INTERNATIONAL JOURNAL OF MULTIDISCIPLINARY RESEARCH AND ANALYSIS ISSN(print): 2643-9840, ISSN(online): 2643-9875 Volume 04 Issue
08 August
2021 DOI: 10.47191/ijmra/v4
-i8-06,
Impact Factor: 6.072 Page No
.- 1090-1101
The
Effect
of
Riba Avoidance
and
Product Knowledge on
the
Decision to Become a Customer of Islamic Banks Siti Musyahidah1, Ermawati Ermawati2, Nurdin Nurdin3 1,2,3 Faculty of Islamic Economic and Business, Universitas Islam Negeri (UIN) Datokarama Palu
ABSTRACT: The
objective
of this study is to find out
the impact of riba avoidance motivation and product knowledge towards decision to be Islamic banks customers. Previous studies found that Muslim societies chose Islamic banks because they are interest-free. However, other studies also found that most Islamic banks customers do not have sufficient knowledge about Islamic bank products. Using the quantitative method, this study surveyed the effect of riba avoidance and product knowledge towards intention becoming Islamic bank costumers. There were thirty respondents who were chosen accidentally. Questions were distributed manually to the Islamic banks' customers. Our study found that riba avoidance and product knowledge significantly affect the decision to become a customer of Islamic banks in Palu City. This is proven by the sig-F value of 0.000, which is smaller than Alpha 0.05. At the same time, partially, the motivation to riba avoidance and product knowledge has a significant effect on the decision to become a customer of Islamic banks. Our findings highlight that Islamic banks should focus on providing more free riba products to attract more Muslim customers. In addition, customers' knowledge of Islamic banks' products should also become the banks' focus for improvement. KEYWORDS: Riba avoidance, product knowledge, costumers, Islamic banking I. INTRODUCTION
A bank is a business entity that collects funds from the public in the form of deposits and distributes them to the public
(Welim & Erwin Rasjid, 2020). As in
Law no. 21 of 2008 concerning Islamic Banking
Chapter
1
, article
1
and paragraph 7 states that a
Sharia Bank is a Bank that
carries out
its business activities based on Sharia principles and by type consists of Sharia Commercial Banks and Sharia People
's
Financing Banks
. Prior to
the
enactment
of
Law no. 21 of 2008, has Law no. 7 of 1992 concerning Banking. However, the Act has not provided a sufficiently solid legal basis for the development of Islamic Banks because it has not explicitly stated the word Sharia principles in the Bank's business activities (Alam & Miah, 2021).
The development of Islamic banking in Indonesia has
been accompanied by
the
development of the Islamic finance industry. The development of the banks was initiated by the inspiration of the Indonesian people, who are predominantly Muslim, to have an alternative Islamic banking system. Islam prohibits the practice of muamalah, which contains and can lead to usury (Şimşek, Bayındır, & Ustaoğlu, 2017). A bank that does not use interest is established according to the basic principles of Islamic teachings. Most scholars think that bank interest is usury (Kamla & Alsoufi, 2015). Thus, a Bank is established that uses an operating system that does not incur interest on its customers or is commonly referred to as Banking
based on Sharia principles
(Islamic Banking).
Prior to the
promulgation
of the
Law on
Sharia Banking
which emphasized the prohibition of riba, in the Qur'an, many mentions were made of the prohibition of riba. For example, the Qur'an verses Al-Baqarah/2:275 says as follows: "Those who eat the Ribâ (Usury) will not rise from their graves except as one rise who Satan is beating into insanity. That is because they say: "Trading is only like usury; however, Allah has made trading lawful and forbidden usury." To whomsoever then the admonition has come from his Lord, then he desists (from usury), so what has already passed (usury he had taken before) is for him, and his affair belongs to Allah; and whoever returns (to usury), these are the inmates of the Fire; they shall abide in it forever." This verse emphasizes the difference between buying and selling transactions and riba. Furthermore, the verse shows that riba will destroy the welfare of a nation. Allah also commands that believing Muslims stay away from usury practices or the like because riba practices can lead to misery in both the world and the hereafter (Abbasi, Hollman, & Murrey, 1989). Islam prohibits the existence of riba, but in practice, the business activities, products, and services of Islamic banking, which are conceptually not based on interest, are poorly understood by the public (Fathonih, Anggadwita, & Ibraimi, 2019). In addition to the above case, some people have understood what a Sharia Bank is but are still unfamiliar with the products available to them, thus causing people to be reluctant to use the products offered but only interested in people who want to save by avoiding the element of riba. With the prohibition of riba by the Qur'an, a Muslim is imposed to make any transactions involving riba. Therefore, a Muslim feels compelled to do or leave something that might harm or benefit him from this motivation. Motivation comes from the Latin movere, which means "to move." Motivation is
a willingness to
expend
a high level of effort
in achieving
organizational goals conditioned by the ability of efforts to meet individual needs
(Urdan & Schoenfelder, 2006). Thus, the creation of motivation in a person to avoid riba will affect their behavior in making decisions (Bøgh Andersen & Serritzlew, 2012).
