The Factors That Influenace Islamic Banking Selection Criteria Among International Students in Selected Northern Universities of Malaysia

1. Problem Statement

In Malaysia, the restructuring of the higher education system in 1996 has turned country into a new destination for international students in different countries such as Middle East and, Africans, Europeans study abroad (Morshidi, 2008). Tan Sri Muhyiddin, the Minister of Education of Malaysia announced that Malaysia have vision to attract at least 20, 0000 international students to study in Malaysia by 2020 (Melissa Chi, 2011). Besides on that the majority of international students study in Malaysia are those who come from Muslim countries.

The growing number of international students year by year contributes the economic growth of the country as well as the hub of excellence education. Since the Islamic banks are a source of economic for the country and international students increasing year by year there is an opportunity to investigate the factors influencing their selection criteria of Islamic banking system. According to (Almossawi, 2001) highlighted that international students are a huge opportunity to open Islamic banking accounts such as current account, saving account, investment account, and other Islamic banking activities. However, the different background of international students needs to understand the Islamic banking products and service.

Although there are numerous studies on the factors that affecting customers selecting Islamic banks, but to the author’s knowledge, none of them have not been done particularly on international students. Hence, based on that ground, this study try to minimize gaps in the study of Islamic banking selection criteria by examining the factors that would influence the international student’s selection criteria for Islamic banking, by focusing on Muslim international students in Malaysia especially northern states universities, this study investigates four factors (religiosity, knowledge, service, reputation).

1.2 Research Questions

1. What is the relationship between Religiosity and selection criteria of Muslim international students in Islamic banks?
2. What is the relationship between Knowledge and selection criteria of Muslim international students in Islamic banks?
3. What is the relationship between Service and selection criteria of Muslim international students in Islamic banks?
4. What is the relationship between Reputation and selection criteria of Muslim international students in Islamic banks?
5. What are the factors that influence selection criteria of Islamic banking?

1.3 Research Objectives

The main objective of this study is to examine factors that influence the selection criteria of international students in Islamic banks in Malaysia. The specific objectives of the study are:

1. To identify the relationship between  Religiosity and Islamic bank’s selection criteria among Muslim International Students
2. To identify the relationship between Knowledge and Islamic bank’s selection criteria among Muslim International Students
3. To examine  the relationship between  Service  and Islamic bank’s selection criteria among Muslim International Students
4. To identify the relationship between Reputation and Islamic bank’s selection criteria among Muslim International Students
5. To identify the factors that influence the selection criteria of Islamic bank’s among Muslim International Students.

1.4 Research Framework

The Theoretical framework is a conceptual model of how one theorized or makes logical sense of the relationship between several factors or matters that have been identified as important for the study area (Sekaran, 2003). A theoretical framework enables the researcher to hypothesize as well as to test the relationship between variables involved and understanding of the related investigation area. This study is about Muslim international student Islamic banking selection criteria in Malaysia and the proposed framework for this study is shown as below: