Understanding farmers’ decision-making to use Islamic finance through the lens of theory of planned behavior

Abstract

Purpose This study aims to determine the non-economic factors that probably influence the Pakistani farmers to use Islamic finance for agricultural production. This paper analyzes the other religiosity and familial leadership constructs in the standard theory of planned behavior (TPB) model from the Islamic banking perspective. Design/methodology/approach Data were collected from 233 farmers using snowball sampling techniques and partial least square structural equation modeling used for data analysis. An additional qualitative analysis was conducted of seven respondents through semi-structured interviews to deepen into knowledge about Islamic banking. Findings The findings demonstrate that attitude, subjective norms, religiosity and familial leadership to use Islamic banking among the farmers play a primary motivating role in manipulating their behavioral intentions to use it. However, PBC negatively affected the behavior of farmers to use Islamic banking. Practical implications This study highlights the importance of emotional attachment between the farmers and Islamic financial products according to Shariah law. Therefore, Islamic banks need effective strategies for the development of innovative products in the agricultural sector according to the Shariah principle. Originality/value The research contributes to the area of Islamic banking, demonstrating that “familial leadership” significantly influences an individual’s behavior toward decision-making to use Islamic finance.