CUSTOMER ACCEPTANCE DETERMINANTS FOR ISLAMIC BANKS IN PAKISTAN

Abstract

Purpose - The main purpose of this paper is to report a study into: the determinants affecting a customer’s decision to patronize Islamic banking in Pakistan. Design/methodology/approach - In this research data was mainly collected with the help of structured questionnaire having convenient sample size of no more than 50 respondents from selected areas of Karachi which was convenient for the researcher. The researcher selected five conventional banks which are operating in Karachi and selected at least three branches of each conventional bank to conduct the research. The data was then analyzed using Microsoft Excel as a tool and it is supposed to be more appropriate for the analysis of the study. Findings - It was found that “Religion” was the most important factor which made customers’ shift from conventional banks to Islamic banks followed by “Convenience”, as the second most important factor and “Service Quality” was ranked at the third position. Furthermore, other factors didn’t show much more relation in order to patronize Islamic banks. Another useful finding was that Meezan bank having more attraction towards conventional banking customers as compared to other Islamic banks. Research limitations - Limitation of this study is that data is mainly collected from conventional banks customer. Apart from that, the data is collected from fewer numbers of respondents which are convenient for the researcher and only in selected areas of Karachi. Most of respondents did not have sufficient knowledge to answer some questions in the survey due to which they tended to choose the neutral option on the Likert scale. Practical implications - The most important practical implication of this study is for Islamic banks. The management and the banker’s of the Islamic banks can easily benefits from my findings in the development, and implementation stage of their future marketing strategies.