Religion is Customer’s Motive: Empirical Evidence from Islamic Banking Industry of Pakistan

Abstract: The Islamic banking is one of the fastest growing industries in the world. Same is the case in Pakistan. Many studies conducted in the context of different countries concluded that it is only the faith related factors which drive customers to invest or use the services of Islamic banks to cater their financial and banking needs. The main objective of this study is to determine empirically eihter it is only faith factor which influences customer or there are other factors behind the customer’s decision to use the Isalmic banking sercive in Pakistan. The data was collected on faith related factors and economic factors (service quality, economic returns, perceived financial strength) through survey questionnaires distributed among the 500 customers of five Islamic Banks, and 16 conventional banks operating in Pakistan. Out of which four hundred responses were found valid. Statistical tests were run to infer the results based on five hypotheses. The result of this study concludes that, along with the faith factors, the economic factors like service quality and econimc returns are significantly important behind the customer’s intention to use the services of Islamic banking in Pakistan.