Consumer behavior is closely related to the decision-making process to use goods or services to satisfy needs
. The purchasing decision
is
the stage of selection made by consumers in making decisions in buying a product. Several factors behind customers in choosing Islamic banking come from the environment and from the customers themselves. One of the factors that influence customer preferences in using Islamic banking services is the motivation to avoid Riba, which is a factor that exists in a person who drives, directs behavior to meet certain goals (Echchabi & Nafiu Olaniyi, 2012). From the results of previous studies, the main factor for customers to maintain relationships with Islamic banks is their adherence to Sharia principles. The customer decides to keep the Islamic Bank with the issue of faith and belief in the prohibition of riba for Muslims. II. LITERATURE REVIEW A. Understanding the Concept of Riba In the language of usury means additional (ziyadah) or means to grow and enlarge (Kader & Mohamad, 2019). Riba (usury) is exaggerating the profits (wealth) of one of the parties in the sale and purchase transaction or the exchange of similar goods without providing compensation for the excess (riba fadl) (Munro, 2003), or payment of debts that must be repaid by the person who owes more than the amount. The loan in return for the past grace period (riba nasi'ah). Riba is also defined as an addition taken on the existence of a debt or receivable between two or more parties that have been agreed upon at the beginning of the agreement (HAMID, CRAIG, & CLARKE, 1993). In this case, Riba has the same meaning as interest according to the consensus of all Islamic jurists or fuqaha without exception. Some of the characteristics of Riba in loans include: positive, fixed, and fixed at the beginning; tied to the term and amount of the loan; the payment is guaranteed, regardless of the outcome or purpose of the loan; the existence of legal sanctions and collection (Nurdin Nurdin & Yusuf, 2020). It is clear that Islam forbids Riba and makes it a major sin. Allah SWT forbids usury to take a gradual method (step by step). Related to this, several Islamic arguments prohibit the Riba system. However, Allah SWT revealed the treatise on the prohibition of the practice of Riba using four stages. First, riba will not increase goodness in the sight of Allah SWT. Allah says, "And something Riba (additional) that you give so that it increases in human wealth, then Riba does not add to the side of Allah SWT. And what you give in the form of zakat which you mean to achieve the pleasure of Allah, then (who do so) it is those who multiply (rewards)." (Qor’an verse ar-Ruum: 39). Second, Allah SWT has described the punishment for the Jews who like to eat Riba. Allah SWT said, "So because of the injustice of the Jews, We prohibited them (eating) good things (which were previously) lawful for them and because they hindered (humans) a lot from the way of Allah, and because they eat Riba, when in fact they have been forbidden to him, and because they falsely eat people's property. So we have prepared for those who disbelieve among them a painful torment." (Qor'an verse an-Nisa: 160-161). Third, Allah SWT forbids eating Riba, which is doubled. Allah SWT says, "O you who believe, keep away from eating Riba multiplied and fear Allah SWT so that you get lucky." (Qor’an verse Ali Imran: 130). Finally, It is emphasized that Riba is haram and is declared a forbidden command for Muslims. Allah SWT commands the believers to leave the rest of Riba. Allah SWT says, "O you who believe, fear Allah and leave the remnants (of various types) of Riba if you are believers. So if you do not do it, then know that Allah and His Messenger will fight you. And if you repent, then for you the principal of your wealth, you will not be wronged and not be wronged." (Q.S. Al-Baqarah: 278-279). The prohibition of Riba can also be found in the hadith of the Prophet Muhammad. There is a prohibition on Riba for Muslims in the hadith, which is clearly explained (Ahmad & Hassan, 2007). Some of the hadiths have cursed both the payer and Riba recipient (Narrated by Aun Ibn Hanifah, who narrated from his father. Then, the Prophet Muhammad condemns those who receive and give Riba, those who record the affairs of Riba, and are witnesses, and then he says that they are all the same. Finally, In performing the last pilgrimage, the Prophet said: "All forms of riba is forbidden. Indeed the capital you have is for you. You will not be persecuted and will not persecute. Allah SWT has sent down a command that riba is forbidden at all. I started with (amount of) interest (lent to many people) from Abbas, which canceled everything. "Furthermore, he, on behalf of his uncle "Abbas, has canceled all the total interest on capital loans from borrowers." From the verses and hadith, it is understood that Allah SWT strictly prohibits the practice of riba and the law is haram. This is included in the category of taking or obtaining property in an improper way. B. Islamic Bank Products Product knowledge can be interpreted as knowledge possessed by consumers about the products/services that will be consumed (Peña-Vinces, Solakis, & Guillen, 2020).
