Notwithstanding with its name, Islamic banking is fast deriving evidences with non-Muslims worldwide due to its rigorous loaning principals and reflecting industry attempts to get the better of spiritual beliefs in order to derive greater market portion. Its merchandises can be offered to Muslims every bit good as non-Muslims since Shari’ah finance is a mixture of Islamic economic sciences and modern loaning rules. While it was antecedently a little metameric market providing merely to Muslims who wanted to hedge from interest-based conventional banking, Islamic finance has been successful in pulling a wider circle of followings in recent old ages due to cash-rich Gulf Muslim investors and lifting demand for ethical investment ( Abdullah A.A. et al. , 2012 )
Due to the demand of fiscal establishment for Muslim clients, the Islamic banking system ( IBS ) was introduced to fulfill their demands and demands. Such institute provides them the Islamic platform for their fiscal minutess in which it is wholly based on Islamic Shari’ah regulations whereby does non supply by the conventional banking industry.
A survey by Gait and Worthington ( 2007 ) found that the Islamic finance is defined as a fiscal service or merchandise chiefly executed to stay the chief dogmas of Shari’ah or Islamic jurisprudence. The chief beginnings of Shari’ah are Holy Quran, Hadith, Sunna, Ijma, Qiyas, and Ijtihad. IBS is simply based on Islamic Shari’ah construct, which excepted the factor of involvement. Not merely been appreciated by Muslims but the conventional banking industries besides have been adopted the Islamic banking thoughts ‘ . They have opened their independent Islamic operational Windowss which they are following the Shari’ah regulations and ordinances.
Background of Research
Over the past three decennaries, Islamic banking has appeared as one of the fastest lifting industries. It has spread to all corners of the Earth and received wide credence by both Muslims and non-Muslims ( Iqbal and Molyneux, 2005 ) . Muslim Bankss perform the same indispensable maps as Bankss do in the conventional systems, except that the demand for them to transport out their minutess in conformity with the regulations and rules of Islam ( Henry & A ; Wilson, 2004 ; Iqbal & A ; Mirakhor, 2007 ) .
Wilson ( 1995 ) reported that as one of the most of import participants in service industry today, Islamic banking is no longer considered as a concern entity endeavoring merely to carry through the spiritual duties of the Muslim community, but more significantly, as a concern that is inescapably in demand for persuasive the clients as retaining the old 1s. This means that Islamic banking establishments are distributing their wings towards non-Muslims market.
It is of import to understand that Muslim Bankss offer merchandises and services that are really much similar to conventional Bankss and with this position intense competition exists. It is now a fact that consumers of all merchandises and services tend to go more demanding due to the currents market place that are going competitory.
However, in the context of Malaysia and from the position of Malayan consumers, a positive perceptual experience towards this manner of banking is far more important than other Muslim states. This is due to the being of dual-banking system. As mentioned earlier, Malaysia has had the double banking system, whereby the Islamic banking system operates in analogue with other conventional system since 1983. As such, it is normally the degree of consumers ‘ satisfaction that can act upon the public presentation of an Islamic bank and determines its fight and success when competition intensifies and the Bankss start to offer more or less similar merchandises and services.
Based on the BNM one-year study, there were 17 Islamic Bankss which were found in Malaysia as shown in Table 1.1:
Table 1.1: Muslim Banks Found in Malaysia
Name of the Bank
Affin Islamic Bank Berhad
Alliance Islamic Bank Berhad
AmIslamic Bank Berhad
Bank Islam Malaysia Berhad
CIMB Islamic Bank Berhad
EONCAP Islamic Bank Berhad
Hong Leong Islamic Bank Berhad
Maybank Islamic Bank Berhad
Public Islamic Bank Berhad
RHB Islamic Bank Berhad
Al Rajhi Banking & A ; Investment Corporation ( Malaysia ) Berhad
Asiatic Finance Bank Berhad
HSBC Amanah Malaysia Berhad
Kuwait Finance House ( Malaysia ) Berhad
OCBC Al-Amin Bank Berhad
Standard Chatered Saadiq Berhad
Beginning: Central Bank of Malaysia, 2010
All of the Islamic Bankss above are offering house funding bundle which besides available in Kota Kinabalu. The applicable rules offered are called Mudharabah, Musyarakah, Murabahah, Al-Baj Bithaman Ajil, Al-Ijarah, Al-Takjiri, Qard Hasan, Al-Wakalah, and Al-Kafalah Wadiah ( Sudin, et.al 1994 ) .
