Sometimes, as a practitioner, we wonder what motivates a person to subscribe to Islamic Banking products. Is it really based on the attractive features of a product, trying out something new, or is there an ingrained desire to subscribe to a Sharia compliant product? I know many non-Muslims subscribe to Islamic Banking products based on the intrinsic benefits afforded by the products, such as a more fairer penalty terms, transparent fees and charges, and flexibility in settling the accounts early.

But what of Muslims? How can we understand the triggers that encourage a Muslim to subscribe to a Sharia-compliant product?

I came across this writing by Dr Hanudin Amin which mentions a term that I hardly hear in the industry; Religiosity. It refers to the conceptual level of a person’s “piousness” to be marked into different levels (index), and he aptly split it into 3 general categories i.e. 1) Pious Religious, 2) Moderately Religious, and 3) Off-Hand Religious. His paper suggests that the Pious Religious group tends to accept Islamic Banking products more compared to other groups (in his study it’s focused on Home Financing-i). It also proposes that perhaps it is worthwhile to consider packaging Islamic Banking products based on the different levels of “Religiosity” to better appeal to them. This may indeed widen the scope for acceptance as products may be perceived differently by different people, although essentially it is the same product.

To read a bit more on the study, do have a read on the research below.


By Dr Hanudin Amin*

Excerpt :Earlier muslim scholars have supported the finding that a consumer’s religiosity has a significant effect on consumption in a muslim context (e.g. Elgari, 1990). Someone who approaches an Islamic bank for a mortgage is endowed with a certain level of iman. Bendjilali (1995) believes that choosing interest-free financing is blessed by Allah (SWT), hence it is rewarded. Bendjilali (1995) points out that:  “A muslim consumer who approaches the Islamic bank to get a loan for a real transaction to be financed through murabaha mode is endowed with a certain level of iman. The degree of iman will indicate the degree of compliance to the Shariah”.

For full Article, click on this link.

Tell us what you think. Should Islamic Banking products designed to a specific level of religiosity or can the one-size-fits-all approach appeal to everybody? Comments appreciated.

*The author is an Associate Professor/Dean at the Labuan Faculty of International Finance, Universiti Malaysia Sabah, Labuan International Campus. He has a PhD from the International Islamic University Malaysia (IIUM) in Islamic Banking and Finance (PG310163). He can be contacted at


2 thoughts on “Religiosity

  1. Religiosity definitely is a factor, and the author is correct that it is different in western countries. 2 studies come to mind: “Pious Property: Islamic Mortgages in the United States,” by anthropologist Bill Maurer, who found that the most religious in the U.S. selected mortgages most resembling Riba, and the less religious sought out halal products. (Reminds me of religiously dressed women in a museum eating blatantly haram food, while immodestly dressed women were strict halal and said Bismillah before eating.) And the second study which has significance in OIC countries, “IMF Working Paper, Can Islamic Banking Increase Financial Inclusion?” by Sami Ben Naceur, Adolfo Barajas, and Alexander Massara. They found the main reason that Muslims didn’t use Islamic finance products was that they didn’t use any banking products–specifically, that 30% of the unbanked cited lack of sufficient funds. Only 5% cited religious reasons for not having a formal account.Voluntary Religious self-exclusion from banking was 34% in Afghanistan, 26% in Iraq, and 23% in KSA. Interestingly, other Muslim nations have low levels of religious self exclusion: virtually 0% in Malaysia, 3% in Kuwait and UAE, and 4% in Sudan. They recommended that Islamic Banks change/improve current operating models to attract depositors and serve SMEs. If you can’t find this working paper, message me and I will scan and send to you.


    • Yes it is interesting that Banks are always busy competing on “benefits” and “features” of an Islamic product in comparison with a conventional product. Hardly any products are designed to address customer’s preference based on religiosity. Perhaps the banking model do not look at the level of piousness as a determining factor for a product, whereas that can actually be quantified and data-analysed to make an informed decision for launching a product.


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