Product knowledge is a collection of various
kinds of
information about
products (Sanchez & Mahoney, 1996). The more knowledge and information about products owned by consumers, the consumers will be faster in deciding to purchase a product. Product is also defined as
anything that can be offered for attention
, skill,
use, or consumption that might satisfy a
need
or
want. Product knowledge also refers to the amount of information a consumer has turned in their memory about a particular product class, product form, brands, models, and ways to purchase them (N. Nurdin, Pettalongi, & Yusuf, 2018; Wilkins, van Wegen, & de Hoog, 1997). From this understanding, it can be seen that product knowledge refers to the number of information consumers have stored in themselves or their memories about certain product classes, product forms, brands, models, and their ways to buy.
Product knowledge is needed as
the
basis for the success of a product, usually through the use
/involvement
of a product. Consumer knowledge about a product is expected to affect satisfaction positively because knowledge will make
the
product more realistic
. Cognitive psychologists divide knowledge into declarative knowledge and procedural knowledge. Declarative knowledge is a subjective fact that is known by a person (Nurdin Nurdin, 2019). The subjective meaning here is that the person's knowledge may not always have to match the actual reality. In contrast, procedural knowledge is knowledge of how these facts are used. Declarative knowledge is divided into two categories: episodic and semantic (Cipolli, Fagioli, Mazzetti, & Tuozzi, 2004). Episodic knowledge involves knowledge that is limited by the trajectory of time. This knowledge is used to answer questions about when to use a product. On the other hand, semantic knowledge contains generalized knowledge that gives meaning to one's world. Cordell (1997) divides consumer knowledge into three categories: (1) Objective knowledge, (2) Subjective knowledge, and (3) Information about other
knowledge. Objective knowledge is
factual
information about a product class that
is
stored in
the consumer's
long-term memory. Subjective knowledge is the consumer's perception of what
and
how much he knows about a product class
. Consumers may also have information regarding knowledge of various other things. Figure 1. Theoretical Framework III. METHODOLOGY This research is included in the ex post facto research (Santos & Santos, 2015). Research is called ex post facto research because this research is a systematic empirical investigation in which scientists (
researchers) do not control the independent variables directly because the existence of
the
variables has occurred or basically
(Goodman-Scott et al.) This study
aims to find the effect of the
independent
variable
, namely the motivation
to
avoid usury and product knowledge, on the dependent variable, namely the decision to become a customer at Islamic banks in Palu City, Indonesia. The approach taken in this research is a quantitative approach (Miller, 2001), which means that all analysis of the information or data obtained is conducted through the process of statistical analysis or methods. The sample is part of the number or certain characteristics taken from a population to be studied. In determining the sample, we relied on Roscoe's theory, which is at least ten times the number of variables studied (Roscoe, Subramanian, Jabbour, & Chong, 2019). As a result, the sample of this study was 30 respondents. The samples were randomly selected in an Islamic bank. The data were analyzed using SPSS. IV. RESULTS A. Respondents Demography This study recruited 30 respondents randomly consisting of different education levels, ages, and jobs background. The demographic of the respondents is depicted in the following table 1. Table 1. Respondents Demography No Description N Percentage 1 Sex 16 53.3% 2 Male 14 46.7% 3 Female Age N Percentage 1 17 - 25 14 46.7% 2 26 - 35 12 40% 3 ≥ 36 4 13.3% Education N Percentage 1 Middle school 18 60% 2 Undergraduate 10 33.3% 3 Post-graduate 2 6.7% Jobs N Percentage 1 Government servants 3 2 Private sector workers 12 3 Business 10 4 Students 5 Table one above shows that there are 16 male and 14 female respondents with the age range between 17 to above 36 years old. Regarding education levels, most of them are middle school level, and others are undergraduate and post-graduate level. Most of the respondents work in the private sector, while others are doing their own business, and few work for government institutions. B.
