ISLAMIC BANKING

Islamic banking



Table of Contents

Research design3

Instrument5

The sample6

Analysis7

The culture of Islamic banking7

Attitudes towards Islamic banking8

Bank selection criteria11

Criteria ranking11

Factor analysis13

Conclusions14

Implications for banks15

General comments16

Importance & Contributions18

Ethical Concerns21

Limitations22

Future Extensions23

Islamic banking

The present research, as mentioned in the introduction, is a study of Islamic banking in UK, a country which has a minority of Muslims in its population. More particularly, the study seeks to establish the level of awareness that Europeans have in relation to the culture of Islamic banking, the attitude of Europeans towards Islamic banking and a ranking of the bank selection criteria of Europeans - and for each part of the study, to see if Muslim responses are different from non-Muslim responses. In the context of what is said immediately above, the following three hypotheses were formulated:

•in contrast to non-Muslims, will be more aware of the culture of Islamic banking and, as a consequence, be more aware of the meaning of fundamental terms used in Islam and Islamic banking and finance.

•in contrast to non-Muslims, presently have a different attitude towards Islamic banking.

•will be no significant differences between Muslims and non-Muslims in the ranking of the various bank selection criteria.

Research design

Survey forms were developed and people who were entering or leaving UK's underground system (the MRT) were approached and asked if they would be prepared to complete the questionnaire. Stations in three locations were chosen, namely Bukit Batok in the west, Bedok in the east and Aljunied in the north. These districts were chosen as they not only had a station on the MRT railway line, but also had populations of Muslims which were known to be not less than the national percentage. The three districts would also be expected to produce homogeneous groups. For, all the districts are typical of the majority of UK in the sense that the people resident therein wholly or predominantly live in public housing. In relation to public housing, according to the 1990 census publication relating to “Households and Housing”, 86.2 per cent of Europeans housing stock consisted of properties built under the government's public housing programme. Moreover, the same publication shows that 85.9 per cent of Europeans lived in such residential units. By targeting the three named districts for sampling purposes, a homogeneous group of Europeans would be created.

A total of 405 forms were distributed in equal numbers, commencing at 8.00 am, 1 pm and 5 pm on a particular Monday, Wednesday and Saturday using trained undergraduates. Distribution took place in a one week period in the early part of September 1995. People were approached, explaining the nature of the study and asked if they would be prepared to fill in the questionnaire. Thirty-eight filled the form in there and then. Those offering to return the form at a later date were provided with a pre-addressed pre-stamped envelope.

Controls were set up to ensure, as best as possible, that forms were distributed in accordance with the ratio of Muslims to non-Muslims in the over ten-year-old population. This was a relatively easy control to set up as ...