Tables 4.11 indicate the measurement of central tendencies of construct in
preferences of non-Muslim Customer. It shows the highest ranking of overall
statement is CP1 which represent “Purchasing Islamic deposit products is a “must”
to prevent financial difficulties.” with 3.68 of mean value. CP4 which represents
“Engaging in Islamic deposit products would be my consideration for the time to
come.” and CP3 which represents “I prefer Islamic deposit products compared to
conventional deposit products because of the structure and processing transparency.”
ranked at the second and third highest with mean value of 3.52 and 3.48 respectively.
However, CP2 (The concepts of interest free and profit and loss sharing make me
prefer to Islamic deposit products rather than conventional deposit products.)
ranked at the lowest with mean value of 3.3920.
In the first statement “Purchasing Islamic deposit products is a “must” to prevent
financial difficulties”, most of the respondents vote for “Agree” which is 38.00%,
followed by 29.60% for “Strongly Agree”, 13.20% for “Neutral” and only 10.00%
for “Strongly Disagree” and 9.20% of respondents vote for “Disagree”.
From the second statement “The concepts of interest free and profit and loss sharing
make me prefer to Islamic deposit products rather than conventional deposit
products)”, 43.20% of respondents vote for “Agree”, followed by 26.00% for
“Neutral”, 14.40% for “Disagree” and there is 10.80% for “Strongly agree” and
only 5.60% for “Strongly Disagree”.
From the third statement “I prefer Islamic deposit products compared to
conventional deposit products because of the structure and processing
transparency”, 45.20% of respondents vote for “Agree”, followed by 19.60% for
“Neutral” and 16.00% for “Strongly Agree”, and there is 10.00% for “Strongly
Disagree” and only 9.20% for “Disagree”.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
64
In the last statement “Engaging in Islamic deposit products would be my
consideration for the time to come”, 46.80% of respondents vote for “Strongly
Agree”, followed by 17.20% for “Neutral”, 15.60% of respondents vote for
“Strongly Agree” and there is 14.80% for “Disagree” and only 5.60% for “Strongly
Disagree”.
4.2 Scale Measurement
4.2.1 Internal Reliability Test
According to Drost, reliability is the limits of measurements which are repeatable
where the measurements are performed by different persons, on different situation,
and also under different conditions with any alternative instruments that measure
the same item. By the same token, to further understand the functions of a test, it is
important to concern about the reliability which used to measure some attribute or
behavior. In this research, SPSS Version 23 was used to compute the reliability test
in this chapter. The results will be used to identify the level of reliability of the
selected independent variables in this research.
In addition, the Cronbach’s Alpha rule has been used to estimate the extent of
precision in reliability analysis of this research. Each of the statements under every
variables are correlated with each other and the level of coefficient will be measure
in this chapter. Cronbach’s Alpha rule stated that scales with coefficient alpha
between 0.8 to 0.95 indicates a very strong reliability, 0.70 to 0.79 represent good,
0.60 to 0.69 represent fair, and poor reliability showed while the value is lower than
0.60. Meanwhile, the internal reliability of independent variables towards
preferences of non-Muslim Customer were identified by using the Cronbach’s
Alpha rule. A total of 21 statements were used in this research.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
65
Table 4.12 : Reliability Test of Dependent Variable (Preferences of non-
Muslim Customer towards Islamic deposit products)
Variables Cronbach’s Alpha Number of Items
Preferences of non-Muslim
Customer towards Islamic
deposit products
0.9570 4
Source : Developed for the research
According to Table 4.12, the Cronbach’s Alpha value of the dependent value fall in
the range of 0.91 to 1.00 which is 0.9570. The result demonstrated the 3 items
measuring the preferences of non-Muslim customer towards Islamic deposit
products have a very strong reliability. Hence, 95.70% of the questions are reliable
in the measurement of the dependent variable in this research.
Table 4.13 : Reliability Test of Independent Variables
Variables Cronbach’s Alpha Number of Items
Sharia Compliance 0.9460 4
Knowledge of non-Muslim
Customers 0.9410 4
Trust and Confidence 0.9570 5
Flexibility of Withdrawal 0.9480 4
Source : Developed for the research
According to Table 4.13, the Cronbach’s Alpa values of all the independent
variables were fall in the range of 0.80 to 0.95. Hence, all of the statements for
independent variables in this research have a strong reliability in measuring the
preferences of non-Muslim customers toward Islamic deposit products.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
66
First, the Cronbach’s Alpha value of Sharia compliance showed 0.9460 which
indicates a strong reliability. Thus, 94.60% of the statements are reliable in
measuring the Sharia compliance. Second, the coefficient of Cronbach’s Alpa of
knowledge of customer also showed a strong reliability at 0.9410. In fact, there is
94.10% of the statements which examine the knowledge of customer are reliable.
Third, the reliability test on trust and confidence has a strong reliability at 0.9570
which indicates that 95.70% of the questions are reliable. Lastly, the flexibility of
withdrawal has the strongest reliability which is 0.9480 among all independent
variables. Under this circumstance, 94.80% of the statements are reliable in
measuring the flexibility of withdrawal.
4.3 Inferential Analysis
Inferential analysis is a method for determining relationship between independent
variables and dependent variable. The effects of an independent variable on a
dependent variable can be evaluated by using the inferential statistics analysis. In
this research, the characteristics of both dependent variable and independent
variables were illustrated by using Pearson Correlation and Multiple Regression
analysis.
Table 4.14 : Rules of Thumb about Correlation Coefficient Size
Coefficient Range Strength of Association
± 0.91 - ± 1.00 Very Strong
± 0.71 - ± 0.90 Strong
± 0.41 - ± 0.70 Moderate
± 0.21 - ± 0.40 Small but definite relationship
± 0.00 - ± 0.20 Slight, almost negligible
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
67
4.3.1 Pearson Correlation Analysis
Table 4.15 : Pearson Correlation Analysis
Variable
Preferences
of non-
Muslim
Customers
Sharia
Compliance
Knowledge
of non-
Muslim
Customer
Trust and
Confidence
Flexibility
of
Withdrawal
Preferences of
non-Muslim
Customers
1 0.865 0.776 0.838 0.811
Sig. 0.000 0.000 0.000 0.000
Sharia
Compliance 0.865 1 0.821 0.859 0.810
Sig. 0.000 0.000 0.000 0.000
Knowledge of
non-Muslim
Customer
0.776 0.821 1 0.817 0.791
Sig. 0.000 0.000 0.000 0.000
Trust and
Confidence 0.838 0.859 0.817 1 0.855
Sig. 0.000 0.000 0.000 0.000
Flexibility of
Withdrawal 0.811 0.810 0.791 0.855 1
Sig. 0.000 0.000 0.000 0.000
**Correlation is significant at the 0.01 level (2-tailed)
Source : Developed for the research
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
68
4.3.1.1 Correlation between Sharia Compliance and Preferences of non-
Muslim Customers toward Islamic Deposit Products
Hypothesis A : Relationship between Sharia Compliance and Preferences of
non-Muslim Customers toward Islamic Deposit Products
H0 A : There is no significant relationship between the Sharia compliance and
preferences of non-Muslim customers toward Islamic deposit products in Malaysia.
H1 A : There is significant relationship between the Sharia compliance and
preferences of non-Muslim customers toward Islamic deposit products in Malaysia.
Table 4.16 : Correlation between Sharia compliance and preferences of
non-Muslim Customers toward Islamic deposit products
Source : Developed for the research
Table 4.16 demonstrated the correlation coefficient between Sharia compliance
with and preferences of non-Muslim customers toward Islamic deposit products is
0.865. As result showed, there is positive relationship between Sharia compliance
with and preferences of non-Muslim customers toward Islamic deposit products due
to the p-value of <0.0001 which is lower than the significance value of 0.01.
Sharia
Compliance
Preferences of non-
Muslim customers
Sharia Compliance
Pearson Correlation 1 0.865
P-value 0.000
N 250 250
Preferences of non-
Muslim customers
Pearson Correlation 0.865 1
P-value 0.000
N 250 250
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
69
The correlation coefficient has value of 0.865 is categorized under strong
relationship at range from +0.71 to +0.90. Hence, the relationship of Sharia
compliance in Islamic banking and preferences of non-Muslim Customers toward
Islamic deposit products is positive. The result shows H0 A will rejected and there is
significant relationship between Sharia compliance and preferences of non-Muslim
customers toward Islamic deposit products in Malaysia.
4.3.1.2 Correlation between Knowledge of non-Muslim Customers and
Preferences of non-Muslim Customers toward Islamic Deposit Products
Hypothesis B : Relationship between Knowledge of non-Muslim Customers
and Preferences of non-Muslim Customers toward Islamic Deposit Products
H0 B : There is no significant relationship between the knowledge of non-Muslim
customers and preferences of non-Muslim customers toward Islamic deposit
products in Malaysia.
H1 B : There is significant relationship between the knowledge of non-Muslim
customers and preferences of non-Muslim customers toward Islamic deposit
products in Malaysia.
4.17 Correlation between knowledge of non-Muslims customer and
preferences of non-Muslim Customers toward Islamic deposit products
Knowledge of non-
Muslim Customers
Preferences of non-
Muslim Customers
Knowledge of
non-Muslim
Customers
Pearson Correlation 1 0.776
P-value 0.000
N 250 250
Preferences of
non-Muslim
Customers
Pearson Correlation 0.776 1
P-value 0.000
N 250 250
Source : Developed for the research
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
70
Table 4.17 showed that the correlation coefficient among Knowledge of non-
Muslim Customers and preferences of non-Muslim customers toward Islamic
Deposit Products is 0.776. In other word, these variables are having a strong
positive relationship. Furthermore, the p-value of <0.0001 is lower than the
significance value of 0.01. Hence, H0D is rejected. In short, there is a significant
positive relationship among Knowledge of non-Muslim Customers and preferences
of non-Muslim customers toward Islamic Deposit Products. This means when the
Knowledge of non-Muslim Customers increase, the preferences of non-Muslim
customers toward Islamic Deposit Products will actually increase.
4.3.1.3 Correlation between Trust and Confidence and Preferences of non-
Muslim Customers toward Islamic Deposit Products
Hypothesis C : Relationship between Trust and Confidence and Preferences of
non-Muslim Customers toward Islamic Deposit Products
H0 C : There is no significant relationship between the trust and confidence and
preferences of non-Muslim customers toward Islamic deposit products in Malaysia.
H1 C : There is significant relationship between the trust and confidence and
preferences of non-Muslim customers toward Islamic deposit products in Malaysia.
4.18 Correlation between the trust and confidence and preferences of non-
Muslim Customers toward Islamic deposit products
Trust and
Confidence
Preferences f non-
Muslim Customers
Trust and
Confidence
Pearson Correlation 1 0.838
P-value 0.000
N 250 250
Preferences of non-
Muslim Customers
Pearson Correlation 0.838 1
P-value 0.000
N 250 250
Source : Developed for the research
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
71
Table 4.18 showed the result of correlation between trust and confidence and the
preferences of non-Muslim customers toward Islamic deposit products. As result,
there is significant relationship between them where the p-value is less than 0.0001
significant level. Hence, H1 C will be accepted. As result showed, there is positive
relationship between trust and confidence and the preferences of non-Muslim
customers where the result showed a positive value of correlation coefficient at
0.838. The value of the correlation coefficient 0.838 is falls under the range of +0.71
to +0.90. Hence, the value indicated that the relationship between trust and
confidence and the preferences of non-Muslim customers toward Islamic deposit
products is highly positive.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
72
4.3.1.4 Correlation between Flexibility of Withdrawal and Preferences of
non-Muslim Customers toward Islamic Deposit Products
Hypothesis D : Relationship between Flexibility of Withdrawal and
Preferences of non-Muslim Customers toward Islamic Deposit Products
H0 D : There is no significant relationship between the flexibility of withdrawal and
preferences of non-Muslim customers toward Islamic deposit products in Malaysia.
