Application of the Theory of Planned Behaviour Model for Examining Customers’ Intentions towards Islamic Hire Purchase Financing

  • Rizwan Raheem Ahmed
  • Jolita Vveinhardt
  • Dalia Streimikiene
  • Vaida Pilinkienė KTU
Keywords: Behavioural economics, Customers’ intention, Confirmatory factor analysis, Theory of Planned behaviour, Structural equation modeling, Exploratory factor analysis, Islamic hire purchase

Abstract

The paper deals with issues relevant to behavioural economics studies. The object of the research paper is to investigate the factors that are significant for using the Islamic hire purchase (IHP) (automobile financing) in Pakistan. The theory of planned behaviour (TPB) model was applied to examine the intention of customers for buying automobiles through Islamic hire purchase financing. 730 respondents were selected availed the automobile financing (IHP) or intent to use this facility from major Islamic banks of Pakistan. The structural equation modelling (SEM) based multivariate approach was applied. Results of the study demonstrated that basic items of TPB instrument, for instance, subject norm (SN), attitude, and perceived behavioral control (PBC) have a significant influence on the intention of customers to avail the Islamic hire purchase (IHP) financing. At the same, researchers have assimilated three factors such as religious belief (RB), pricing of Islamic banking products (PIP), and knowledge of Islamic banking products (KIP) as moderating variables that verified their moderation on the TPB model, and exhibiting a cogent impact between items of TPB model and intention to buy the Islamic hire purchase (IHP).

DOI: http://dx.doi.org/10.5755/j01.ee.30.2.21589

Published
2019-04-29
Section
COMMERCE OF ENGINEERING DECISIONS