The Moderating Effect of Religious Beliefs on the Factors Affecting Adoption of IFB in Ethiopia: Evidence from Selected Private Commercial Banks
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Date
2023-06-14
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AAU
Abstract
The main objective of this study was to examine the moderating effect of religious beliefs on the factors
affecting the adoption of Interest-Free Banking (IFB) in selected private banks in Ethiopia: Bank of
Abyssinia, Oromia Bank, and Zamzam Bank. The study followed an explanatory research design and
utilized a quantitative approach. The population consisted of customers of IFB, experts involved in
policy-making, individuals providing support to the business, consultants, and members of the Sharia’h
advisory committee in the country. Purposive sampling was used to select samples from each bank,
resulting in a sample size of 210 participants. A close-ended questionnaire with a five-point Likert scale
was employed to collect data, and both descriptive and inferential statistics were used for analysis. The
findings of the study indicated that Sharia’h compliance, customers' awareness of IFB products and
services, perceived relative advantage, and networking exhibited a positive and strong relationship with
the adoption of IFB. However, the accessibility of IFB services showed a negative relationship with the
adoption of IFB. The moderating variable was found moderate the relationship between Sharia’h
compliance and accessibility of IFB services, but it did not moderate the relationships between
networking, customers' awareness, and perceived relative advantage with the adoption of IFB. Based on
the results, the researcher recommends that the respective banks focus on improving the accessibility and
convenience of IFB services while maintaining Sharia’h compliance to achieve their organizational and
financial goal despite having religious components. Additionally, it is suggested that future research
should include a larger number of respondents and encompass a broader range of banks adopting IFB
across all generations. In conclusion, this study provides insights into the moderating effect of religious
beliefs on the adoption of IFB in selected private banks in Ethiopia. The findings contribute to the
understanding of the factors influencing the adoption of IFB and offer practical recommendations for
banks to enhance their IFB services
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Keywords
IFB, dependent and independent variables, moderating variables