Customer satisfaction with Ijarah financing

This paper aims to explore the practices of Ijarah financing by Islamic banks in Pakistan pertaining to compliance with the AAOIFI Shariah Standard (9) on Ijarah financing. Primary data were gathered from the respondents of the five (5) full-fledged Islamic banks in Pakistan by administering semi-structured face-to-face interviews along with secondary data obtained from the contractual agreements on Ijarah financing. Qualitative content analysis was undertaken by employing NVivo software. The findings reveal discrepancies in the practices of Ijarah financing pertaining to two clauses of the AAOIFI Shariah Standard and emerging major challenges and/or problems facing the Islamic banking industry, including (1) a lack of standardization, (2) an insufficient regulatory and supervisory framework, and (3) a dearth of awareness of the Islamic banking products and/or takaful operations (especially among corporate customers). The study accrues both academic and practical implications. It not only adds value to the existing literature on Islamic finance but also serves as a guide for the Islamic banking industry in Pakistan. The study is useful to harmonize and standardize the practices of Ijarah financing by the contemporary Islamic banks in Pakistan as the Islamic Banking Division (IBD) of the State Bank of Pakistan (SBP) made it compulsory for Islamic banks to adopt AAOIFI Shariah Standard No. (9) on Ijarah financing.

PurposeOwing to religious and economic preferences in Muslim-dominated countries, middle-income customers are at the heart of banks’ strategic targeting. This study aims to investigate selected middle-income Islamic bank customers from Sylhet, one of Bangladesh’s top religious and cultural cities, to examine their perceptions of the Islamic banking services.Design/methodology/approachThis study forwards three determinants of overall satisfaction. These are perceived relative advantage (PRA), perceived risk management (PRM) and perceived customer engagement (PCE). The study has used structured questionnaire and collected complete data on 300 middle-income Islamic bank users. The data was analysed using exploratory factor analysis (EFA), confirmatory factor analysis (CFA) and structural equation modelling (SEM).FindingsWhile all the three selection factors significantly influence overall satisfaction, PCE has greater positive impact on overall customer satisfaction, followed by PRA and PRM. “Convenient location”, “competitive charges” and “return on deposit despite low earnings” are the top three instruments measuring “PCE”. Religion did not qualify as a standalone selection factor. The results are robust across tests conducted by using EFA, CFA and SEM.Practical implicationsGross purchasing power of middle-income class in Bangladesh grew from 7% to over 30% during the past decade, and the purchasing power of this class stood at US$100bn. Having a greater portion of this population as Muslims, banks can design products and marketing campaigns by using the three selection criteria that offer a combination of faith and non-faith-based variables.Originality/valueSimilar studies on the middle-income customer group have been rare, especially from the Islamic banking perspective. These findings offer a concise list of three factors for the bank managers to build their strategies. With respect to the Vision 2021, these findings carry greater socio-economic significance given the transition of Bangladesh to a middle-income country.

This study investigates customer perceptions of e-commerce marketing tactics in North Karnataka, employing a mixed-method approach that integrates secondary and primary data. Secondary data were sourced from Scopus-indexed journals, providing theoretical background, while primary data were collected via self-administered questionnaires from 150 randomly selected respondents across North Karnataka. Various measurement instruments were used to capture customer perceptions, attitudes, and satisfaction levels, including nominal, ordinal, and scale data. The collected data underwent coding and cleaning processes to ensure accuracy and consistency, followed by statistical analysis using descriptive statistics and automated linear regression methods. Descriptive statistics summarized demographic characteristics and responses to Likert scale items, while regression analysis identified significant predictors of customer satisfaction. The findings revealed that social media marketing, website user experience, product reviews, and ratings positively correlate with customer satisfaction. Conversely, email marketing influence and usefulness showed a negative correlation with satisfaction. The model achieved an accuracy rate of 54.2%, highlighting the complex dynamics between e-commerce marketing tactics and customer satisfaction. This study underscores the importance of tailoring e-commerce marketing strategies to enhance customer satisfaction in the North Karnataka region.

Indonesia’s rapidly growing beauty industry has intensified competition among aesthetic clinics, making superior customer satisfaction a critical strategy for competitive advantage. This study examines: (1) the effect of interpersonal communication on customer satisfaction at Hers Aesthetic Clinic; (2) the role of service quality in shaping customer satisfaction at the clinic; and (3) the combined impact of interpersonal communication and service quality on customer satisfaction. The population included all clients who received treatment at Hers Aesthetic Clinic, totaling 3,110 individuals. Sample size was determined using the Slovin formula with a 10% margin of error and 99.6% confidence level, yielding 100 respondents. Purposive sampling was used, with respondents selected based on criteria: (1) registered customers of Hers Aesthetic Clinic; (2) individuals who purchased skincare products and received treatment services; and (3) customers with repeat purchase or treatment experience. Results confirm that interpersonal communication is a positive and significant predictor of customer satisfaction at Hers Aesthetic Clinic (p < 0.001). Service quality also emerges as a significant positive predictor of customer satisfaction (p = 0.001). When tested together, both predictors demonstrate a strong and significant combined effect on customer satisfaction, reflected in the F-statistic (F = 140.237; p < 0.001). The coefficient of determination (R² = 0.743) indicates that 74.3% of variance in customer satisfaction is explained by interpersonal communication and service quality, while the remaining 25.7% is attributed to other factors not included in this study.

Ijarah (lease contract) is one of the essential financing contracts offered by Islamic banking institutions to meet the demand of the clients. This study investigates the impact of Ijarah financing on Islamic bank performance in Malaysia for the period from 2004-2018 using Fixed and Random Effect Models. Ijarah financing (IJFA) which becomes the focus variable of this study with other six independent variables; operating efficiency (EXTA), bank size (LTA), total financing (TFTA), base rate (BR), consumer price index (CPI) and gross domestic product (GDP) were regressed against return on asset (ROA) and net profit margin (NPM). The results show that Ijarah financing has a positive and significant impact on NPM. The findings suggest that Islamic banks should increase their portfolio of Ijarah financing and this is also support the concentration strategy used by banks in improving Islamic bank performances. An increase in demand for Ijarah financing will increase Islamic banks performance and this reflects that Ijarah financing as an asset creation tool that banks prefer particularly for generating income.

This study aims to build a model of consumer preference in choosing Islamic banking. This study uses a comparative study between people's understanding of Islamic banking and conventional banking which is influenced by several factors. The sample in this study amounted to 200 people who had different backgrounds. Existing data were analyzed using Structural equation models (SEM). The research results show that there is a level of understanding and preference of the community towards different Islamic banking which is influenced by several factors developed in this research model. In the next research, it is expected to conduct an assessment of the decision to choose Islamic and conventional banking products that concentrate more on specific products in Islamic banking. In addition, further research is expected to take into account environmental factors and government policies as well as other factors that have not been studied in this study so that it is expected to enrich the knowledge in the field of management, especially consumer preferences and decision making using Islamic banking products

This paper aims to explore whether the practices of Ijarah financing by Islamic banks in Malaysia are in line with the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) Shariah Standard No: (9) on Ijarah financing. Semi- structured interviews based on open-ended questionnaires were conducted, recorded verbatim, and transcribed for content analysis. Our study revealed flaws in the contemporary practice of Ijarah financing and indicated that it was slightly out of line with the AAOIFI Shariah standard. The study will not only help the Islamic banking industry of Malaysia to reduce, if not eliminate the gap between the practices of Bank Negara Malaysia (BNM) and AAOIFI Shariah standards pertaining to Ijarah financing but also create novel literature due to the fact that, no study has been undertaken to date, which analyzes the practices of Ijarah financing by Malaysian Islamic banks in the light of the AAOIFI Shariah standards.

PurposeBrand personality plays an important role in affecting customer satisfaction. The Muslim population is estimated to reach 30% of the world’s population, and it is considered as the fastest-growing religion in the world. To tap into this market, it is important to explore various aspects of business, in general, and marketing, in particular, from the perspective of Muslim consumers. The present research also attempts to do the same by proposing a conceptual model related to the brand personality of Islamic Banks, named, Islamic Banks’ Brand Personality (IBBP) and its impact on customer satisfaction.Design/methodology/approachThis paper analyses the causal relationship that exists between the variables related to Islamic brand personality and customer satisfaction. For this purpose, data was collected quantitatively from 337 customers of different Islamic banks, through a self-administered questionnaire. The data analysis was conducted using SPSS and AMOS software. Factor analysis was performed to extract and decide on the number of factors underlying the measured variables of interest. Structural equation modelling was then used to examine the variables and the fitness of the proposed model.FindingsThe result revealed that five out of the total six hypotheses were supported. In this case, trustworthiness and Shariah compliance resulted in the strongest impact on customer satisfaction followed by sincerity and justice.Practical implicationsThe positive significant impact of trustworthiness and Shariah compliance on customer satisfaction attests to the importance of these variables in the development of a strong brand personality in the context of Islamic banks. Policymakers of the financial industry in general and the Islamic financial service industry, in particular, may benefit from the findings of this study.Originality/valueThere is a dearth of research conducted on investigating the impact of brand personality-related variables on the Islamic banking sector. The present research did not only develop variables of IBBP but also empirically tested their effect on customer satisfaction. This paper, therefore, offers invaluable insight into IBBP with its impact on customer satisfaction.

Purpose This paper aims to analyze the impact of Sharī‘ah compliance perception on customer satisfaction in Islamic banking sector of Pakistan. Design/methodology/approach Primary data were collected from 242 account holders of Islamic banks and Islamic banking branches of conventional commercial banks and analyzed by correlation and regression through self-administered questionnaires based on SERVQUAL model. Findings Significant moderating effects of Sharī‘ah compliance perception on the relation between service quality and customer satisfaction have been identified. Research limitations/implications As a cross-sectional study with convenience sampling restricts generalizability and because financial benefits offered by banks were not included as a variable, the scope of this study is limited to service quality only. Future research may focus on the moderating effect of Sharī‘ah compliance perception through longitudinal study with larger sample size in a multi-cultural environment. Practical implications Results of this paper recommend Islamic banks to focus on their core strength “Sharī‘ah compliance” while developing their product/service and building marketing strategies. Moreover, assurance of high-quality services will sustain such strategies against competition with conventional banks. Social implications Islamic banks must primarily develop their brand through extensive communication and public awareness programs regarding Sharī‘ah compliance standards in terms of products/services, policy/procedures, code of conduct and Sharī‘ah board. Originality/value This research examines moderating role of Sharī‘ah compliance perception between service quality and customer satisfaction in Islamic banking sector of an Islamic Republic with dual banking system. This interactive effect of Sharī‘ah compliance perception has not been found as an overriding theme in any of the main stream journals/articles. Therefore, this study fills this gap.

Customer satisfaction is critically important for banks to stay competitive as the customer is the ultimate source of income for any organization. Islamic banking system and conventional banking system are considered as rival systems working in the same banking industry. In order for Islamic banks to compete successfully with conventional banks, Islamic banks must give extremely high consideration to their primary customers. Whenever either Islamic banks or conventional banks offer any product or service, its success depends upon the customer satisfaction towards that product or service. This study examines the level of customer satisfaction on Islamic banks as well as conventional banks in Malaysia. It also investigates the relationship between different demographic variables and the satisfaction of customers. A sample of 1,153 respondents from various cities representing different states in Malaysia was selected. The results in this study suggest that customers are mostly satisfied with the quality of services which include competency, friendliness, and efficiency of the staff of the Islamic and conventional banks.

Background: This paper examine the role that social responsibility can play in advancing orthodontic clinics’ management. Social responsibility is a valuable potential area of strategic development that causes consumer’s positive perception toward service providers. Objectives: The study also sought to determine the role of social responsibility and trust in strengthening of customer satisfaction. Lack of previous studies caused researcher to analyze the effect of corporate social responsibility on customer trust and satisfaction toward orthodontic clinics in this way. Materials and Methods: The cause and effect relationship between tree variables were analyzed including social responsibility, trust, customer satisfaction. Having 4 hypotheses. To test the hypotheses the personal questionnaire was used and data from 405 individuals who were the clients of orthodontic clinic in Iran, were collected. Using randomly sampling method and analyzed by statistical instruments. The descriptive statistics was performed using SPSS software and referential statistics was conducted using exploratory and confirmatory factor analysis and structural equation models was done using AMOS software. Results: Results showed that the positive and significant relationship between social responsibility trust, and also relationship between customer satisfaction and trust were supported. The relationship between corporate social responsibility and customer satisfaction was rejected. Nevertheless, the indirect effect of social responsibility on customer satisfaction was approved. Conclusions: The results also support that customer trust is the most important attribute in the context of services. In the other word it is trust of clients that lead to client satisfaction.

Islamic banking has been started function in 1970s. The speed of the growth of Islamic banking all over the world including Pakistan has been expedited since 2002. The objective of this study is to explained/find the phenomenon that conventional banking, which has been operating for the last three centuries have started tumbling steeply in the last few decades while Islamic banking has been extend their function all over the world specially in Muslim countries with quickly. This study shows the customer satisfaction level of both Islamic and conventional Banking in Pakistan. The population of this study is consists of customer of Islamic banking and conventional banking in Pakistan. Three Islamic banks i.e., Bank of Khyber, Almeezan bank and Albaraka bank and three conventional banks i.e. Habib bank limited, united bank limited and Allied bank limited were selected for this study. And 100 questionnaires were distributed among employees of these banks. Islamic banks are getting popularity due to interest free products, risk sharing activities and strong ties with the religion. Islamic banks work as welfare organization to promote trade and economic activities in line with the instructions of Islam to provide a number of Interest-free products and service. The existence of Islamic and conventional banks in Pakistan created stiff competition among banks to attract and retain greater number of customers by the provision of quality services. This study examined the relationship among service quality, customer satisfaction and bank performance by comparing Islamic and conventional banks operating in Pakistan.

