Islamic Financial Literacy and Intention to Use Islamic Banking: Empirical Evidences from Lahore Pakistan

Abstract

The purpose of this study is to investigate the impact of Islamic Financial Literacy, Awareness, and Cost & Benefit on the Intention to use Islamic banking among the students from universities from Lahore. Data were collected through a structured questionnaire and analysed using SmartPLS 3.0 with structural equation modelling to test the hypothesized relationships. Results revealed that majority of the respondents lack Islamic banking knowledge, they are less aware about Islamic banking, products and services, and perceive that the cost of Islamic banking products is high. Moreover, the results suggest that the IFL, Awareness, and Cost and Benefit are increasing the intention to use Islamic banking. So it’s better for Islamic banks and the State Bank of Pakistan’s Islamic Banking Department to run ads and awareness programs to help more people understand and use the Islamic banking system.