2.1 Problem Statement
There are a batch of alterations in the Malayan fiscal landscape during the last 20 old ages particularly with the debut of Islamic banking. As one could detect and detect the Islamic banking has generated dimension and phenomenal in banking sector. Such scenario has besides led to the alterations in the client ‘s gustatory sensation and demand for better and high quality banking services. Since the outgrowth of more fiscal establishments in recent old ages, either conventional or Islamic, clients, Muslims and non-Muslims likewise have been presented with tremendous picks in term of banking merchandises and services. One could state that clients are spoilt with many picks to take the 1s that meet their demands and wants before doing any determinations.
The same state of affairs happens to Islamic banking whereby the merchandises and services offered by them have to confront stiff competition non merely with the conventional banking but besides among the merchandises offered by the Islamic banking itself. Although Islamic banking faces stiff competition from conventional banking, particularly its place funding, it is deriving evidences with non-Muslims in Malaysia, including Sabah, peculiarly in Kota Kinabalu. The demand for place funding among the non-Muslim consumers is increasing and the ground why non-Muslim consumers in Kota Kinabalu select or sponsor place funding of Islamic banking instead than conventional banking. In position of the fact that there has no survey been made on the demand of this merchandise in Sabah by the non-Muslim consumers, it is really hard for the research worker to bespeak the growing of the demand of place funding among the non-Muslim consumers.
2.2 Objective of the Study
The aims of the survey are fundamentally based on the job statement and aims are as follows:
To look into the dominant factors that influence the non-Muslim clients patronize Islamic banking ‘s place or lodging funding.
To find the non-Muslim clients ‘ degree of credence towards Islamic banking merchandises or services other than lodging funding.
To analyze the degree of satisfaction among the non-Muslim clients towards the housing/home funding of Islamic banking.
2.3 Scope of survey
The survey covers samples that will be identified based on a study conducted among non-Muslim clients of Bank Islam Malaysia Berhad ( BIMB ) and Bank Muamalat Malaysia Berhad ( BMMB ) since both Bankss are the taking fully fledged Muslim Bankss in Malaysia. A questionnaire was prepared to beg information from non-Muslim clients of Islamic Bankss in Kota Kinabalu towards Islamic house funding.
2.4 Research Questions
Based on the statement job, the undermentioned research inquiries will be used in this research:
What are the chief grounds or factors that influence non-Muslim clients sponsoring Islamic banking ‘s merchandises or services in Kota Kinabalu?
What is the cognition and apprehension that influence non-Muslim clients ‘ degree of credence towards this merchandises or services of Islamic banking?
What is the degree of satisfaction towards the Islamic banking ‘s merchandises or services among non-Muslim clients in Kota Kinabalu?
2.5 Significance of Study
This survey is utile to several parties including general populace ( consumers ) , commercial Bankss and fiscal establishments, the authorities and its bureaus, research workers and UiTM every bit good as the author because of the undermentioned grounds:
To increase the figure of non-Muslim clients and general public sponsoring the Islamic banking ‘s merchandises and services in Kota Kinabalu.
The information gathered in this survey are utile to many parties particularly commercial Bankss and fiscal establishments for their selling schemes and publicity for the Islamic banking system is good accepted by both Muslim and non-Muslim clients in Sabah, peculiarly Kota Kinabalu.
It makes the bankers ‘ occupation easier if all clients have changed their behaviour and attitude towards their banking wonts.
This survey would besides give good experience to the research worker on how to form and develop an educational research undertaking. The survey would besides assist the research worker to acquire existent exposure when covering with assorted homo ‘s behaviours and attitudes.
This survey is really utile for future mentions for interested pupils particularly for UiTM pupils or research workers who wish to major or specialise in Islamic banking.