Validity and Reliability
Test A
validity
test
is the extent to which a
measuring instrument is reliable in measuring what is being
measured. A valid instrument means that the measuring instrument used to obtain
the
data is valid
. Meanwhile,
a reliable instrument is an instrument that will produce the same data
when
used several times to measure the same object. a
. Validity test The
minimum requirement to be considered eligible is r = 0.3
, so
the correlation between items with a total score
of
less than 0.3
then
the
items
in the instrument
are
declared invalid. On
the other hand, if the total score is positive and greater than 0.3 (r > 0.3), then the instrument is declared valid. Riba Avoidance Three statement items in the questionnaire measure the variable of motivation to avoid riba. Valid determination criteria are determined from the statement items obtained by the value of rcount > table as shown
in the following table: Table
2. The
Result of the
Validity Test
of
Riba Avoidance Statement Items rcount rtable Status Statement 1 0,526
0,30 Valid Statement
2
0
,800
0,30 Valid Statement
3
0
,335
0,30 Valid Based on the table
above, it can be concluded that the validity test results on all statement items on the variable of Motivation to Avoid Riba can be concluded.
All statement items are
declared
valid because they have
an
r count
> r table. Product knowledge Three statement items in the questionnaire measure product Knowledge variable. Valid determination criteria are determined from the statement items obtained by the value of r count > r table
as shown in the following table: Table
3.
The
Results
of
Product Knowledge Validity Test Statement Items rcount rtable Status Statement 1 0,438
0,30 Valid Statement
2
0
,682
0,30 Valid Statement
3
0
,591
0,30 Valid Based on the table
above shows that the results of the validity test on all statement items on the Product Knowledge variable,
it can be concluded that
all
statement items are declared valid
because they have the acquisition value of r count > r table. The Decision to Become a Customer Five statement items in the questionnaire measure the Variable Decision to Become a Customer. Valid determination criteria are determined from the statement items obtained by the value of r count > r table as
shown in the following table: Table
4.
The
Result
of
the Validity Test
of the
Decision to Become a Customer Statement Items rcount rtable Status Statement 1 0,759
0,30 Valid Statement 2 0
,684
0,30 Valid Statement 3 0
,732
0,30 Valid Statement 4 0
,759
0,30 Valid Statement 5 0
,575
0,30 Valid
Based on
the
table above shows
that
the results of the
validity
test
on all statement items in the Decision to Become a Customer variable, it can be concluded
that all statement items are
declared
valid because they have
an
r count
>
r table. Reliability Test
A
reliability test
was conducted
to
determine
whether the instrument
can be trusted as a measuring instrument for research data. The
following are the results of the
reliability
test using the
Cronbach Alpha (α) technique. An instrument
is said to be reliable if it gives a Cronbach Alpha value > 0,60
. Table 5.