H1 D : There is significant relationship between the flexibility of withdrawal and
preferences of non-Muslim customers toward Islamic deposit products in Malaysia.
4.19 Correlation between the flexibility of withdrawal and preferences of
non-Muslim Customers toward Islamic deposit products
Flexibility of
Withdrawal
Preferences of
non-Muslim
Customers
Flexibility of
Withdrawal
Pearson Correlation 1 0.811
P-value 0.000
N 250 250
Preferences of
non-Muslim
Customers
Pearson Correlation 0.811 1
P-value 0.000
N 250 250
Source : Developed for the research
As refer to the Table 4.18 above, it shows that the correlation coefficient between
flexibility of withdrawal and preferences of non-Muslim customers toward Islamic
Deposit Products is 0.811. In other word, these variables are having a strong
positive relationship. Furthermore, the p-value (<0.0001) is less than the
significance value of 0.01. Therefore H1D will be accepted while H0D is rejected.
In short, there is a significant positive relationship among flexibility of withdrawal
and preferences of non-Muslim customers toward Islamic Deposit Products. Which
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
73
means when the flexibility of withdrawal increase, the preferences of non-Muslim
customers toward Islamic Deposit Products will actually increase.
4.3.2 Multiple Regression Analysis
4.3.2.1 Diagnostic Checking
There are few diagnostic tests must be carried out to ensure that there is no violation
of assumptions which might lead to biased results in hypothesis testing before
proceed to interpret the regression model.
4.3.2.1.1 Normality Test
In this research, the error term will be investigated whether it is normally distributed
by using normality test. The Skewness and Kurtosis of residual distribution will be
involved in the normality test. Skewness used to evaluate whether the distribution
is symmetric while the Kurtosis used to measure whether the distribution is flatter
or peaked compared to a normal distribution. According to Park (2008), if the
outcome of Skewness and Kurtosis are close to zero, it indicates that the distribution
is approximately normal distributed.
Table 4.20 : Skewness and Kurtosis of Residuals
N Mean
Standar
d
Deviatio
n
Skewness Kurtosis
Statisti
c
Statisti
c Statistic
Statisti
c
Standar
d Error
Statisti
c
Standar
d Error
Standardiz
ed
Residual
250 14.072
0 4.30592 -0.909 -0.154 -0.179 0.307
Source : Developed for the research
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
74
Table 4.20 showed that the residuals are approximately normal distributed. From
Table 4.19, it showed that Skewness is -0.909 (close to zero) and Kurtosis is -0.179
which indicated that the distribution of residuals is approximately symmetric but
with left skewed data and right-tailed distribution.
4.3.2.1.2 Multicollinearity checking
Table 4.21 : Collinearity Table
Model Collinearity Statistic
Tolerance VIF
Sharia Compliance 0.212 4.727
Knowledge of non-Muslim
Customers 0.265 3.779
Trust and Confidence 0.178 3.607
Flexibility of Withdrawal 0.236 4.244
Source : Developed for the research
If the independent variables are highly correlated to each other, it may lead to
multicollinearity problem. According to the rule of thumb, when the VIF of a
variable exceeds 10 there is multicollinearity problem which the VIF showed that
it is highly collinear. From Table 4.21, the result showed that all independent
variables have VIF of below 10, therefore there is no multicollinearity problem in
the model.
4.3.2.1.3 Durbin Watson Test (Autocorrelation)
Table 4.22 : Durbin Watson Result
Model R R square Adjusted R
Square
Standard Error of
the Estimate
Durbin –Watson
1 0.891 0.795 0.791 1.96737 1.997
Source : Developed for the research
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
75
The serial correlation whether it is available in the term of regression or not can be
evaluated by using Durbin. It measures that the correct model has no autocorrelation
problem if statistic test falls between the ranges from 1.50 to 2.50. According to
Table 4.22, the Durbin-Watson test showed value of 1.997 which is close to 2,
therefore, the null hypothesis is accepted where there is no autocorrelation in the
model. Moreover, the model can be used for the following test. After passing all
diagnostic checking, the multiple linear regression model can be carried out for
interpreting and hypothesis testing.
4.3.2.2 Multiple Linear Regression Model
The elements of selected independent variable are the factors that will influence
the dependent variable. The regression model showed below can use to determine
the statement stated:
𝐶�̂� = c + β1SC + β2TC + β3KOC + β4FW
Where,
𝐶�̂� = Preferences of non-Muslim customers toward Islamic deposit
products
c = Constant
SC = Sharia Compliance
KOC = Knowledge of non-Muslim Customers
TC = Trust and Confidence
FW = Flexibility of Withdrawal
βi (where i = 1, 2, 3, 4) = Estimated coefficient of SC, KOC, TC, FW
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
76
Table 4.23 : Coefficient Table
Model
Unstandardized
Coefficients
Standardized
Coefficients t Sig.
Beta Std. Error Beta
(Constant) -1.551 0.537 -2.890 0.004
Sharia Compliance 0.536 0.071 0.473 7.515 0.000
Knowledge of non-
Muslim Customers 0.057 0.067 0.048 0.861 0.390
Trust and
Confidence 0.198 0.062 0.219 3.198 0.002
Flexibility of
Withdrawal 0.239 0.070 0.202 3.390 0.001
Source : Developed for the research
Referring to the Table 4.23, the equation can be written as follow:
(Preferences of non-Muslim customers toward Islamic deposit products) = -1.551+
0.536 (Sharia Compliance) + 0.057 (Knowledge of non-Muslim Customers) +
0.198 (Trust and Confidence) + 0.239 (Flexibility of Withdrawal)
The interpretation of constant term is usually not meaningful. It merely indicates
that even there is zero units for sharia compliance, knowledge of customer, trust
and confidence and flexibility of withdrawal, the Preferences of non-Muslim
customers toward Islamic deposit products will still be -1.551 units.
Sharia Compliance has the significant positive influence towards acceptance level
since p-value = 0.000 (less than 0.01 significant level). Beta = 0.536, this means
that for every one unit increases in Sharia Compliance, the Preferences of non-
Muslim customers toward Islamic deposit products will increase by 0.536 units,
holding other factors constant.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
77
For Knowledge of non-Muslim Customers, it also shows an insignificant influence
toward Preferences of non-Muslim customers toward Islamic deposit product. The
results show that p-value = 0.390 (more than 0.01 significant level). Beta = 0.057,
thus, for every one unit increases in Knowledge of non-Muslim Customers, the
Preferences of non-Muslim customers toward Islamic deposit products will
decrease by 0.057 units, holding other factors constant.
Furthermore, the result shows that the Trust and Confidence also has significant
positive influences towards acceptance level since p-value = 0.002 (less than 0.01
significant level). Beta =0.198 shows that for every one unit increases in Trust and
Confidence in Islamic banking, the Preferences of non-Muslim customers toward
Islamic deposit products will increase by 0.198 units, holding other factors constant.
Lastly, the result shows that the Flexibility of Withdrawal also has significant
positive influence towards acceptance level since p-value = 0.001 (less than 0.01
significant level). Beta =0.239, shows that for every one unit increases in Flexibility
of Withdrawal in Islamic banking, the Preferences of non-Muslim customers toward
Islamic deposit products will increase by 0.239 units, holding other factors constant
4.3.2.2.1 Coefficient of Determination (R2)
Table 4.24 : Model Summary
Model R R square Adjusted R
Square
Standard Error of
the Estimate
Durbin –Watson
1 0.891 0.795 0.791 1.96737 1.997
Source : Developed for the research
According to this regression equation, it illustrates the relationship between the
sharia compliance, knowledge of customer, trust and confidence and flexibility of
withdrawal and the preferences of non-Muslim customers toward Islamic deposit
products. Based on the Table 4.24, all the three independent variables are
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
78
significantly correlated with the dependent variable, except an independent variable
which is insignificant correlated with dependent variable which is the preferences
of non-Muslim customers because the correlation, R, is 0.891. From the analysis,
the coefficient of determination, R2, is 0.795 for the examined regression model. It
shows that 79.50% of the total variations in consumer preferences can be explained
by total variations in those three independent variables excluded knowledge of
customer. In contrast, there is a 21.90% show that the variation of consumer
preferences could not be presented by the equation. This can be explained that there
are other additional variables that also important in interpreting the consumer
preference.
4.3.2.2.2 Adjusted Coefficient of Determination (Adjusted R2)
The adjusted R2 will give the result more accurate and it is adjusted according to
the number of independent variables in the model. Additionally, the adjusted R2
avoid overestimating by adding an independent variable into the multiple regression
models. Referring to the Table 4.24, it shows that the adjusted R2 is 79.1%, indicates
that, after considering the degree of freedom, there are 79.1% of the variation in
predicted consumer preferences can be explained by the variation in the sharia
compliance, trust and confidence and flexibility of withdrawal, except the
knowledge of customer.
4.3.2.2.3 ANOVA Table
Table 4.25 : ANOVA table for multiple linear regression
Model Sum of
Squares df Mean Square F Sig.
Regression 3668.422 4 917.106 236.945 0.000
Residual 948.282 245 3.871
Total 4616.704 249
Source : Developed for the research
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
79
In the ANOVA Table 4.25, it showed that the F value of 236.945 is significant at
p-value equal to 0.000 which is lower than significant level of 0.001 (p < 0.01). In
fact, the regression model with those independent variables of sharia compliance,
trust and confidence and flexibility of withdrawal are suitable in evaluating the
dependent variable in the model, the preferences of non-Muslim customers, except
the one of independent variable knowledge of customer.
4.3.3 Hypothesis Testing
4.3.3.1 Overall F-test (Hypothesis E)
H0 E : There is no significant relationship between independent variables (Sharia
compliance, knowledge of non-Muslim customers, trust and confidence, flexibility
of withdrawal) and the preferences of non-Muslim customers toward Islamic
deposit products in Malaysia.
H1 E : There is significant relationship between the independent variables (Sharia
compliance, knowledge of non-Muslim customers, trust and confidence, flexibility
of withdrawal) and the preferences of non-Muslim customers toward Islamic
deposit products in Malaysia.
The significant of the Multiple Linear Regression is examine by using the overall
F-test. By referring to the ANOVA Table 4.26, the significant level of 0.01 is larger
than p-value which is 0.000 in the test. Hence, reject null hypothesis and conclude
that the independent variables have effects on acceptance level which is 0.01
significant level.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
80
4.3.3.2 T-test Hypothesis A
T-test used to examine the effect on independent variable on the dependent variable.
The effect can be determined by comparing the p-value. (refer to Table 4.23)
H0A : There is no significant relationship between the Sharia compliance and the
preferences of non-Muslim customers toward Islamic deposit products in Malaysia.
H1A : There is significant relationship between the Sharia compliance and the
preferences of non-Muslim customers toward Islamic deposit products in Malaysia.
The Table 4.23 showed the p-value of Sharia compliance is 0.000 which is smaller
than the significant level of 0.01. Hence, the null hypothesis is reject. The Sharia
compliance has beta coefficient which is positive 0.536 and concluded that Sharia
compliance and the preferences of non-Muslim customers toward Islamic deposit
products has significant positive effect on acceptance level at 0.01 significant level.
4.3.3.3 T-test Hypothesis B
H0B : There is no significant relationship between the knowledge of non-Muslim
customers and the preferences of non-Muslim customers toward Islamic deposit
products in Malaysia.
H1B : There is significant relationship between the knowledge of non-Muslim
customers and the preferences of non-Muslim customers toward Islamic deposit
products in Malaysia.
The Table 4.23 showed the p-value of knowledge of non-Muslim customers is 0.390
which is larger than the significant level of 0.01. Therefore, the null hypothesis is
not reject. The beta coefficient of knowledge of non-Muslim customers is positive
0.057 and it is conclude that knowledge of non-Muslim customers and the
preferences of non-Muslim customers toward Islamic deposit products has
insignificant positive effect on acceptance level at 0.01 significant level.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
81
4.3.3.4 T-test Hypothesis C
H0C : There is no significant relationship between the trust and confidence and the
preferences of non-Muslim customers toward Islamic deposit products in Malaysia.
