The Impacts of Sharia Bank Customers’ Awareness and Attitudes towards Islamic Working Capital Financing Use in Indonesia

Abstract

The high Gini Index of Indonesia indicates that the economic growth is not accompanied by equal income-distribution. This study aimed to determine the awareness and attitudes of the Muslim consumers of sharia banks in Indonesia towards sharia banking practice and sharia working capital financing. The conceptual framework of this study was developed based on AIDA’s hierarchy of effects model and the theory of planned behavior. Structural equation modelling processed with LISREL software was applied to analyze the structural relationships of four latent variables. The primary data collection was performed through self-administered questionnaire with 125 Muslim consumers of sharia banks in Indonesia who own business. The main result suggests that to increase the market share of sharia banking in Indonesia, and eventually to reduce poverty rate and income inequality, is to increase the awareness and attitudes of the consumers towards sharia banking practice and sharia working capital financing. The initiative should begin with simultaneous paradigm shift from all parties involving the Muslim community, sharia banking, and government. The required paradigm shift refers to making sharia banking as the way of life of Muslims by practicing sharia law-based financial activities, and not as a substitute of conventional banking.