The Results of Reliability
Test of Variables X1, X2, and Y Variable Number of Questions Cronbach Alpha Explanation Motivation to Avoid Riba 3 0,709 Reliable Product knowledge 3 0,729 Reliable The Decision to Become a Customer 5 0,872 Reliable Based on the table above shows that the instrument reliability in this study is stated to be
reliable because it has
a
Cronbach's Alpha
(α)
value greater than 0.60
(α > 0.60). The table shows that the questionnaire is reliable when used to measure the same object again, and the results are relatively different. 4.2 Description of Research Variables After the data is collected, the next step is to tabulate the data to see the respondents' responses regarding the variables of Motivation to Avoid Riba, Product Knowledge, and Decision to Become a Customer. a. Respondent's answers on Riba Avoidance (X1) The results of tabulation of ordinal data obtained from each respondent with three items
can be seen in the following table: Table
6. Frequency Tabulation
of
Riba Avoidance NO F % F % F % F % F % n total Mean RES
SS/5 S/4 RR/3 TS/2 STS/1
score P1 13 43,3 14 46,7 3 10,0 0 0,0 0 0.0 30 130 4,33 P2 15 50,0 15 50,0 0 0,0 0 0,0 0 0.0 30 135 4,50 P3 19 63,3 11 36,7 0 0,0 0 0,0 0 0.0 30 139 4,63 Mean Variable 4,49 The table above describes the measurement of the variable of Motivation to Avoid Riba from respondents consisting of 3 statement items. The response to the first statement is "I use Islamic banks because I want to make transactions that are more halal" as many as 13 respondents or 43.3% answered strongly agree, as many as 14 respondents or 46.7% answered agree, then three respondents or 10.0% responded doubtfully. The total score of the answers from 30 respondents was 130, with an average score of 4.33%. So the first statement is included in the very good assessment criteria. The response to the second statement is, "I use Islamic banks because I want the assets used to be free from riba." Namely, as many as 15 respondents or 50.0% answered strongly agree, as many as 14 respondents or 50.0% answered agree. The total score of the answers from 30 respondents was 135, with an average value of 4.50%. So the first statement is included in the very good assessment criteria. The response to the third statement is "I understand the dangers of riba, so I choose Islamic banks " as many as 19 respondents, or 63.3% answered strongly agree, as many as 11 respondents or 36.7% answered agree. The total score of the answers from 30 respondents was 139, with an average score of 4.63%. So the first statement is included in the very good assessment criteria. b. Respondents' answers on Product Knowledge (X2) Tabulation results from ordinal data obtained from each respondent with 3 statement items
can be seen in the following table: Table
7. Tabulation
of
Product Knowledge NO F % F % F % F % F % N total mean RES SS/5 RR/3 TS/2 S/4 STS/1 score P1 21 70,0 9 30,0 0 0,0 0 0,0 0 0,0 30 141 4,70 P2 15 50,0 13 43,3 2 6,7 0 0,0 0 0,0 30 133 4.43 P3 15 50,0 11 36,7 4 13,3 0 0,0 0 0,0 30 131 4.37 Mean Variable 4,50 The table above describes the measurement of the Product Knowledge variable from respondents consisting of 3 statement items. The first statement is "I save my money at an Islamic bank in Palu City because the contract is clear." namely as many as 21 respondents or 70.0% answered strongly agree, as many as nine respondents or 30.0% answered agree. The total score of the answers from 30 respondents was 141, with an average score of 4.70%. So the first statement is included in the excellent assessment criteria. The response to the second statement is, "I choose to use the products/services of Islamic banks because it uses a profit-sharing system." As many as 15 respondents or 50.0% answered strongly agree, as many as 13 respondents or 43.3% answered agree, then two respondents or 6.7% answered doubtfully. The total score of the answers from 30 respondents was 133, with an average score of 4.43%. So the second statement is included in the very good assessment criteria. The response to the third statement is, "I am satisfied with saving at Islamic banks because its operations/activities are in accordance with sharia/Islamic law." As many as 15 respondents or 50.0% answered strongly agree, as many as 11 respondents or 36.7% answered agree, then four respondents or 13.3% answered doubtfully. The total score of the answers from 30 respondents was 131, with an average score of 4.37%. So the third statement is included in the very good assessment criteria. c. Respondent's answers on Decision to Become a Customer (Y) Tabulation results from ordinal data obtained from each respondent with 5 statement items and in the following table: Table 8. Tabulation of Frequency of Decision to Become a Customer NO F % F % F % F % F % n total mean RES
SS/5 S/4 RR/3 TS/2 STS/1