H1C : There is significant relationship between the trust and confidence and the
preferences of non-Muslim customers toward Islamic deposit products in Malaysia.
According to Table 4.23, the trust and confidence showed p-value of 0.002 which
is lower than significant level of 0.01, therefore, the null hypothesis is rejected. The
result concluded that the trust and confidence has significant relationship to the
preferences of non-Muslim customers toward Islamic deposit products in Malaysia
because the beta coefficient is positive 0.198.
4.3.3.5 T-test Hypothesis D
H0D : There is no significant relationship between the flexibility of withdrawal and
the preferences of non-Muslim customers toward Islamic deposit products in
Malaysia.
H1D : There is significant relationship between the flexibility of withdrawal and the
preferences of non-Muslim customers toward Islamic deposit products in Malaysia.
According to Table 4.23, the flexibility of withdrawal showed p-value of 0.001
which is lower than significant level of 0.01, therefore the null hypothesis is rejected.
The result concluded that the flexibility of withdrawal has significant relationship
to the preferences of non-Muslim customers toward Islamic deposit products in
Malaysia because the beta coefficient is positive 0.239.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
82
4.4 Conclusion
In conclusion, particular of respondents like age, race, marital status, high education
level, employment status and monthly income is analyzed by using descriptive
analysis. The analysis is based on the measurement of central tendencies. By using
the reliability analysis, it helps to identify the reliability of the all four independent
variables in this study. Besides, this research used the Pearson correlation analysis
to evaluate the correlation between the independent variables which are Shari
compliance, knowledge of non-Muslim customers, trust and confidence, and
flexibility with the dependent variable, preferences of non-Muslim customers
toward Islamic deposit products. Then, run the diagnostic checking then only
interpreting the model. Furthermore, multiple linear regressions are used to estimate
the value of one dependent variable (customers’ preference) depend on two or more
independent variables (knowledge, trust and confidence and flexibility). After that,
ANOVA is used to test the model significance. At last, the hypothesis testing is
used to examine the correlation of each independent variable to one dependent
variable.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
83
CHAPTER 5 : DISCUSSION AND CONCLUSION
5.0 Introduction
In Chapter 5, the data presented in previous chapter will be discussed in details of
the result and the hypotheses will be determined whether it were supported by the
data. This chapter including summary of statistical analysis, discussion of major
findings, discussion and implications of study, limitation of study, and
recommendation for the future researches. However, an overall conclusion of this
study in line with research objectives will be discussed.
5.1 Summary of Statistical Analysis
This study examines the preferences of non-Muslim customers toward Islamic
deposit product based upon the independent variable of Sharia compliance,
knowledge of non-Muslim customer, trust and confidence, and flexibility of
withdrawal.
5.1.1 Descriptive Analysis
5.1.1.1 Respondents’ Demographic Profile
Respondents’ demographic profile analysis has been conducted by including the
items of age, race, marital status, highest education level, employment status, and
monthly income. In this research, a total of 250 respondents were participated.
Majority of the respondents were from the age group of between 17 to 25 years
which has 134 respondents (53.60%) and the minority of the respondents belong to
age group of 50 years and above which has only 15 respondents (6.00%). Besides,
a total of 211 respondents (84.40%) are Chinese, 32 respondents (12.80) are Indian
and the remaining are other races. Moreover, majority of the respondent are single
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
84
which total up to 190 respondents (76.00%) and 60 respondents (24.00%) are
married in marital status.
For the highest education level, majority of the respondents are holding bachelor of
degree which is 154 respondents (61.60%) and the minority is only 1 respondent
(0.40%) who holding a PHD. Furthermore, a total of 120 respondents (48.00%) are
students and there is 1 respondent (0.40%) was retired and same goes to
employment status of unable to work. For the monthly income of respondent, a total
of 204 respondents (81.60%) are having income below RM2500 and only 3
respondents (1.20%) are having income more than RM4500.
5.1.1.2 Central Tendencies Measurement of Construct
The frequency analysis used in this research to analyse the four selected
independent variables and one independent variable that were constructed for the
research purpose. The four selected independent variables are Sharia compliance,
knowledge of non-Muslim customers, trust and confidence, and flexibility of
withdrawal while the dependent variable is preferences of non-Muslim customers
toward Islamic deposit products. Each variable are included few statement that are
relevant, the statement with the highest mean is the most important statement over
others.
First, the statement of “I can obtain Mudarabah or Wakalah after I deposit my
saving in the Islamic bank.” which under independent variable Sharia compliance
ranked at the first place with mean value of 3.7800. This showed that this statement
is most significantly affecting the preferences of non-Muslim customers toward
Islamic deposit products among other statements under independent variable Sharia
compliance.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
85
Second, for independent variable knowledge of non-Muslim customers, the
statement of “Conventional bank and Islamic bank provides the same information
for customers” has the highest ranking in mean with value of 3.7040. This result
demonstrated that this statement are most important in determining the preferences
of non-Muslim customers toward Islamic banking products among other statements.
Third, under trust and confidence for independent variable, the statement of “If the
bank has higher image and reputation will make me more trust and confidence to
deposits” with mean value of 3.8280 was ranked at the first place. This showed that
this statement under this variable is significantly influencing the preferences of non-
Muslim customers toward Islamic deposit products.
Next, the statement of “I prefer to deposit in the Islamic bank which have higher
availability of credit” under the independent variable flexibility of withdrawal is
most significantly influencing the preferences of non-Muslim customers toward
Islamic deposit products. This statement has the highest ranking in mean among
other statements with value of 3.6520.
Lastly, for the dependent variable, the statement of “Purchasing Islamic deposit
products is a “must” to prevent financial difficulties” has the highest ranking with
mean value of 3.6800. This demonstrated that this statement is most significantly
affecting the preferences of non-Muslim customers toward Islamic deposit products
among other statement.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
86
5.1.1.3 Scale Measurement
The scale measurement for this study was based on the internal reliability test of
dependent variable and independent variables. The internal reliability test across the
Cronbach’s Alpha of 5constructs and 21 items to evaluate the level of reliability in
this research, included Sharia compliance, knowledge of non-Muslim customers,
trust and confidence, flexibility of withdrawal, and the preferences of non-Muslim
customers toward Islamic deposit products.
In this research, the construct of preferences of non-Muslim customers toward
Islamic deposit products and the construct of trust and confidence has the same
score value with Cronbach’s Alpha of 0.9570 which are the highest among the 5
constructs. The second highest score value showed by the construct of flexibility of
withdrawal with Cronbach’s Alpha of 0.9480 and it is followed by Sharia
compliance with a value of 0.9460. Lastly, the construct of knowledge of non-
Muslim customers has the lowest score value with Cronbach’s Alpha of 0.9410.
In fact, although there are different score value of Cronbach’s Alpha among the 5
constructs but it showed that all the value of reliability are greater than 0.70. Hence,
the 5 constructs have a very strong reliability.
5.1.2 Inferential Analysis
5.1.2.1 Pearson Correlation Analysis
In this research, the relationships between the 4 selected independent variables and
the preferences of non-Muslim customers toward Islamic deposit products were
examined by using Pearson Correlation Analysis.
From the results, it showed that all the fours independent variables have a positive
relationship with the preferences of non-Muslim customers toward Islamic deposit
products. First, the Sharia compliance has the highest significant positive
correlation with preferences of non-Muslim customers toward Islamic deposit
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
87
products at 0.865. Second, the independent of knowledge of non-Muslim customers
has a coefficient correlation of 0.776 showed that it is significantly positive
correlated with preferences of non-Muslim customers toward Islamic deposit
products. Third, trust and confidence is significantly positive correlated with
preference of non-Muslim customers toward Islamic deposit products at 0.838.
Lastly, the independent variable of flexibility of withdrawal with coefficient
correlation of 0.811 demonstrated that it is significantly positive correlated with the
dependent variable.
Therefore, the result showed that the Sharia compliance has the strongest impact on
the preferences of non-Muslim customers toward Islamic deposit products, and it is
followed by trust and confidence, flexibility of withdrawal and lastly the knowledge
of non-Muslim customers.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
88
5.1.2.2 Multiple Linear Regressions
According to the multiple linear regression analysis result, it showed that the
correlation coefficient, R, between the three independent variables (Sharia
Compliance, Knowledge of Customer, Trust and Confidence and Flexibility of
withdrawal) with the dependent variable (Customer preferences) is 0.891. This
indicates there is a strong positive linear relationship exists between the dependent
variable and all those independent variables. Besides that, the coefficient of
determination (R2) is 0.795, indicating 79.5% of the total variance in customer
preferences has been explained by Sharia compliance, knowledge of customer, trust
and confidence and flexibility of withdrawal. The ANOVA table indicates that the
F-value of 236.945 is significant (p-value = 0.000 < 0.01 significant level). In
conclusion, according to the table of coefficients, the regression question below is
formulated:
𝑪𝑷 ̂ (Preferences of non-Muslim customers) = -1.551 + 0.536(Sharia
Compliance) + 0.057 (Knowledge of non-Muslim Customers) + 0.198(Trust
and Confidence) + 0.239 (Flexibility of Withdrawal)
Sharia compliance has the strongest impact on customer preferences due to its
highest beta coefficient value of 0.536, when compared to the other independent
variables which are Flexibility of withdrawal (beta coefficient value = 0 .239),
knowledge of customer (beta coefficient value = 0.057) and trust and confidence
(beta coefficient value = 0.198).
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
89
5.2 Discussions on Major Findings
Table 5.1 : Summary of the results of hypothesis testing
Hypothesis Accepted Results
H1 A : There is significant relationship between the Sharia
compliance and preferences of non-Muslim customers
toward Islamic deposit products in Malaysia.
𝛽1̂=0.536
t test p-value = 0.000
H0 B : There is no significant relationship between the
knowledge of non-Muslim customers and preferences of
non-Muslim customers toward Islamic deposit products in
Malaysia.
𝛽2̂= 0. 057
t test p-value =0.390
H1 C : There is significant relationship between the trust
and confidence and preferences of non-Muslim customers
toward Islamic deposit products in Malaysia.
𝛽3̂ = 0. 198
t test p-value = 0.002
H1 D : There is significant relationship between the
flexibility of withdrawal and preferences of non-Muslim
customers toward Islamic deposit products in Malaysia.
𝛽4̂ = 0. 239
t test p-value = 0.001
H1 E : There is significant relationship between the
independent variables and preferences of non-Muslim
customers toward Islamic deposit products in Malaysia.
R2 = 0.795
Adjusted R2 = 0.791
F test p-value = 0.000
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
90
5.2.1 The effect of all independents variables on preferences of non-
Muslim customers toward Islamic deposit products.
H1 E : There is significant relationship between the independent variables and
preferences of non-Muslim customers toward Islamic deposit products in Malaysia.
Refer to Table 5.1, the alternative hypothesis is accepted when the p-value is less
than significant level, and the result shows that p-value equal to 0.000 which is
lower than 0.01 significant level. The results show that all the independent variables
have significant effects on customer preferences, except knowledge of customer is
below than the significant level (p-value = 0.390 > 0.05). Hence these are the
influencing factors to individual consumers in choosing Islamic banking.
In the following sections will more explained about the effect of each independent
variables towards customer preference.
5.2.2 The effect of Sharia compliance on preferences of non-Muslim
customers towards Islamic deposit products.
H1 A : There is significant relationship between the Sharia compliance and
preferences of non-Muslim customers toward Islamic deposit products in Malaysia.
Refer to Table 5.1, the alternative hypothesis is accepted when the p-value is less
than significant level, and the result shows that p-value = 0.000 < 0.01 significant
level. Sharia compliance has significant effect preferences of non-Muslim
customers toward Islamic deposit products in Malaysia. Beta coefficient indicates
one unit increases in Sharia compliance, the customer preferences will also increase
by 0.536units, holding other factors constant.
