Title: Econometric analysis of factors affecting adoption of Islamic Banking in Khyber-Pakhtunkhwa, Pakistan
Authors: Sana, Safina, Dr. Sajad Ali
Volume: 9
Issue: 1
Pages: 323-330
Publication Date: 2025/01/28
Abstract:
Almost 43 years ago, in 1980, the State Bank of Pakistan (SBP) restructured banking regulations and ordinances to introduce the Islamic banking system in Pakistan. However, the market share of Islamic banking (IB) appeared to remain relatively small. Investigating the elements influencing people's inclinations to use Islamic banking is, thus the primary goal of this paper. Based on primary data collected by self-administered questionnaires involving a sample of 150 respondents located in Peshawar City. The study's findings show that the degree of religious devotion, consumer knowledge of Islamic finance, Islamic banking networking, and perceived compatibility all influence the adoption of Islamic banking. However, it is worth noting that perceived compatibility does not have a significant effect on the adoption of IB. The findings of the study would be valuable for the Islamic banking industry in understanding consumer attitudes and preferences toward IB and strategically marketing it, as well as for the relevant authorities in advocating for particular policies and regulations that enhance IB's market share.