score P1 17 56,7 13 43,3 0 0,0 0 0,0 0 0,0 30 137 4,57 P2 16 53,3 14 46,7 0 0,0 0 0,0 0 0,0 30 136 4,53 P3 16 53,3 14 46,7 0 0,0 0 0,0 0 0,0 30 136 4,53 P4 17 56,7 13 43,3 0 0,0 0 0,0 0 0,0 30 137 4,57 P5 14 46,7 15 50,0 1 3,3 0 0,0 0 0,0 30 133 4,43 Mean Variable 4,53 The table above describes the measurement of the Decision to Become a Customer variable from respondents consisting of 5 statement items. The first statement is, "I feel that the services of Islamic banks can provide benefits and meet my needs." As many as 17 respondents or 56.7% answered strongly agree, as many as 13 respondents or 43.3% answered agree. The total score for the answers from 30 respondents was 137, with an average score of 4.57%. So the first statement is included in the very good assessment criteria. The response to the second statement is, "I am looking for information about Islamic banks so that my money needs and security are guaranteed" as many as 16 respondents, or 53.3% answered strongly agree, as many as 14 respondents or 46.7% answered agree. The total score of the answers from 30 respondents was 136, with an average score of 4.56%. So the second statement is included in the very good assessment criteria. The response to the third statement is "I got solutions and alternatives for my money security needs through the product of Islamic banks " as many as 16 respondents or 53.3% answered strongly agree, as many as 14 respondents or 46.7% answered agree. The total score of the answers from 30 respondents was 136, with an average score of 4.56%. So the third statement is included in the very good assessment criteria. The response to the fourth statement is "I feel that I get convenience at Islamic banks" as many as 17 respondents or 56.7% answered strongly agree, as many as 13 respondents or 43.3% answered agree. The total score for the answers from 30 respondents was 137, with an average score of 4.57%. So the fourth statement is included in the very good assessment criteria. The response to the fifth statement is "I recommend others to use the services of Islamic banks" as many as 14 respondents, or 46.7% answered strongly agree, 15 respondents or 50.0% answered agree, then one respondent or 3.3% responded hesitantly. The total score of the answers from 30 respondents was 131, with an average score of 4.37%. So the fifth statement is included in the very good assessment criteria. 4.3 Hypothesis Testing a. Simultaneous
Test (F Test) The F statistical test shows whether all independent or independent variables included in the model have a joint
effect
on the dependent
or dependent
variable
. The hypothesis is accepted if the significance probability value is < 0.05 where the fcount > f table. The hypothesis is rejected if the significance probability value is > 0.05.1 The
results of the
F statistical
test can be seen in the
following
table
:
Table 9. F Test Results ANOVA Model Sum of Squares df Mean Square F Sig
. 1
Regression
95,676 2 47,838 38,798 ,000a Residual 33,291 27 1,233 Total 128,967 29 a. Predictors: (Constant), riba avoidance, products knowledge b. Dependent Variable: Decision to Become a customer To prove the significance of the influence of the variables Riba Avoidance (X1) and Product Knowledge (X2) on the Decision to Become a Customer (Y), the F test was carried out (Statistical Test F). Based on the processed SPSS data referenced to the ANOVA table, the calculated f count is 38.798 > f table 3.34 with an F
sig value of 0.000
, while
the alpha
(α)
value
is
0.05
. Thus
the
value
of
F sig < alpha (α) (0.000 < 0.05) means that the motivation to avoid usury and product knowledge has a significant effect on the decision to become a customer of Islamic banks. b. Partial Test (T-Test) Hypothesis testing with a
t-test basically shows how far the influence of one independent variable
is
individually in explaining the dependent variable
. To be able to do a significance of the constants of each independent variable, the hypothesis is used H1 is a significant regression coefficient and H0 is an insignificant regression coefficient. Based on the results of regression testing, for decision making, namely,
if the probability value is
less
than 0.05, then H0 is
rejected, while
if the probability value is greater than 0.05, then H0 is accepted
. To
test
whether each of the motivations to avoid Riba and product knowledge of the decision to become a customer at Islamic banks. The following are
the results of the
statistical
t
-value
test. Table 10
. Significant T-
Test Results
(Partial)
Coefficients Model Unstandardized Coefficients
B Std. Error
Standardized Coefficients
Beta
t Sig
. Co linearity Statistics Toleranc e VIF 1 (Constant) 2,776 2,277 1,219 ,233 Riba avoidance 1,048 ,184 ,662 5,690 ,000 ,706 1,417 Product knowledge ,425 ,166 ,298 2,564 ,016 ,706 1,417 a. Dependent Variable: Decision to Become a bank costumer Based on the statistical calculation of the T-test of two independent variables, it was found that the riba avoidance is obtained by fcount 5.690 > from ftable 2.048 and
has a significance value
(Sig)
of 0
.000 with
a significant value of 0
.05. It means
0
.000 < 0.05. With this value, the variable of motivation to avoid riba (X1) significantly affects the decision to become a customer (Y). The magnitude of the effect can be seen in the Beta column. The
magnitude of the influence of the
X1
variable on
the Y variable
is
66.