Hence, there is significant positive effect of Sharia compliance and customer
preferences. This hypothesis is supported with various studies and research findings.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
91
According to the journal of Abdullah, Sidek & Adnan (2012), the result is shows
that Sharia has positive relationship with non-Muslim customer when the demand
of products which attach with the Sharia will higher than which did not attach with
Sharia. Many customers prefer a secured product than none secured product, thus
the product which attached with Sharia will more attractive customer to purchase.
Normally it was effectively in long term products, because long term products more
uncertainty if no attach with Sharia compliance. Sharia compliance which is
processing with profit sharing and prohibit uncertainty, thus it can make customer
not that worried when in long term investing. Based on Azhar. M. & Awan, A. G.
(2014), they found that customer will more prefer to choose the products which are
processing by Sharia. That was because they believed that Sharia can protect their
benefits and there was prohibiting uncertainty. It can let customers believe that the
product which is attached by Sharia is more safety than others.
5.2.3 The effect of knowledge of non-Muslim customers on preferences
of non-Muslim customers towards Islamic deposit products.
H0B : There is no significant relationship between the knowledge of non-Muslim
customers and the preferences of non-Muslim customers toward Islamic deposit
products in Malaysia.
According to Table 5.1, the alternative hypothesis is rejected with p-value equal to
0.390 which is higher than 0.01 significant level. Knowledge of customer has no
significant effect on preferences of non-Muslim customers toward Islamic deposit
products in Malaysia. Thus, there is no relationship between knowledge of customer
and preferences of non-Muslim customers toward Islamic deposit products in
Malaysia.
Haque, Osman, and Ismail (2009) stated that there education is no significant effect
impact on selection towards Islamic banking because the p-value= (0.613> 0.05).
So, it indicates that there is no relationship between knowledge and of non-Muslim
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
92
customers toward Islamic deposit products in Malaysia. There is a justification for
the result, although the knowledge of Islamic deposit products are well-known by
non-Muslim customers, but they will choose conventional deposit products as the
benefit offered is better.
5.2.4 The effect of trust and confidence on preferences of non-Muslim
customers towards Islamic deposit products.
H1 C : There is significant relationship between the trust and confidence and
preferences of non-Muslim customers toward Islamic deposit products in
Malaysia.
According to Table 5.1, the alternative hypothesis is accepted with p-value equal
to 0.002 but still less than 0.01 significant level. Trust and confidence has
significant effect on preferences of non-Muslim customers toward Islamic deposit
products in Malaysia. Beta coefficient indicates one unit increases in Trust and
confidence, the customer preferences will also increase by 0.198 units, holding
other factors constant. Hence, there is significant positive relationship between
trust and confidence and customer preferences. This hypothesis is supported with
various studies and research findings.
Based on the study by Ergun and Djedovic (2011), the result of 0.559 is found in
confidence in Islamic banking which indicates that confidence has the effect on
customers’ preference. Research by Omar and Rahim (2016) proved that
confidence has a significant effect on the acceptance toward the Islamic banking.
Also, in El Nagar and El Biely (2011), assurance dimension has been proved has
the highest effect toward the customers’ preference among the other variables in
the study. Thus, it can be conclude that when the customer is satisfied, they tend
to consume more products.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
93
5.2.5 The effect of flexibility of withdrawal on preferences of non-
Muslim customers towards Islamic deposit products.
H1 D : There is significant relationship between the flexibility of withdrawal and
preferences of non-Muslim customers toward Islamic deposit products in
Malaysia.
According to Table 5.2.5, the alternative hypothesis is accepted with p-value equal
to 0.000 which is lower than 0.01 significant levels, flexibility of withdrawal have
significant effect on preferences of non-Muslim customers. Beta coefficient
indicates one unit increases in flexibility of withdrawal in Islamic banking; the
preferences of non-Muslims customers will also increase by 0.239 units, holding
other factors constant. Hence, there is significant positive effect by flexibility of
withdrawal in Islamic banking towards consumer preferences.
Researchers have discovered significant positive effect of Islamic banking products
and flexibility of withdrawal. In the study, the researchers found that the lower cost
of liquidity maintenance serve as reassurance to the potential suppliers of funds
about the credibility of the bank, thus will enhancing the bank's ability to borrow
(Greuning & Bratanovic, 1999).
Based on (Fabozzi & Modigliani, 2003) the inter-bank money market allows
surplus banks to channel funds to deficit banks using various instruments, thereby
maintaining the funding and liquidity mechanism necessary to promote stability in
the system. In addition, the researchers Awan (2009) stated that Islamic banks have
more profitability and liquidity than conventional banks. However, Haque (2010)
found that consumers in Malaysia have positive attitudes but males and females
attitudes are different towards Islamic banks.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
94
It can observe that the increased popularity of Islamic banking in days by days might
be influenced by its resilience to financial crisis. It does not mean that Islamic banks
are not at all affected by financial crisis, but explain by Parashar and Venkatesh
(2010) that Islamic banks are less susceptible to financial crisis. This point is further
supported by Beck (2010) relatively better performance of Islamic banks during
financial crisis since Islamic banks carries higher capitalization plus more liquidity
reserves. Furthermore based on Hasan and Dridi (2010) found that Islamic banks
showed more resilience during global financial crisis.
Moreover, Islamic banks can perform well their short-term liquidity needs by
issuing a set of acceptable instruments through the Islamic inter-bank money market
(Maroun, 2002).Based on Abdul Majid (2003) external source that can be used for
liquidity purposes is the central bank’s liquidity supply to the Islamic banks under
a Shari’ah compliancy-code.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
95
5.3 Implications of the Study
5.3.1 Managerial Implications
The outcome significances can be a perspective to Islamic bankers about the
behaviour of Malaysia non-Muslim customers on Islamic deposit products
currently. Therefore, Islamic bankers can provide a better service to customers
such as innovate the products and enhance non-Muslim customers’ confidence
toward Islamic banking by understanding the trend of non-Muslim customers’
preferences. Moreover, a huge amount of the respondents does not consume
Islamic banking products and services. Hence, there is a very huge market to be
focused and developed. Therefore this study provides implications to
policymakers since Malaysia is targeting to become a financial Islamic hub in
South East Asia, it is vital for policymakers to promote Islamic banking to seek
for higher acceptance level to wider coverage of Malaysians and establish a very
concrete Islamic banking and finance foundation. Policymakers can organized a
talk to educate the non-Muslim customers about the knowledge of Islamic deposit
products. Besides that, the website of Islamic banks can provide the details of the
related Islamic deposit product for the non-Muslim customers to refer before
transact any products.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
96
5.4 Limitation of Study
In this studies, the objective is to determine the factors that affect non-Muslims
customers’ preference against Islamic deposit products in Malaysia. The target
group of the respondents in this research will be the customers 17 years old and
above.
In this studies, there is few limitation need to be concerned. The sample size of this
studies is small and the location to conduct the survey is limited. There are 250 sets
of survey questionnaires was randomly issued to the respondents through hand to
hand method. The survey questionnaires was conducted in Kuala Lumpur, Ipoh,
Johor Bahru and George Town. Most of the data collected was from urban area as
the transportation to rural area was limited. Although the area was limited, the
studies was decided to continue to proceed with small amount of sample size
although it may cause the outcome less reliable.
Therefore, the knowledge of non-Muslim customers was inadequate in Islamic
deposit product offer by Islamic bank. The conventional banks in Malaysia was
allowed to offer Islamic banking products and services to customers under the dual-
window concept. Hence, this can lead non-Muslim customers confused and difficult
to differentiate the conventional bank and Islamic bank as both bank offer same
products and services. The result of the questionnaires will be inaccurate when the
respondents fill the answer based on their understanding of Islamic products and
services.
Limitation is a platform and idea to help future researchers to overcome the
obstacles. The result of the studies will more accurate if the researchers refer on
the limitation provide by previous researchers.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
97
5.5 Recommendation for Future Researches
There is some recommendation to help future researchers to cope with the problem
which similar to the studies. Researchers need to increase the number of the
questionnaire distribution to the participants. The increasing in sample size of the
studies can improve the reliability of the result as the sample size is an important
element in primary data studies. The chances to get significance difference between
the variable will increase. Hence, the studies can reflect the more accurate actual
result which more closer to the reality.
Besides that, the survey questionnaire can proceed with various techniques such as
online survey questionnaire, face to face interview or paper survey. These method
can help the survey achieve the data with a more effective way as the researchers
can save time and cost to visit the survey locations. Besides that, respondents can
consult researchers before proceed answer the questionnaires. When face to face
interview, researchers can direct ask the respondents about the knowledge toward
Islamic products and services. Respondents can inquiry the knowledge about
Islamic products and services such as the different between the conventional bank
and Islamic bank. Through this method, researchers can interaction with more
respondents in an effective way. Respondents can more understand with the purpose
in the survey.
Lastly, the questions set by the researchers in the questionnaire should be relevant
to the topic and do not confused the non-Muslim respondents. Questionnaire is the
core of the studies as it acquired the data that need to analysis in the later processing
stage. The accuracy of the data can save the time that use in the filtering process as
the fraud is minor in the questionnaires. The length of the questions set should be
simple and direct to the main purpose of the topic. The reason is because to answer
the paper questionnaires is consume of time, respondents will try to answer it
randomly to finish the questionnaires. This will highly probability to happen error
in the data.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
98
5.6 Conclusion
In the course of this studies, the studies has demonstrated that the factors that affect
non-Muslims customers’ preference against Islamic deposit products in Malaysia.
The factors include Sharia compliance, knowledge of non-Muslim customers, trust
and confidence and flexibility of withdrawal of non-Muslims toward Islamic
deposit products. A primary data survey is conducted by using the factors to create
questionnaires for all respondents.
Based on the analysis of data, the result show major of the factors was significance
to the non-Muslims preference against Islamic deposit products in Malaysia except
knowledge of non-Muslims customers. In conclusion, this studies has meet the
objectives where the preference of non-Muslim customers against Islamic deposit
product and it is positive relationship to the factors as examined in the studies.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
99
REFERENCES
Abdullah, Abdul Aziz., Sidek, Rokiah. & Adnan, Ahmad Azrin. (2012). Perception
of Non-
Muslims Customers towards Islamic Banks in Malaysia. International
Journal of Business & Social Science, 3(11), 151.
Abdullah ibn Masud., & Radi-Allahu unhu. (2016). Shariah-compliant
Investments.
Retrieved from http://www.ublfunds.com.pk/individual/resources-
tools/learning-center/shariah-compliant-investments/
Abdul Halim, A. H., & Norizaton, A. M . N. (2001). A Study on Islamic banking
education
and strategy for the new Millenium - Malaysian Experience. International
Journal of Islamic Financial Services, 2(4).
Abdul Jalil, M., & Muhammad Khalilur, R. (2014). The Impact of Islamic Branding
on
Consumer Preference towards Islamic Banking Services: An Empirical
Investigation in Malaysia. Journal of Islamic Banking and Finance, 2(1),
209-229.
Abdul Rais, A. M. (2003). Development of Liquidity Management Instruments:
Challenges
and Opportunities. International Conference on Islamic Banking: Risk
Management, Regulation and Supervision.
Abdul, A. A., Rokiah, S., & Adnan, A. A. (2012). Perception of Non-Muslim
Customers
towards Islamic Banks in Malaysia. International Journal of Business and
Social Science, 3(11).
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
100
Abdul-Rahman, Z. (2005). Riba: Practical Form and Reason Behind Prohibition.
NewStreet
Times.
Ahasanul, H., Jamil, O., and Ahmad Zaki, H. I. (2009). Factor Influences Selection
of
Islamic Banking: A Study on Malaysian Customer Preferences. American
Journal of Applied Sciences 6 (5): 922-928.
Ahasanul, H. (2010). Islamic Banking in Malaysia: A Study of Attitudinal
Differences of
Malaysian Customers. European Journal of Economics, Finance and
Administrative Sciences.