2.6 Restrictions of the survey
2.6.1 Confidential of Data
Uncovering confidential information is one of the chief restrictions of the survey. The research worker foresees or expects that some of the mark respondents may non uncover some of the confidential information or information required by research worker. It is no uncertainty that this will non give a existent image of the survey if the information provided by the respondents is dubious.
2.6.2 Data Collection
Another restriction is the truth of roll uping the primary informations that will be collected through interview utilizing pre-prepared questionnaire. It is really of import that the information given by the respondents are accurate. This is where the populaces or client ‘s cooperation and feedback are really of import to carry through the aim of this research.
2.6.3 Answering Committedness
To acquire a better committedness or cooperation from the respondents is another restriction as a batch of the people do non wish to be interviewed particularly if it does non function to their involvements. Respondents ‘ committedness on giving feedback or information in this survey is one of the restrictions that will be faced by the research worker. It is hoped that those respondents who are selected will give their full cooperation. The research worker wants to roll up information every bit accurate as possible since the survey is utile to many parties.
3.1 Customer Satisfaction
Harmonizing to Kotler ( 2000 ) , satisfaction can be defined as a individual ‘s feelings of satisfaction or displeasure which ensuing from measuring a merchandise ‘s sensed public presentation or result in matching to his or her outlooks. Meanwhile Ekinci and Sigala ( 2004 ) stated that satisfaction or dissatisfaction with a plan or installations is influenced by anterior outlooks sing the degree of quality. In some instances information or disinformation lays the land for the outlooks of quality. A negative perceptual experience of quality and satisfaction is generated if what is relayed or communicated to the client does non fit the outlook or experience ( Solomon, 1996 ) . Overall, satisfaction with a service merchandise can be of a individual constituent of service, or of the experience on a figure of constituents that make up the entire experience.
As has been pointed out ( Szymanski & A ; Hise, 2000 ; Zeithaml et al. , 2002 ) , client satisfaction can be significantly foreseen by the sensed quality of convenience, merchandise information, security, and dependability or fulfilment. Customers will find whether they are having just intervention based on their ain service experiences and expectancy ( Oliver, 1999 ) . A service house needs to carry through three client outlooks such as merchandise quality, service quality and monetary value value with the purpose to fulfill clients.
3.2 Service quality and client satisfaction
Service quality is the key to mensurate user satisfaction ( Pitt et al. , 1995 ) . Relationship between service quality and client satisfaction has been extensively studied by research workers ( Sureshchandar, Rajendran & A ; Anantharaman, 2002 ; Jones & A ; Suh, 2000 ; McDougall & A ; Levesque, 2000 ) . Ghobadian, Speller and Jones ( 1997 ) concluded that companies with higher sensed quality goods and services will bask higher long term economic benefits. The correlativity between the quality of goods and services and client satisfaction, has led organisations to continuously upgrade their quality and mensurate their clients ‘ satisfaction. In order to accomplish client satisfaction, administrations must be able to fulfill their clients ‘ demands and wants ( La Barbera & A ; Mazursky, 1983 ) .Satisfaction measuring, nevertheless, is a hard undertaking to accomplish as client satisfaction is similar to attitude ( Attiyaman, 1997 ) . Quality excessively, harmonizing to Sureshchandar et Al. ( 2002 ) is a signifier of attitude.
Cronin, Brady and Hult, ( 2000 ) found that sensed service quality and client satisfaction was the most of import research subjects in services selling literature. In order to convey high quality service and satisfy clients, the service sellers are persistently seeking to better the efficient service schemes. Internet banking or selling is one of the progressively of import electronic banking or selling tools for heightening appeal, presenting services and put to deathing minutess ( Sohn & A ; Tadisina, 2008 ; Song & A ; Zinkhan, 2008 ) .