2
%. Product knowledge (X2) fcount 2.564 > from ftable 2.048 and
has a significance value
(Sig)
of 0
.016 with
a significant value of 0
.05. It means
0
.016 < 0.05. With this value, the Product Knowledge variable (X2) significantly affects the Decision to Become a Customer (Y). The magnitude of the effect can be seen in the Beta column. The
magnitude of the influence of the
X2
variable on
the Y variable
is
29.8%. 1)
Coefficient of Determination (R2
) Analysis of
the coefficient of determination
was carried out
to
find out
how
big
the
percentage
of independent
contribution (X)
to the variable
(Y) was from the results of calculations through the SPSS statistical tool. The coefficient of determination was obtained
as follows. Table
11.
Coefficient of Determination Test Results (R2) Model
Summary Model
R R Square Adjusted
Square
R Std. Error of the Estimate
1 .861a .742 .723 1.11040 a. Predictors: (Constant), Product knowledge, Motivation to Avoid Riba b. Dependent Variable: Decision to Become a Bank Customer In the output display of the SPSS summary model, the amount of Adjusted R Square is 0.723. This means that changes influence changes in the Decision to Become a Customer (Y) variable in the independent variable consisting of Motivation to Avoid Riba and Product Knowledge of (72.3%). While the rest (100% - 72.3% = 27.7%) so (27.7%)
is influenced by other variables outside of this study
. 4.4 Discussion A. The Effect of riba avoidance and product knowledge on decisions to become a customer Based on the results of
multiple linear regression analysis with the help of SPSS 16.0
For windows,
the
effect
of
Motivation to Avoid Riba and Product Knowledge shows that Simultaneously has a significant influence on the Decision to Become a customer at Islamic banks. Likewise, the partial effect of each variable has a different magnitude of influence.
Based on the results of the
ANOVA
test, the
calculated count
value is
38.798 > ftable 3.34 with an F
sig value of 0.000, smaller than the alpha
(α)
value of 0.05
. Thus
the
value
of
F sig < alpha (α) (0.000 < 0.05) means that the motivation to avoid usury and product knowledge simultaneously has a significant effect on the decision to become a customer pf Islamic banks. The
results of this study are in line with previous studies
(e.g., Riaz, Khan, & Khan, 2017; Ritter, Borchardt, Vaccaro, Pereira, & Almeida, 2015). Riba avoidance and product knowledge play important roles in the decision to become a customer of Islamic banking institutions. Riba avoidance is an ultimate concern for many Muslim societies when interacting with financial institutions (Ullah, Harwood, & Jamali, 2018). The prohibition of
riba is mentioned and condemned in several different verses in the Qur,an
and in many hadiths. Religious Muslims mostly reject the concept of riba in banking institutions. As such, Islamic banking has become a solution for Muslims with high riba avoidance behavior. A. The effect riba avoidance on the decision to become a customer
Based on the results of the
statistical test
of the Motivation
to Avoid Riba, it was obtained that the value was 5.690 > from ftable 2.048 and had
a significance value
(Sig)
of 0
.000 with
a significant value of 0
.05. It means
0
.000 < 0.05. With this value, the variable of motivation to avoid usury (X1) partially has a significant effect on the decision to become a customer (Y). The magnitude of the effect can be seen in the Beta column. The magnitude of the
influence of the
X1
variable on the Y variable
is 66.2%
The results of
hypothesis testing indicate that the hypothesis relates to the motivation to avoid riba affects the decision to become a customer, meaning that the customer's motivation to avoid riba
has a significant effect. The results of this study are in line with
research conducted by Newaz, Fan, & Sharma (2016), who found an association between Muslim religiosity and purchase intention. In Islam, riba is a transaction that is strictly prohibited from being carried out. This is explained in several verses of the Qur'an and Hadith. One of the verses of the Qur'an that prohibits the practice of usury in the verse of Ali Imran/3:130 as follows: "O you who believe, do not eat usury multiplied and fear Allah so that you may be successful." The motivation to stay away from riba or usury is defined as a desire or ambition from within a person who ultimately encourages that person to stay away from bank interest and the dangers of riba, all of which have been forbidden by Allah SWT. Thus, the riba avoidance aims to practice an economic transaction contrary to Islamic teaching and law. Motivation is a factor that encourages someone to do a certain activity, and it is often interpreted as a factor driving a person's behavior (Ranisch, Garofoli, & Dubljevic, 2013). Meanwhile, Riba is an activity that is prohibited and is considered to cause more problems than providing a solution in overcoming financial problems. Thus, our findings show that motivation to avoid usury is an internal and external encouragement to avoid the dangers of riba or usury or bank interest, which Allah SWT has forbidden in the Qur'an. B. The Effect of Product Knowledge on the Decision to Become a Customer
Based on the results of the
product knowledge statistical
test
(X2),
the
count
value is
2.564> from ftable 2.048 and
has a significance value
(Sig)
of 0
.016 with
a significant value of 0
.05. It means
0
.016 < 0.05. With this value, the product knowledge variable (X2) significantly affects the Decision to Become a Customer (Y). The magnitude of the effect can be seen in the Beta column. The magnitude of the
influence of the
X2
variable on the Y variable
is 29.8%.