Ahmad, A., & Ahmad, K. (2000). Economic Development in Islamic Perspective,
Revisited.
Review of Islamic Economics, 9, 83-102.
Amin, M. and Isa, Z., (2008). An Examination of The Relationship Between Service
Quality
Perception and Customer Satisfaction: A SEM Approach Towards
Malaysian Islamic banking. International journal of Islamic and Middle
Eastern finance and management, 1(3), 191-209.
Anan, Mohd, Zulkarnain & Madher. (2015). Determinants of Bank Selections
Criteria’s in
Relation to Jordanian Islamic and Conventional Banks. International
Journal of Economics, Commerce and Management, 3(10), 294-306.
Ashraf, S., Robson, J. & Sekhon, Y, (2015). Consumer trust and confidence in the
compliance of Islamic banks. Journal of Financial Services Marketing,
20(2),133-114.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
101
Asyraf, W. D. (n.d.). Commodity Murabahah Programme (CMP): An Innovative
Approach to
Liquidity Management. Journal of Islamic Economics, Banking and
Finance.
Awan.G.A (2009), Comparison of Islamic and Conventional Banking in Pakistan.
Department of Economics, Islamia University, Bahawalpur-Pakistan.
Aysha Shahid, et. al. (2015). Malaysian Consumer Preferences for Islamic Banking
Attributes. Journal of Philosophy, Culture and Religion, 9, 11-14.
Azian, M., Yusniza, K., & Nur Fatimah, Z, R (2003). The Challenges on The
Marketing of
Equity-Based Financing Products of Islamic Banking. Journal of Marketing,
36, 46-54.
Aziza, N., & Awais, F. (2016). Customer’s Patronage in Selection Criteria of
Islamic Banks
in Pakistan. The international Journal of Business & Management, 4, 361.
Barathy D., Arunagiri s. & Ravindran R. (2011). A Study on Consumers’
Preferences of
Islamic Banking Products and Services in Sungai Petani. Academic
Research International, 1(3), 290-302.
Beck, T., Demirguc-Kunt, A., & Merrouche, O. (2010). Islamic Vs. Conventional
Banking
Business Model. World Bank - Efficiency and Stability Policy, Research
Working Paper, 5446, October.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
102
Bley, J., & Kuehn, K. (2003). Conventional Versus Ialamic Finances: Student
Knowledge
and Perception in the United Arab Emirates. International Journal of
Islamic Financial Services 5(4).
Costaldo, S. (2007). Trust in market relationship. Cheltenham: Elgar Publishing
Limited.
Deposits.org.(2014). Islamic Deposit. Retrieved from
https://www.deposits.org/dictionary/term/islamic-deposit/
Doraisamy, B., Shanmugam, A., & Raman, R. (2011). A Study on
Consumers’ preferences of Islamic Banking Products and Services in
Sungai Petani. Academic Research International, 1(3), 290-302.
Ellen A. Drost. (n.t.). Validity and Reliability in Social Science Research.
Education
Research and Perspectives, 38(1), 105-123.
El-Nagar, H. M., & El-Biely, M. M. (2011). A comparison of banking behaviour of
Islamic
bank customer: some evidence from Egypt and the Kingdom of Saudi
Arabia (KSA). International Journal of Economics & Financial Studies,
1(1), 1-14.
Ennew, C, Kharouf, H, and Sekhon, H (2011). Trust in UK financial services: A
longitudinal
analysis. Journal of Financial Services Marketing, 16(1), 65-75.
Ergun, U., & Djedovic, I. (2011). Islamic Banking with a Closer Look at Bosnia
and
Herzegovina: Knowledge, Perceptions and Decisive Factors for Choosing
Islamic Banking. In 8th International Conference on Islamic Economics and
Finance, Doha–Qatar, 18th–20th December.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
103
Fabozzi, F. J., & Modigliani, F. (2003). Capital Markets: Institutions and
Instruments (Third
ed.). New Jersey: Prentice Hall. 01.
Farah Amaline, M. N., Ahmad Shukri, Y., & Mustafa Omar, M. (2013). A Critical
Literature
Review for Islamic Banks Selection Criteria in Malaysia. International
Business Research, 6(6).
Fungacova, Z., Hasan, I. & Weill, L. (2016). Trust in banks. BOFIT Discussion
Paper No.
7/2016; Gabelli School of Business, Fordham University Research Paper
No. 2782358. Available at SSRN: https://ssrn.com/abstract=2782358
Greuning, H. V., & Bratanovic, S. B. (1999). Analyzing Banking Risk: A
Framework for
Assessing Corporate Governance and Financial Risk Management.
Washinton D. C.: The World Bank.
Greuning, H.V., Bratanovic, S. B.,(2009). Analyzing Banking Risk a Framework
for
Assessing Corporate Governance and Risk Managemen 3rd Edition. The
International Bank for Reconstruction and Development, THE WORLD
BANK 1818 H Street, N.W. Washington, D.C. 20433
Hameda & Mona (2011). Comparison of Banking Behavior of Islamic Bank
Customer Some
Evidence from Egypt and the Kingdom of Saudi Arabia (KSA).
International Journal of Economics & Financial Studies, 1(1), 1-14.
Hamzah, N., Ishak, N. M., & Nor, N. I. M. (2015). Customer Satisfactions on
Islamic
Banking System. Journal of Economics, Business and Management, 3(1),
140-144.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
104
Hanudin Amin. (2013). Some Viewpoints of Islamic Banking Retail Deposit
Products in
Malaysia. Journal of Internet Banking and Commerce, 18(12), 1-13.
Haque, A. K. M., Osman, J., & Ismail, A. Z. (2009). Factor influences selection of
Islamic
banking: a study on Malaysian customer preferences. American Journal of
Applied Sciences, 6(5), 922-928.
Haron, S., & Wan-Azmi, W.N. (2008). Determinants of Islamic and conventional
deposits in
the Malaysian banking system. Managerial Finance, 34(9), 618-643.
Hasan, M., and Dridi, J., (2010). The Effects of the Global Crisis on Islamic and
Conventional
Banks: A Comparative Study; IMF Working Paper, WP/10/201.
Hoq, M. Ziaul. , Sultana, N. & Amin, M. (2010). This The Effect of Trust,
Customer
satisfaction and Image on Customers’ Loyalty in Islamic Banking Sector.
South Asian Journal of Management, 17(1), 70-93.
Humna, M., Zafar, Z., & Shahid, A. (2015). Knowledge, Attitudes and Practices
(KAP) Survey:
A Case Study on Islamic Banking at Peshawar, Pakistan. FWU Journal of
Social Sciences, 9(2), 1-13.
Hussein, K. (2010). Bank-level stability factors and consumer confidence – A
comparative
study of Islamic and conventional banks ’ product mix. Journal of Financial
Services Marketing, 15(3), 259–270.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
105
Ismal, R. (2010). Strengthening and Improving the liquidity Management in Islamic
Banking.
Humanomics, 26(1), 18-35.
Keong, L. L., Kho, M. L., Low, S. P., & Wong, Z. H. (2012). Awareness of Islamic
Banking
Products and Services among Non-Muslims in Malaysia. Retrieved march
2016.
Keria, K., Jamil, H., & Firdaus, A. (2015). Determining Factors of Customers’
Preferences: A
Case of Deposit Products in Islamic Banking. Procedia - Social and
Behavioral Sciences 224, 167 – 175.
Keria, K., Jamil, H., & Firdaus, A. (2016). Determining Factors of Customers’
Preferences: A
Case of Deposits Products in Islamic Banking. Procedia - Social and
Behavioral Science, 167-175.
Kowalczyk, D. (2015). Descriptive Research Design: Definition, Examples &
Types.
Retrived from http://study.com/academy/lesson/descriptive-research-
design-definition-examples-types.html
Mamun, R., Kabir Hassan, M., & Abu Umar, F. A. (2008). Quality Perception of
the Customers
towards Domestic Islamic Banks in Bangladesh. Journal of Islamic
Economics, Banking and Finance, 5, 110-131.
Maran, M., Chan, W. J., Lim, P. G., Low, P. M., & Tan, Y. P. (2010). Islamic
Banking:
Selection Criteria and Implications. Global Journal of Human Social
Science, 10(4), 52-62.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
106
Maroun, Y. (2002). Liquidity management and trade financing. In R. Abdel Karim,
& S.
Archer (Eds.), Islamic finance: Innovation and growth, 163–175.
Euromoney Books and AAOIFI.
Metawa, S. A., & Almossawi, M. (1998). Banking behavior of Islamic bank
customers:
perspectives and implications. International Journal of Bank Marketing,
16(7), 299-313.
Michell, P. , Reast, J. & Lynch, J. (1988). Exploring The Foundations of Trust.
Journal of
Marketing Management, 14, 159-172.
Mobin, M. A. & Ahmad, A. U. F. (2014). Liquitity Management of Islamic Banks:
The
Evidence from Malaysian Pratice. 11(2), 175-186.
Mohamad Anwar, T. (2017). Perceptions and Motivations of Non-Muslim
Customers of
Islamic Banking in Gorontalo. Imperial Journal of Interdisciplinary
Research (IJIR), 3.
Mohammed, H., & Leo,S. (2009). Customer perception on service quality in retail
banking in
Middle East: the case of Qatar. International Journal of Islamic and Middle
Eastern Finance and Management, 2(4), 338-350.
Mohd Shahril, A. R., & Abd Rahim, R. (2017). Non-Muslim Perception on Islamic
Banking
Products and Services in Malaysia. World Journal of Islamic History and
Civilization, 7(1).
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
107
Mokhlis, S., Nik Mat, N. H. & Salleh, H.S. (2008). Commercial Bank Selection:
The Case of
Undergraduate Students in Malaysia. International Review of Business
Research Papers, 4(5), 258-270.
Muslim, A., Zaidi, I., Rodrigue, F. (2013). Islamic banks Contrasting the Drivers of
Customer
Satisfaction on Image, Trust, and Loyalty of Muslim and non-Muslim
Customers in Malaysia. International Journal of Bank Marketing, 31(2), 79-
97.
Naser, K., & Moutinho, L. (1997). Strategic Marketing Management: the Case of
Islamic
Banks. International Journal of Bank Marketing, 15(6), 187-203.
Naveed, A. K., & Kashif, U. R. (2010). Customer satisfaction and awareness of
Islamic
banking system in Pakistan. African Journal of Business Management, 4(5),
662-671.
Noradiva H., Noriah M. I. & Nurul I. M. N. (2015). Customer Satisfactions on
Islamic
Banking System. Journal of Economics, Business and Management, 3(1),
140-144.
Norafifah, A., & Sudin, H. (2002). Perception of Malaysian Corporate Customers
Towards
Islamic Banking Products & Services. International Journal of Islamic
Financial Services, 3(4).
Okumus, H. S. (2005). Interest free banking in Turkey: A study of customer
satisfaction and
bank selection criteria. Journal of Economic cooperation, 26(4), 51-86.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
108
Omar, S. S., Arokiasamy, L., & Ismail, M. (2009). The background and challenges
faced by
the small and medium enterprises. A human resources development
perspectives. International Journal of Business and Management, 4(10), 95-
102.
Omar, W. A. W., & Rahim, H. A. (2016). Perception of Non-Muslims towards
Islamic
Banking Revisited: SEM Approach. Mediterranean Journal of Social
Sciences, 7(1), 139-149.
Omer, H. (1992). The implication of Islamic beliefs and practice on Islamic
financial
institutions in the UK, PhD dissertation, Loughborough University,
Loughborough.
Parashar S.P., and Venkatesh, J., (2010). How Did Islamic Banks Do During Global
Financial Crisis? Banks and Bank Systems, 5(4), 54-62.
Park, H. M. (2008). Univariate Analysis and Normality Test Using SAS, Stata, and
SPSS. The Trustees of Indiana University, 1-39.
Parvez, S. (2014). Perception of non Muslim clients about Islamic banking in
Bangladesh.
African Journal of Marketing Management, 6(7).
