Adoption of Islamic Banking Services: Evidence from Western China

Abstract

Islamic banking has been growing rapidly worldwide and is not only widespread in Muslim countries, but also in western countries as well. Even if Islamic banking services have been offered in Ninxia province since 2009 to serve about 23 million Muslims in the population, the development of Islamic banking in China has been almost stagnant. Notwithstanding this reality, this study seeks to examine the factors that influence Chinese Muslims’ intention to adopt Islamic banking. Employing the theory of planned behaviour (TPB), the study investigates the effects of attitude, subjective norms, perceived behavioural control and religious obligation on intention to adopt Islamic banking services among the Chinese Muslims. Survey data was collected from 669 Muslim respondents across four major cities in western China namely Lanzhou, Wulumuqi, Xining and Yinchuan. The hypothesized relationships
are examined by using Analysis of Moments Structures (AMOS). The results show that apart from the common determinants of TPB: attitude, subjective norms, and perceived behaviour control, religious obligation significantly influence the intention to adopt Islamic banking among Chinese Muslims in western China. This indicates that Chinese Muslims regard religious obligation as very important in deciding their choice of banking.