The results of
hypothesis testing indicate that the product knowledge affects the decision to become a customer of Islamic banking, which means that the knowledge possessed by customers plays an essential role in product selection (Li & Calantone, 1998). Our study is consistent with Larsson, Lissner, & Wilhelmsen (1999), who found that customers' knowledge influences their selection of a product. In the context of Islam knowledge, the Qur'an explains the importance of knowledge in selecting something in the Qur’an verse Al-Mujlah/58:11 as follows: “Allah will exalt those who believe among you and those who were given knowledge by several degrees. And Allah knows of what you do." Product knowledge is the knowledge possessed by consumers about the products/services that will be consumed (McEachern & Warnaby, 2008). Likewise, customers of Islamic banks in Palu city decided to become customers because they know the characterization of the Islamic bank products. The more knowledge and information customers have on products; the more customers can purchase a product. Product knowledge is needed to select a product,
usually through the use of a product
. Customer
knowledge about a product is expected to affect satisfaction positively because knowledge will make
the
product more realistic
.
V. CONCLUSION Based on the results and discussion
, the researchers concluded
that
riba avoidance
has
a significant effect on the decision to become a customer of Islamic banks. It can be seen that the probability value or significant value is 0.000 <
0.05, which means that the
variable of Motivation
to
Avoid Riba
has
a
significant effect on
the decision to become a customer. The product knowledge also has a significant effect on the decision to become a customer of Islamic banks. The probability value or significant value is 0.016 <
0.05
, which
means that the
Product Knowledge variable
has a significant effect on
the decision to become a customer. Simultaneously, the riba avoidance and product knowledge on the decision to become a customer of Islamic banks have a significant effect. The magnitude of the effect shows that the model summary table and in the Adjusted R Square column, which is 0.723% or
72.3%, and the remaining 27.7% is influenced by other variables not included in this study
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DOI: https://doi.org/10.1016/S0957-4174(97)00022-5 The Effect of Riba Avoidance and Product Knowledge on the Decision to Become a Costumer of Islamic Banks The Effect of Riba Avoidance and Product Knowledge on the Decision to Become a Costumer of Islamic Banks The Effect of Riba Avoidance and Product Knowledge on the Decision to Become a Costumer of Islamic Banks The Effect of Riba Avoidance and Product Knowledge on the Decision to Become a Costumer of Islamic Banks The Effect of Riba Avoidance and Product Knowledge on the Decision to Become a Costumer of Islamic Banks The Effect of Riba Avoidance and Product Knowledge on the Decision to Become a Costumer of Islamic Banks The Effect of Riba Avoidance and Product Knowledge on the Decision to Become a Costumer of Islamic Banks The Effect of Riba Avoidance and Product Knowledge on the Decision to Become a Costumer of Islamic Banks The Effect of Riba Avoidance and Product Knowledge on the Decision to Become a Costumer of Islamic Banks The Effect of Riba Avoidance and Product Knowledge on the Decision to Become a Costumer of Islamic Banks The Effect of Riba Avoidance and Product Knowledge on the Decision to Become a Costumer of Islamic Banks
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