Rahman, M. K. (2014). The Impact of Islamic Branding on Consumer Preference
towards
Islamic Banking Services: An Empirical Investigation in Malaysia. Journal
of Islamic Banking and Finance, 2(1), 209-229.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
109
Rashid, M., Hassan, M. K., & Ahmad, A. (2008). Quality Perception of the
Customers
towards Domestic Islamic Banks in Bangladesh, Journal of Islamic
Economics, Banking and Finance, 5, 110-131.
Ricardo, B., & Hanudin, A. (2009). Offsore Bankers’ Perception on Islamic
Banking Nichefor
Labuan: an Analysis. International Journal of Commerce and Management,
19(4), 293 - 308.
Richards, R. (2011). Factors Affecting Consumer Preferences. Retrieved from
http://www.ehow.com/info_8116011_factors-affecting-consumer-
preferences.html
Rizwan, M., Yaseen, G., Nawaz, A.,and Hussain, L., (2014). Incorporating Attitude
Towards
Islamic Banking in an integrated Service Quality, Satisfaction, Trust and
Loyalty Model. International Journal of Accounting and Financial
Reporting,4.2, 456.
Rosly, S.A., & Mohd-Zaini, M.A. (2008). Risk-return analysis of Islamic banks’
investment
deposits and shareholders’ fund. Managerial Finance, 34(10), 695-707.
Roy, S. K., Devlin, J. F., & Sekhon, H. (2015). The impact of fairness on
trustworthiness and
trust in banking. Journal of Marketing Management, 31(9), 996-1017.
Saturna Capital. (n.d.).
Retrieved from https://www.saturna.com/amana/growthfund#/overview
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
110
Saunders, M., Lewis, P. &Thornhill, A. (2009).Research methods for business
students, 5th
ed., Harlow, Pearson Education.
Sekhon, H., Ennew,C., & Devlin, J. (2014). Trustworthiness and Trust: Influences
an
Implications. Journal of Marketing Management, 30 (3–4), 409–430.
Shahid, A., Mehmood, T., Ahmad, N., Ahmad, H., & Shafique, M. N. (n.d.).
Malaysian
Consumer Preferences for Islamic Banking Attributes. Journal of
Philosophy, Culture and Religion, 9.
Siddiqi, N. (2008). ‘‘Current financial crisis and Islamic economics’’, lecture paper
in the
long distance IDB courses in Islamic Banking and Finance.
Sudin, H., Norafifah, A., & Sandra, L, P. (1994). Bank Patronage Factors of Muslim
and Non-
Musilim Customers. International Journal of Bank Marketing, 12(1), 32-40.
Susan, E & Wyse. (2011). What is the Difference between Qualitative Research and
Quantitative Research. Retrieved from
https://www.snapsurveys.com/blog/what-is-the-difference-between-
qualitative-research-and-quantitative-research/
Sutan Emir, H., & Nouf K, A. (2012). Non-Muslims’ Perception Toward Islamic
Banking
Services in Saudi Arabia. Journal of US-China Public Administration, 9(6),
654-670.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
111
Syed (2011). Profile Analysis of the Customers of Islamic Banking in Khyber
Pakhtunkhwa.
Business Review, 6(1), 107-129.
Tengku Wasimah, R. H., Rosemaliza, A. R., & Abu Bakar, H. (2015). Factors
Influencing
Products’ Knowledge of Islamic Banking Employees. Journal of Islamic
Studies and Culture, 3(1), 23-33.
Ulrich, D., & Shehab, M. (2008). Review and Analysis of Current Shariah-
compliant Equity
Screening Practices. International Journal of Islamic and Middle Eastern
Finance and Management, 1(4), 285-303.
Utusan Online. (2005b). Mengenali Akaun Pelaburan dalam Perbankan Islam (trans:
Recognizing Investment Account in Islamic Banking). Retrieved from
http://www.utusan.com.my
Wajdi Dusuki, A., & Irwani Abdullah, N. (2007). Why do Malaysian customers
patronise
Islamic banks? International Journal of Bank Marketing, 25(3), 142-160.
Yusoff, R., & Wilson, R. (2005). (2005). An Econometric Analysis of
Conventional and
Islamic Bank Deposits in Malaysia. Review of Islamic Economics, 9(1), 31-
52.
Zairani, Z., Rohaya, S., &. Hafizi, M. A. (2008). A Comparative Analysis of
Bankers’
Perceptions on Islamic Banking. International Journal of Business and
Management.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
112
Zarehan, S., & Hazlina Abdul, K. (2012). Attitude and Patronage Factors of Bank
Customers
in Malaysia: Muslim and non-Muslim Views. Journal of Islamic Economics,
Banking and Finance, 8(4).
Zikmund, W. G., Griffin, M., Carr, J. C., &Babin, B. J. (2009). Business Research
Methods
(8th Edition). South-Western Publishing.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
113
Appendix A: Survey Questionnaire
UNIVERSITI TUNKU ABDUL RAHMAN
FACULTY OF BUSINESS AND FINANCE
BACHELOR OF BANKING AND FINANCE (HONS)
FINAL YEAR PROJECT
TITLE OF TOPIC :
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’
PREFERENCE AGAINST ISLAMIC DEPOSIT PRODUCTS IN
MALAYSIA.
Dear Respondent,
Thank you for participating in our study.
The questionnaire is aim to collect the information about the factors that affect Non-
Muslim customers' preference against Islamic deposit products in Malaysia for our
academic final year project. There are 6 pages contain in this questionnaire and will
take you some time, but please be patient, pay more attention to each question and
as cautious as possible to answer this questionnaire. The instructions are very clear
and we would very appreciate it if you can finish the questionnaire as fast as
possible.
The personal information in the questionnaire will be treated with secrecy, and
participants name will not be revealed in this questionnaire. The answers provided
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
114
will only be used for this study and once again, we would very appreciate for your
cooperation in filling this questionnaire.
Section A: Demographic Profile
The following questions refer to the demographic profile of the respondent.
Please provide the appropriate information by placing a ( √ ) in the bracket
provided to represent your answer.
1. Age
17 – 25 years
26 – 35 years
36 – 50 years
50 years and above
2. Race
Chinese
Indian
3. Martials Status
Married
Single
4. Highest Education Level
UPSR/PMR/SRP/SPM
STPM/A-Level/Foundation
Diploma/Advanced Diploma
Bachelor Degree
Master Degree
PHD
Others : _________________
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
115
5. Employment Status
Students
Employed for wages
Self-employed
Homemaker
Retired
Unable to work
6. Monthly Income
Less than RM2500
RM2500 – RM 3500
RM3500 – RM 4500
More than RM4500
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
116
Section B: Sources of Information
1. Please answer the following questions by placing a ( √ ) in the bucket
provided for five different level which are Strongly Disagree, Disagree,
Neutral, Agree and Strongly Agree.
Shariah Compliance
Strongly
Disagree
Disagree Neutral Agree Strongly
Agree
1. I prefer Shariah
deposit products more
than Non- Shariah
deposit products from
the bank.
2. I cannot obtain profit
sharing after I deposit
my saving in the
Islamic bank.
3. Islamic product is
avoid from the
activities such as
alcohol, gambling,
pornography, tobacco
and pork processing.
4. When facing any risk
of economic, the
Islamic products
provide by Islamic
bank will be
minimized by the risk
sharing with the bank.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
117
2. Please answer the following questions by placing a ( √ ) in the bucket
provided for five different level which are Strongly Disagree, Disagree,
Neutral, Agree and Strongly Agree.
Knowledge of Customer
Strongly
Disagree
Disagree Neutral Agree Strongly
Agree
1. I can easily obtain
useful information
about Islamic deposit
products from the
bank.
2. Conventional bank and
Islamic bank are
provide the same
information toward the
customer.
3. I believe bank’s staffs
have enough
knowledge to answer
questions regarding
Islamic deposit
products provided by
the bank.
4. The different age of
people could not
receive the information
accurately.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
118
3. Please answer the following questions by placing a ( √ ) in the bucket
provided for five different level which are Strongly Disagree, Disagree,
Neutral, Agree and Strongly Agree.
Trust and Confidence
Strongly
Disagree
Disagre
e
Neutra
l
Agree Stron
gly
Agree
1. I trust Islamic banking
because it strictly upholds
the confidentiality of
consumers’ privacy.
2. I believe Islamic banks
provide the sameness of
true and exact information
of the products and
services to all consumers.
3. I trust the Islamic banks’
account and operational
transparency system.
4. I am confident with the
Islamic bank because it
accreted with Shariah
principle.
5. If the bank has higher
image and reputation will
make me more trust and
confidence to deposits.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
119
4. Please answer the following questions by placing a ( √ ) in the bucket
provided for five different level which are Strongly Disagree, Disagree,
Neutral, Agree and Strongly Agree.
Flexibility of Withdrawal
Strongly
Disagree
Disagree Neutral Agree Strongly
Agree
1. I prefer to deposit in the
Islamic bank which have
higher availability of
credit.
2. I will choose the Islamic
bank which provides ATM
at convenient location.
(Eg: Mall, University,
Hospital)
3. I prefer to deposit in the
Islamic bank with online
services provided.
4. I prefer to deposit in the
Islamic bank which can
fulfil my personal needs.
(Eg: Emergency
withdrawal)
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
120
Section C: Customers preference toward Islamic deposit products
Please answer the following questions by placing a ( √ ) in the bucket provided for
five different level which are Strongly Disagree, Disagree, Neutral, Agree and
Strongly Agree.
Customers’ preference Strongly
Disagree
Disagree Neutral Agree Strongly
Agree
1. Purchasing Islamic
deposit products is a
“must” to prevent
financial difficulties.
2.The concepts of
interest free and profit
and loss sharing make
me prefer to Islamic
deposit products rather
than conventional
deposit products.
3.I prefer to Islamic
deposit products
compared to
conventional deposit
products because of the
structure and processing
transparency.
4.Engaging in Islamic
deposit products would
be my consideration for
the time to come.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
121
Appendix B: Pilot test reliability output
RELIABILITY
/VARIABLES=KOC1 KOC2 KOC3 KOC4
/SCALE('ALL VARIABLES') ALL
/MODEL=ALPHA.
Reliability
Scale: ALL VARIABLE
Case Processing Summary
N %
Cases Valid 30 100.0
Excludeda 0 .0
Total 30 100.0
a. Listwise deletion based on all variables in
the procedure.
Reliability Statistics
Cronbach's
Alpha N of Items
.875 4
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
122
RELIABILITY
/VARIABLES=TC1 TC2 TC3 TC4 TC5
/SCALE('ALL VARIABLES') ALL
/MODEL=ALPHA.
Reliability
Scale: ALL VARIABLES
Case Processing Summary
N %
Cases Valid 30 100.0
Excludeda 0 .0
Total 30 100.0
a. Listwise deletion based on all variables in
the procedure.
Reliability Statistics
Cronbach's
Alpha N of Items
.742 5
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
123
RELIABILITY
/VARIABLES=FW1 FW2 FW3 FW4
/SCALE('ALL VARIABLES') ALL
/MODEL=ALPHA.
Reliability
Scale: ALL VARIABLES
Case Processing Summary
N %
Cases Valid 30 100.0
Excludeda 0 .0
Total 30 100.0
a. Listwise deletion based on all variables in
the procedure.
Reliability Statistics
Cronbach's
Alpha N of Items
.958 4
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
124
RELIABILITY
/VARIABLES=CP1 CP2 CP3 CP4
/SCALE('ALL VARIABLES') ALL
/MODEL=ALPHA.
Reliability
Scale: ALL VARIABLES
Case Processing Summary
N %
Cases Valid 30 100.0
Excludeda 0 .0
Total 30 100.0
a. Listwise deletion based on all variables in
the procedure.
Reliability Statistics
Cronbach's
Alpha N of Items
.935 4
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
125
Appendix C: Frequency output
DEMOGRAPHIC PROFILE
FREQUENCIES VARIABLES=Age Race Marital_status Education_level
Employment_status Monthly_income
/ORDER=ANALYSIS.
