The Factors Affecting Consumer Attitude and Purchase Intentions toward Islamic Mortgage Finance in Pakistan

Abstract

From the very beginning in Islamic history, Muslims have been able to introduce an interest-free system that helps the producers to mobilize their resources to meet the needs of the consumers. Muslims scholars have expressed concern about interest-based activities and called for the development of alternative systems to relieve interest-based activities so that Muslims must act in accordance with their teachings in Islam. In this manner, the growing needs of Muslims traders, economist and banks have forced Muslims to develop an alternative system to meet the needs of these people. Therefore, this study has focused on determining the factors which affect the consumer attitude and purchase intention towards Islamic mortgage finance in Pakistan In this context, the researcher has also set three important inclusion criteria for the study population; first, respondents are the current clients of sharia’a complaint banks. Second, respondents have intent to buy houses in the future. Third, respondents are in the age of 25 years old and above to specify that they are legally able to enter into a contract with banks for mortgages. Total 450 questionnaires are circulated, in which only 300 managed to be gathered from the respondents. 49 questionnaires were incomplete, leaving 251 usable questionnaires for purpose of examination. The sample size of this study has been kept to 251. The analysis has been carried out by correlation matrix, regression analysis, CFA, path assessment and model for goodness. The results determined that there is a significant influence of consumer attitude towards the purchase intention while mediation was also found. Moreover, the service quality and compatibility also had a significant influence on consumer attitude but the product choice has no impact on the consumer attitude. However, the influence of service quality and compatibility has also been found significant on purchase intention through the intervention of consumer attitude. Furthermore this study also reveals that attitude does not mediate the relationship between the product choice and service quality.