PurposeBank customers’ perceptions of service quality and service image of Islamic banks may differ from those of conventional banks. The purpose of this paper is to examine the differing perceptions of customers of Islamic and conventional banking systems in an emerging market, which has rarely been addressed and adds to the body of knowledge on this topic. This study also re-examines the SERVQUAL model of customer banking services to measure their impact on customer satisfaction and loyalty.Design/methodology/approachThe study uses responses from a randomly drawn sample of 229 customers from conventional banks and 225 customers from Islamic banks operating in Bangladesh using a structured questionnaire. SPSS and structural equation modeling techniques were employed as statistical tools for data analysis.FindingsOverall, the examined service quality dimensions wield varying effects on client satisfaction mediated through the perceived image of banking services. Islamic bank customers’ perceptions of the level of reliability, responsiveness, security and reputation were significantly higher than those of conventional banks.Research limitations/implicationsThis study enhances our understanding of how Islamic banking practices differ from those of conventional banking in terms of service quality and image-related factors. More specifically, the findings of this research explain consumers’ perceived assessment of satisfaction and loyalty in a comparative research setting.Originality/valueNo prior studies have addressed the impact of the individual service quality dimensions on image factors in the context of conventional and Islamic banking in an emerging market, Bangladesh.

This study examines the impact of digitalization on customer satisfaction in Islamic banking in Ethiopia, focusing on central and eastern regions. A sample of 400 participants was surveyed, with 361 valid responses, using a five-point Likert scale. Data analysis, including explanatory factor analysis and regression, was conducted using SPSS 25 and Amos 23. The results indicate that compliance, reliability, service quality, and human skills significantly and positively influence customer satisfaction with digital Islamic banking. The study's limitations include its focus on a single country, which may limit generalizability to other contexts. Future research could explore cross-cultural differences, longitudinal studies, and qualitative methods to gain deeper insights into customer satisfaction in Islamic banking, especially about technology and global crises like cybersecurity concerns, pandemics, and economic instability. The study suggests that Ethiopian Islamic banks can enhance trust and satisfaction by prioritizing Sharia compliance, investing in staff training, transparent communication, and reliable technology. Customers should support institutions that align with their religious values, fostering long-term relationships. This research addresses a critical gap in understanding customer satisfaction with digital banking services, particularly in global crises such as cybersecurity issues, pandemics, and economic instability. It focuses on how customers of full-fledged Islamic banks perceive and evaluate digital services, the impact of cybersecurity on trust and satisfaction, and the influence of cultural and religious values. Moreover, to the researchers' best knowledge, it is the first study in the country to examine this topic in Islamic banks.

Research aims: This study aims to compare the financial performance of Islamic commercial banks in Indonesia and Malaysia using the Sharia Conformity and Profitability (SCnP) framework, focusing on their alignment with sharia principles and profitability levels. Design/Methodology/Approach: A quantitative descriptive method was used, with secondary data obtained from Islamic bank financial reports and official sources such as OJK, IFSB, and PSIFIs. The SCnP model served as the primary analytical tool, and all Islamic commercial banks in both countries were included using saturated sampling. Research findings: Islamic banks in Indonesia showed fluctuating yet improving financial performance, particularly in profitability, reaching optimal position in 2024. However, challenges remain in maintaining consistent sharia compliance. Malaysian Islamic banks, meanwhile, consistently occupied the upper-left quadrant (ULQ), indicating strong profitability but limited use of profit-sharing instruments. Theoretical Contribution/Originality: This study contributes to the literature by applying the SCnP model in a cross-country comparison, highlighting the influence of regulatory systems and governance on Islamic banking performance. Practitioners/Policy Implications: Findings suggest that Indonesian banks should improve governance and investment screening, while Malaysian banks may benefit from enhancing the adoption of profit-sharing contracts to align more closely with Islamic ethical objectives. Research Limitations/Implications:The study is limited to quantitative data and excludes qualitative aspects such as governance and customer perception. Future research is encouraged to integrate these dimensions for a more comprehensive evaluation.