Frequency Table
Age
Frequency Percent
Valid
Percent
Cumulative
Percent
Valid 17 to 25 Years 134 53.6 53.6 53.6
26 to 35 years 76 30.4 30.4 84.0
36 to 50 years 25 10.0 10.0 94.0
50 years and above 15 6.0 6.0 100.0
Total 250 100.0 100.0
Race
Frequency Percent Valid Percent
Cumulative
Percent
Valid Chinese 211 84.4 84.4 84.4
Indian 32 12.8 12.8 97.2
Other 7 2.8 2.8 100.0
Total 250 100.0 100.0
Marital_status
Frequency Percent Valid Percent
Cumulative
Percent
Valid Single 190 76.0 76.0 76.0
Married 60 24.0 24.0 100.0
Total 250 100.0 100.0
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
126
Education_level
Frequency Percent
Valid
Percent
Cumulative
Percent
Valid UPSR/PMR/SRP/SPM 18 7.2 7.2 7.2
STPM/A-
Level/Foundation 33 13.2 13.2 20.4
Diploma/Advanced
Diploma 31 12.4 12.4 32.8
Bachelor Degree 154 61.6 61.6 94.4
Master Degree 4 1.6 1.6 96.0
PHD 1 .4 .4 96.4
Other 9 3.6 3.6 100.0
Total 250 100.0 100.0
Employment_status
Frequency Percent
Valid
Percent
Cumulative
Percent
Valid Students 120 48.0 48.0 48.0
Employed for wages 93 37.2 37.2 85.2
Self-employed 25 10.0 10.0 95.2
Homemaker 10 4.0 4.0 99.2
Retired 1 .4 .4 99.6
Unable to work 1 .4 .4 100.0
Total 250 100.0 100.0
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
127
Monthly_Income
Frequency Percent
Valid
Percent
Cumulative
Percent
Valid Less than RM2500 204 81.6 81.6 81.6
RM2500 – RM 3500 28 11.2 11.2 92.8
RM3500 – RM 4500 15 6.0 6.0 98.8
More than RM4500 3 1.2 1.2 100.0
Total 250 100.0 100.0
SHARIA COMPLIANCE
FREQUENCIES VARIABLES=SC1 SC2 SC3 SC4
/ORDER=ANALYSIS.
Frequencies
Statistics
SC1 SC2 SC3 SC4
N Valid 250 250 250 250
Missing 0 0 0 0
SC1
Frequency Percent Valid Percent
Cumulative
Percent
Valid Strongly Disagree 14 5.6 5.6 5.6
Agree 37 14.8 14.8 20.4
Neutral 63 25.2 25.2 45.6
Agree 108 43.2 43.2 88.8
Strongly Disagree 28 11.2 11.2 100.0
Total 250 100.0 100.0
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
128
SC2
Frequency Percent Valid Percent
Cumulative
Percent
Valid Strongly Disagree 11 4.4 4.4 4.4
Agree 14 5.6 5.6 10.0
Neutral 55 22.0 22.0 32.0
Agree 109 43.6 43.6 75.6
Strongly Disagree 61 24.4 24.4 100.0
Total 250 100.0 100.0
SC3
Frequency Percent Valid Percent
Cumulative
Percent
Valid Strongly Disagree 5 2.0 2.0 2.0
Agree 23 9.2 9.2 11.2
Neutral 61 24.4 24.4 35.6
Agree 99 39.6 39.6 75.2
Strongly Disagree 62 24.8 24.8 100.0
Total 250 100.0 100.0
SC4
Frequency Percent Valid Percent
Cumulative
Percent
Valid Strongly Disagree 16 6.4 6.4 6.4
Agree 26 10.4 10.4 16.8
Neutral 76 30.4 30.4 47.2
Agree 104 41.6 41.6 88.8
Strongly Disagree 28 11.2 11.2 100.0
Total 250 100.0 100.0
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
129
DESCRIPTIVES VARIABLES=SC1 SC2 SC3 SC4
/STATISTICS=MEAN STDDEV MIN MAX.
Descriptive
Descriptive Statistics
N Minimum Maximum Mean Std. Deviation
SC1 250 1.0000 5.0000 3.396000 1.0486097
SC2 250 1.0000 5.0000 3.780000 1.0196858
SC3 250 1.0000 5.0000 3.760000 .9931492
SC4 250 1.0000 5.0000 3.408000 1.0304286
Valid N (listwise) 250
KNOWLEDGE OF NON-MUSLIM CUSTOMERS
FREQUENCIES VARIABLES=KOC1 KOC2 KOC3 KOC4
/ORDER=ANALYSIS.
Frequencies
Statistics
KOC1 KOC2 KOC3 KOC4
N Valid 250 250 250 250
Missing 0 0 0 0
Frequency Table
KOC1
Frequency Percent Valid Percent
Cumulative
Percent
Valid Strongly Disagree 6 2.4 2.4 2.4
Agree 47 18.8 18.8 21.2
Neutral 37 14.8 14.8 36.0
Agree 125 50.0 50.0 86.0
Strongly Disagree 35 14.0 14.0 100.0
Total 250 100.0 100.0
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
130
KOC2
Frequency Percent Valid Percent
Cumulative
Percent
Valid Strongly Disagree 9 3.6 3.6 3.6
Agree 28 11.2 11.2 14.8
Neutral 43 17.2 17.2 32.0
Agree 118 47.2 47.2 79.2
Strongly Disagree 52 20.8 20.8 100.0
Total 250 100.0 100.0
KOC3
Frequency Percent Valid Percent
Cumulative
Percent
Valid Strongly Disagree 9 3.6 3.6 3.6
Agree 26 10.4 10.4 14.0
Neutral 64 25.6 25.6 39.6
Agree 109 43.6 43.6 83.2
Strongly Disagree 42 16.8 16.8 100.0
Total 250 100.0 100.0
KOC4
Frequency Percent Valid Percent
Cumulative
Percent
Valid Strongly Disagree 7 2.8 2.8 2.8
Agree 26 10.4 10.4 13.2
Neutral 101 40.4 40.4 53.6
Agree 96 38.4 38.4 92.0
Strongly Disagree 20 8.0 8.0 100.0
Total 250 100.0 100.0
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
131
DESCRIPTIVES VARIABLES=KOC1 KOC2 KOC3 KOC4
/STATISTICS=MEAN STDDEV MIN MAX.
Descriptives
Descriptive Statistics
N Minimum Maximum Mean Std. Deviation
KOC1 250 1.0000 5.0000 3.544000 1.0258036
KOC2 250 1.0000 5.0000 3.704000 1.0337595
KOC3 250 1.0000 5.0000 3.596000 1.0023987
KOC4 250 1.0000 5.0000 3.384000 .8807080
Valid N (listwise) 250
TRUST AND CONFIDENCE
FREQUENCIES VARIABLES=TC1 TC2 TC3 TC4 TC5
/ORDER=ANALYSIS.
Frequencies
Statistics
TC1 TC2 TC3 TC4 TC5
N Valid 250 250 250 250 250
Missing 0 0 0 0 0
Frequency Table
TC1
Frequency Percent Valid Percent
Cumulative
Percent
Valid Strongly Disagree 6 2.4 2.4 2.4
Agree 29 11.6 11.6 14.0
Neutral 44 17.6 17.6 31.6
Agree 132 52.8 52.8 84.4
Strongly Disagree 39 15.6 15.6 100.0
Total 250 100.0 100.0
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
132
TC2
Frequency Percent Valid Percent
Cumulative
Percent
Valid Strongly Disagree 7 2.8 2.8 2.8
Agree 26 10.4 10.4 13.2
Neutral 50 20.0 20.0 33.2
Agree 127 50.8 50.8 84.0
Strongly Disagree 40 16.0 16.0 100.0
Total 250 100.0 100.0
TC3
Frequency Percent Valid Percent
Cumulative
Percent
Valid Strongly Disagree 6 2.4 2.4 2.4
Agree 29 11.6 11.6 14.0
Neutral 42 16.8 16.8 30.8
Agree 140 56.0 56.0 86.8
Strongly Disagree 33 13.2 13.2 100.0
Total 250 100.0 100.0
TC4
Frequency Percent Valid Percent
Cumulative
Percent
Valid Strongly Disagree 16 6.4 6.4 6.4
Agree 26 10.4 10.4 16.8
Neutral 27 10.8 10.8 27.6
Agree 125 50.0 50.0 77.6
Strongly Disagree 56 22.4 22.4 100.0
Total 250 100.0 100.0
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
133
TC5
Frequency Percent Valid Percent
Cumulative
Percent
Valid Strongly Disagree 6 2.4 2.4 2.4
Agree 47 18.8 18.8 21.2
Neutral 23 9.2 9.2 30.4
Agree 82 32.8 32.8 63.2
Strongly Disagree 92 36.8 36.8 100.0
Total 250 100.0 100.0
DESCRIPTIVES VARIABLES=TC1 TC2 TC3 TC4 TC5
/STATISTICS=MEAN STDDEV MIN MAX.
Descriptives
Descriptive Statistics
N Minimum Maximum Mean Std. Deviation
TC1 250 1.0000 5.0000 3.676000 .9542886
TC2 250 1.0000 5.0000 3.668000 .9599280
TC3 250 1.0000 5.0000 3.660000 .9315962
TC4 250 1.0000 5.0000 3.716000 1.1172902
TC5 250 1.0000 5.0000 3.828000 1.1849186
Valid N (listwise) 250
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
134
FLEXIBILITY OF WITHDRAWAL
FREQUENCIES VARIABLES=FW1 FW2 FW3 FW4
/ORDER=ANALYSIS.
Frequencies
Statistics
FW1 FW2 FW3 FW4
N Valid 250 250 250 250
Missing 0 0 0 0
Frequency Table
FW1
Frequency Percent Valid Percent
Cumulative
Percent
Valid Strongly Disagree 9 3.6 3.6 3.6
Agree 28 11.2 11.2 14.8
Neutral 43 17.2 17.2 32.0
Agree 135 54.0 54.0 86.0
Strongly Disagree 35 14.0 14.0 100.0
Total 250 100.0 100.0
FW2
Frequency Percent Valid Percent
Cumulative
Percent
Valid Strongly Disagree 9 3.6 3.6 3.6
Agree 26 10.4 10.4 14.0
Neutral 45 18.0 18.0 32.0
Agree 139 55.6 55.6 87.6
Strongly Disagree 31 12.4 12.4 100.0
Total 250 100.0 100.0
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
135
FW3
Frequency Percent Valid Percent
Cumulative
Percent
Valid Strongly Disagree 6 2.4 2.4 2.4
Agree 29 11.6 11.6 14.0
Neutral 60 24.0 24.0 38.0
Agree 137 54.8 54.8 92.8
Strongly Disagree 18 7.2 7.2 100.0
Total 250 100.0 100.0
FW4
Frequency Percent Valid Percent
Cumulative
Percent
Valid Strongly Disagree 16 6.4 6.4 6.4
Agree 26 10.4 10.4 16.8
Neutral 35 14.0 14.0 30.8
Agree 125 50.0 50.0 80.8
Strongly Disagree 48 19.2 19.2 100.0
Total 250 100.0 100.0
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
136
DESCRIPTIVES VARIABLES=FW1 FW2 FW3 FW4
/STATISTICS=MEAN STDDEV MIN MAX.
Descriptive
Descriptive Statistics
N Minimum Maximum Mean Std. Deviation
FW1 250 1.0000 5.0000 3.636000 .9774074
FW2 250 1.0000 5.0000 3.628000 .9535476
FW3 250 1.0000 5.0000 3.528000 .8788090
FW4 250 1.0000 5.0000 3.652000 1.0989663
Valid N (listwise) 250
CUSTOMERS’ PREFERENCES
FREQUENCIES VARIABLES=CP1 CP2 CP3 CP4
/ORDER=ANALYSIS.