In relation to web sites, E-service is defined as a web site installations efficient and effectual shopping, buying and delivering of merchandises and services ( Zeithaml, Parasuraman and Malhotra, 2002 ) . Customers ‘ appraisals of website quality and e-services quality include their experience of interacting with the web site every bit good as post-interaction service facets, that encompass nucleus service quality for illustration, efficiency, fulfilment, system handiness, privateness and e-recovery service quality for illustration, reactivity, compensation, and contact ( Parasuraman and Grewal, 2000 ) . Website design, dependability and privateness or security has besides been identified as elements of service quality in banking industry ( Keating, Rugimbana, and Quazi, 2003 ) .
Harmonizing to Lam, et. Al. , ( 2004 ) , in a service direction context, client satisfaction is the consequence from client ‘s perceptual experiences of value which was received from the service supplier ‘s dealing or relationship. Their consciousness of the singular value which they have received from the client ‘s overall feeling derived from that value are closely related to the consumers ‘ perceptual experiences of good service.
However, one of the critical constituents of any organisation ‘s schemes is client satisfaction as the client is the ultimate beginning of income for any industry, including the banking industry. The bankers pay attending towards its client satisfaction in relation to the client satisfaction due to the stiff competition in the banking industry. Some Bankss besides consider that the it is the chief constituent of their selling scheme. Every fiscal establishment is seeking to increase the client satisfaction keeping by bettering the quality of the merchandises and services they offered to their clients.
3.3 Selection Criteria of Islamic Banking
The first choice standard is convenience. Haron et al. , ( 1994 ) found that the factors of convenience includes convenient working hours of ATMs, convenient subdivision locations and broad subdivision web convenience, location being close place or work. A primary motive for clients in choosing a specific establishment was the convenience of a bank ( Kaynak and Whiteley, 1999 ) . In recent study on 250 fledglings to a community in the United States of America, ( Riggall, 1980 ) found that convenience of location to both place and work appeared to be the most influential factor for bank choice by fledglings.
Second, cost and benefit. Khazeh and Decker ( 1992 ) identified that one of the top five determiners factors that influenced the banking determination among 1198 of concern school alumnas of Salisbury province university in Maryland is involvement rates. Gerrad and Cunningham ( 1997 ) besides found that the ground for people keeping their relationship with Islamic Bankss is involvement rate or net income. Haron and Noraffifah ( 2000 ) observed that Islamic Bankss in Sudan supplied a majority of financess to their current history holders through these installations in visible radiation of the Islamic rules.
Third is the influence by friends and relations. In recent surveies of ( Wangenheim and Bayon, 2004 ; Grace and O’Cass, 2003 ) it has been discussed that the importance of recommendations or word-of-mouth in the formation of attitudes in a service purchase determination doing context particularly in professional services ( Razzouk et al. , 2004 ; Ettenson and Turner, 1997 ) . Zainuddin et Al. ( 2004 ) in his survey of Malaysian bank clients ( to exemplify the different perceptual experiences of users and non-users of Islamic banking services ) found out that partners, friends and relations every bit good as their innate spiritual motive affect the decision-making procedures of Islamic bank ‘s users.
Fourthly is aggregate media advertisement. Ors ( 2003 ) found that advertisement played a important function in banking and positively affected the profitableness. It was apparent that there were size advantages for advertisement in banking. As Sudin et Al. ( 1994 ) pointed out that although mass media advertisement was less of import for a client as the bank choice factor, commercial Bankss were still willing to put a big sum of money for advertisement for greater fight despite the uncertainnesss of its return.
Fifthly is faith. Kirkpatrick ( 2005 ) defines faith as psychological fond regard, a powerful emotional relationship to things. Omer ( 1992 ) indicates that spiritual ground is the primary variable that influences the volume of sedimentations of Muslims in UK in Islamic fiscal establishment. He besides reports that the more their spiritual devotedness, the more their disposition for Islamic over conventional finance. While, harmonizing to the old research, Haron et Al. ( 1994 ) argued that non more than half of the respondent assumed that faith was a major ground for utilizing Islamic banking services. However, Gerrard and Cunningham ( 1997 ) found that there is no difference between Muslims and non-Muslims on bank choice standards.