Frequencies
Statistics
CP1 CP2 CP3 CP4
N Valid 250 250 250 250
Missing 0 0 0 0
Frequency Table
CP1
Frequency Percent Valid Percent
Cumulative
Percent
Valid Strongly Disagree 25 10.0 10.0 10.0
Agree 23 9.2 9.2 19.2
Neutral 33 13.2 13.2 32.4
Agree 95 38.0 38.0 70.4
Strongly Disagree 74 29.6 29.6 100.0
Total 250 100.0 100.0
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
137
CP2
Frequency Percent Valid Percent
Cumulative
Percent
Valid Strongly Disagree 14 5.6 5.6 5.6
Agree 36 14.4 14.4 20.0
Neutral 65 26.0 26.0 46.0
Agree 108 43.2 43.2 89.2
Strongly Disagree 27 10.8 10.8 100.0
Total 250 100.0 100.0
CP3
Frequency Percent Valid Percent
Cumulative
Percent
Valid Strongly Disagree 25 10.0 10.0 10.0
Agree 23 9.2 9.2 19.2
Neutral 49 19.6 19.6 38.8
Agree 113 45.2 45.2 84.0
Strongly Disagree 40 16.0 16.0 100.0
Total 250 100.0 100.0
CP4
Frequency Percent Valid Percent
Cumulative
Percent
Valid Strongly Disagree 14 5.6 5.6 5.6
Agree 37 14.8 14.8 20.4
Neutral 43 17.2 17.2 37.6
Agree 117 46.8 46.8 84.4
Strongly Disagree 39 15.6 15.6 100.0
Total 250 100.0 100.0
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
138
DESCRIPTIVES VARIABLES=CP1 CP2 CP3 CP4
/STATISTICS=MEAN STDDEV MIN MAX
Descriptives
Descriptive Statistics
N Minimum Maximum Mean Std. Deviation
CP1 250 1.0000 5.0000 3.680000 1.2649111
CP2 250 1.0000 5.0000 3.392000 1.0405127
CP3 250 1.0000 5.0000 3.480000 1.1657771
CP4 250 1.0000 5.0000 3.520000 1.0947116
Valid N (listwise) 250
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
139
Appendix D: Reliability test output
SSHARIA COMPLIANCE
RELIABILITY
/VARIABLES=SC1 SC2 SC3 SC4
/SCALE('ALL VARIABLES') ALL
/MODEL=ALPHA.
Reliability
Scale: ALL VARIABLES
Case Processing Summary
N %
Cases Valid 250 100.0
Excludeda 0 .0
Total 250 100.0
a. Listwise deletion based on all variables in
the procedure.
Reliability Statistics
Cronbach's
Alpha N of Items
.946 4
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
140
KNOWLEDGE OF NON-MUSLIM CUSTOMERS
RELIABILITY
/VARIABLES=KOC1 KOC2 KOC3 KOC4
/SCALE('ALL VARIABLES') ALL
/MODEL=ALPHA.
Reliability
Scale: ALL VARIABLES
Case Processing Summary
N %
Cases Valid 250 100.0
Excludeda 0 .0
Total 250 100.0
a. Listwise deletion based on all variables in
the procedure.
Reliability Statistics
Cronbach's
Alpha N of Items
.941 4
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
141
TRUST AND CONFIDENCE
RELIABILITY
/VARIABLES=TC1 TC2 TC3 TC4 TC5
/SCALE('ALL VARIABLES') ALL
/MODEL=ALPHA.
Reliability
Scale: ALL VARIABLES
Case Processing Summary
N %
Cases Valid 250 100.0
Excludeda 0 .0
Total 250 100.0
a. Listwise deletion based on all variables in
the procedure.
Reliability Statistics
Cronbach's
Alpha N of Items
.957 5
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
142
FLEXIBILITY OF WITHDRAWAL
RELIABILITY
/VARIABLES=FW1 FW2 FW3 FW4
/SCALE('ALL VARIABLES') ALL
/MODEL=ALPHA
Scale: ALL VARIABLES
Case Processing Summary
N %
Cases Valid 250 100.0
Excludeda 0 .0
Total 250 100.0
a. Listwise deletion based on all variables in
the procedure.
Reliability Statistics
Cronbach's
Alpha N of Items
.948 4
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
143
CUSTOERMS’ PREFERENCES
RELIABILITY
/VARIABLES=CP1 CP2 CP3 CP4
/SCALE('ALL VARIABLES') ALL
/MODEL=ALPHA.
Reliability
Scale: ALL VARIABLES
Case Processing Summary
N %
Cases Valid 250 100.0
Excludeda 0 .0
Total 250 100.0
a. Listwise deletion based on all variables in
the procedure.
Reliability Statistics
Cronbach's
Alpha N of Items
.957 4
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
144
Appendix E: Correlation output
CORRELATIONS
/VARIABLES=Customer_preferences Sharia_Compliance
Knowledge_of_Customer Trust_and_Confidence
Flexibility_of_withdrawal/PRINT=TWOTAIL NOSIG
/MISSING=PAIRWISE.
Customer
preferences
Sharia
Compliance
Knowledge
of_Customer
Trust and
Confidence
Flexibility of
withdrawal
Customer
preferences
Pearson Correlation 1 .865 .776 .838 .811
Sig. (2-tailed) .000 .000 .000 .000
N 250 250 250 250 250
Sharia
Compliance
Pearson Correlation .865 1 .821 .859 .810
Sig. (2-tailed) .000 .000 .000 .000
N 250 250 250 250 250
Knowledge
of Customer
Pearson Correlation .776 .821 1 .817 .791
Sig. (2-tailed) .000 .000 .000 .000
N 250 250 250 250 250
Trust and
Confidence
Pearson Correlation .838 .859 .817 1 .855
Sig. (2-tailed) .000 .000 .000 .000
N 250 250 250 250 250
Flexibility
of
withdrawal
Pearson Correlation .811 .810 .791 .855 1
Sig. (2-tailed) .000 .000 .000 .000
N 250 250 250 250 250
**. Correlation is significant at the 0.01 level (2-tailed).
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
145
Appendix F: Normality test output
Regression
Variables Entered/Removeda
Model
Variables
Entered
Variables
Removed Method
1 Flexibility_of
_withdrawal,
Knowledge_o
f_Customer,
Sharia_Comp
liance,
Trust_and_Co
nfidenceb
. Enter
a. Dependent Variable: Customer_preferences
b. All requested variables entered.
Residuals Statisticsa
Minimu
m Maximum Mean
Std.
Deviation N
Predicted Value 4.6304 20.0382 14.0720 3.83831 250
Residual -4.34300 6.04966 .00000 1.95150 250
Std. Predicted
Value -2.460 1.554 .000 1.000 250
Std. Residual -2.208 3.075 .000 .992 250
a. Dependent Variable: Customer_preferences
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
146
DESCRIPTIVES VARIABLES=Customer_preferences
/STATISTICS=MEAN STDDEV KURTOSIS SKEWNESS.
Descriptive Statistics
N Mean
Std.
Deviation Skewness Kurtosis
Statistic Statistic Statistic Statistic
Std.
Error Statistic
Std.
Error
Customer
preferences 250 14.0720 4.30592 -.909 .154 -.179 .307
Valid N
(listwise) 250
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
147
Appendix G: Collinearity output
REGRESSION
/MISSING LISTWISE
/STATISTICS COLLIN TOL
/CRITERIA=PIN(.05) POUT(.10)
/NOORIGIN
/DEPENDENT Customer_preferences
/METHOD=ENTER Sharia_Compliance Knowledge_of_Customer
Trust_and_Confidence
Flexibility_of_withdrawal
/RESIDUALS DURBIN.
Regression
Variables Entered/Removeda
Model
Variables
Entered
Variables
Removed Method
1 Flexibility_of_
withdrawal,
Knowledge_of
_Customer,
Sharia_Compli
ance,
Trust_and_Co
nfidenceb
. Enter
a. Dependent Variable: Customer_preferences
b. All requested variables entered.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
148
Model Summaryb
Model Durbin-Watson
1 1.997a
a. Predictors: (Constant), Flexibility_of_withdrawal,
Knowledge_of_Customer, Sharia_Compliance, Trust_and_Confidence
b. Dependent Variable: Customer_preferences
Coefficientsa
Mod
el
Collinearity Statistics
Tolerance VIF
1 Sharia Compliance .212 4.727
Knowledge of Customer .265 3.779
Trust and Confidence .178 5.607
Flexibility of withdrawal .236 4.244
Collinearity Diagnosticsa
Mod
el
Dimensi
on
Eigenva
lue
Conditi
on
Index
Variance Proportions
(Consta
nt)
Sharia
Complian
ce
Knowled
ge_of_Cu
stomer
Trust_an
d_Confid
ence
Flexibili
ty_of_
withdra
wal
1 1 4.924 1.000 .00 .00 .00 .00 .00
2 .044 10.583 .98 .02 .01 .01 .01
3 .013 19.314 .00 .03 .65 .06 .39
4 .011 20.916 .02 .65 .34 .02 .26
5 .008 24.989 .00 .30 .00 .90 .33
a. Dependent Variable: Customer_preferences
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
149
Residuals Statisticsa
Minimum Maximum Mean Std. Deviation N
Predicted Value 4.6304 20.0382 14.0720 3.83831 250
Residual -4.34300 6.04966 .00000 1.95150 250
Std. Predicted Value -2.460 1.554 .000 1.000 250
Std. Residual -2.208 3.075 .000 .992 250
a. Dependent Variable: Customer_preferences
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
150
Appendix H: Multiple linear regression model output
REGRESSION
/MISSING LISTWISE
/STATISTICS COEFF OUTS R ANOVA
/CRITERIA=PIN(.05) POUT(.10)
/NOORIGIN
/DEPENDENT Customer_preferences
/METHOD=ENTER Sharia_Compliance Knowledge_of_Customer
Trust_and_Confidence
Flexibility_of_withdrawal.
Regression
Variables Entered/Removeda
Model Variables Entered Variables Removed Method
1 Flexibility_of_withdra
wal, .
Enter
Knowledge_of_Custom
er,
Sharia_Compliance,
Trust_and_Confidenceb
a. Dependent Variable: Customer_preferences
b. All requested variables entered.
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
151
Model Summary
Model R R Square
Adjusted R
Square
Std. Error of
the Estimate
1 .891a .795 .791 1.96737
a. Predictors: (Constant), Flexibility_of_withdrawal,
Knowledge_of_Customer, Sharia_Compliance,
Trust_and_Confidence
ANOVAa
Model
Sum of
Squares df Mean Square F Sig.
1 Regression 3668.422 4 917.106 236.945 .000b
Residual 948.282 245 3.871
Total 4616.704 249
a. Dependent Variable: Customer preferences
b. Predictors: (Constant), Flexibility of withdrawal, Knowledge of Customer, Sharia
Compliance, Trust and Confidence
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
152
Coefficientsa
Model
Unstandardized
Coefficients
Standardized
Coefficients
t Sig. B Std. Error Beta
1 (Constant) -1.551 .537 -2.890 .004
Sharia
Compliance .536 .071 .473 7.515 .000
Knowledge
of
Customer
.057 .067 .048 .861 .390
Trust and
Confidence .198 .062 .219 3.198 .002
Flexibility
of
withdrawal
.239 .070 .202 3.390 .001
a. Dependent Variable: Customer preferences
Residuals Statisticsa
Minimum Maximum Mean Std. Deviation N
Predicted Value 4.6304 20.0382 14.0720 3.83831 250
Residual -4.34300 6.04966 .00000 1.95150 250
Std. Predicted Value -2.460 1.554 .000 1.000 250
Std. Residual -2.208 3.075 .000 .992 250
a. Dependent Variable: Customer preferences
FACTORS THAT AFFECT NON-MUSLIM CUSTOMERS’ PREFERENCE AGAINST
ISLAMIC DEPOSIT PRODUCTS IN MALAYSIA
153
Appendix J: Chi square distribution table