Sixthly, size and repute. Bank size, repute and dependability were the important factors to derive clients ‘ assurance ( Tyler and Stanley, 1999 ) . However Javalgi et Al. ( 1989 ) argued that the one of the chief standards could be the repute. Kennington et Al. ( 1996 ) back up the consequence whereby he besides concluded that the bank ‘s repute was the most important factor. Erol and El-Bdour ( 1989 ) revealed that one of the most of import factors on the choice of the bank whether Islamic or conventional is the client perceived bank ‘s repute. Sudin et Al. ( 1994 ) argued that the repute and image of the bank was ranked the 3rd among non-Muslims respondents.
Seventhly is service bringing. As has been pointed out ( Lamsali et al. , 2005 ) , it is basically of import to understand the importance of the service quality elements and that understanding on which dimensions of service quality that significantly influence client satisfaction. However, Choi and Valikangas ( 2001 ) argue that client service quality can non make sustainable value unless incorporated with more advanced and advanced schemes.
The last choice standard is staff factor. Anderson and Cox ( 1976 ) identified that friendliness of staff was one of the five most of import bank choice standards. Many clients are neither able to understand nor confident in utilizing self-service machines ( Chaoprasert and Elsey, 2004 ) .
RESEARCH METHODOLOGY AND DESIGN
4.1 Data Collection Technique
4.1.1 Primary Data
The aggregation of primary informations is relevant to the aims of the research and the informations will be carried out by utilizing of prepared questionnaires.
4.1.2 Secondary Data
External informations can be obtained externally such as magazine, cyberspace, diaries, text books and newspapers.
The study instrument that will be used in the survey is in signifier of questionnaires. The inquiries are structured in order to accomplish better apprehension of the respondents as consumers. They consisted of multiple picks dichotomous and respondents merely need to reply the inquiries by choosing the most likely/correct replies. Likert ‘s graduated table of 1 to 5 besides will be used.
4.1.4 Sampling Design
A simple random trying technique was used in this research ; the sample size of 200 samples will be taken. It is a signifier of trying in which all elements in the population are considered and each component has an equal opportunity of being chosen as the topics.
4.1.5 Target Population
For this survey, the sampling frame will be the non-Muslims clients sing the selected Bankss in Kota Kinabalu metropolis which are the two taking fully fledged Muslim Bankss in Malaysia, viz. Bank Islam Malaysia Berhad ( BIMB ) and Bank Muamalat Malaysia Berhad ( BMMB ) .
4.1.6 Operational Definitions
Likert ‘s graduated table of 1 to 5 will be used in some inquiries as to rush up in replying the inquiries. For case, 1= Strongly Agree/Very Satisfy, 2= Agree/satisfy, 3= carnival, 4= non Agree/satisfy and 5= Strongly non agree/not really satisfy.
The direction is clearly shown in the relevant inquiry where the respondents will hold to adhere the direction. The research worker will besides explicate to the respondents before they start replying the inquiries.
The study instrument used for this survey is a set of structured questionnaires. The inquiries are structured in order to accomplish better apprehension of the respondents/customers. They consisted of multiple picks dichotomous and the respondents merely need to reply the inquiries by choosing the most likely/correct replies.
4.1.8 Data Analysis Technique
Based on the information collected, the research worker will explicate the decision and recommendations of the survey. Another of import measure in this survey is analysis of informations and discussion/interpretation of informations that have been collected. The information analysis the techniques will be used are: –
4.1.9 Cross Tabulation
Cross tabular matter will be made by utilizing the information collected.
4.1.10 Frequency Analysis.
The analysis of informations will be utilizing SPSS programme done manually.
5.2 Research Design
For the intent of this survey, the sampling technique used will be chance trying based on simple random sampling. A sampling random sample is a subset of persons ( a sample ) chosen from big set of a population. Each person of non-Muslims is chosen indiscriminately and such person has the same chance of being chosen at any phase during the sampling procedure.
Methodology is a method where the research worker obtains the relevant information of primary and secondary informations. The aggregation informations and trying design is described below.
5.3 Presentation of the research
Chapter One defines and explains Islamic banking industry, its merchandise and services and research background. Chapter Two reviews the job statement, aims, inquiries, every bit good as the significance and the restriction of the research. Chapter Three reviews the literature reappraisal which related to this survey.