SHARĪʿAH-COMPLIANT FINTECH USAGE AMONG MICROENTREPRENEURS IN MALAYSIA: AN EXTENSION OF UTAUT MODEL

  • Nik Hadiyan Nik Azman School of Management, Universiti Sains Malaysia, Malaysia
  • Mohd Zaidi Md Zabri Faculty of Business and Economics, University of Malaya, Malaysia

Abstract

Fintech has been beneficial to the financial services industry and has markedly enhanced financial inclusivity. While the fintech has already made its mark, there has been somewhat limited use of sharīʿah-compliant fintech (such as P2P lending, crowdfunding, wealthtech, e-wallets) by Muslim microentrepreneurs (MEs) in Malaysia.  Hence, this study examines the factors that affect sharīʿah-compliant fintech usage and its effect on income sustainability via an extended Unified Theory of Acceptance and Use of Technology (UTAUT). One hundred sixty-five (165) questionnaires were distributed to Muslim MEs who are users of sharīʿah-compliant fintech. This study reveals that performance expectancy and facilitating conditions have positive and significant effects on the use of sharīʿah-compliant fintech. The extended relationship of sharīʿah-compliant fintech adoption and income sustainability also presents a significant and positive relationship in which sharīʿah-compliant fintech has the potential to increase and, more importantly, sustain MEs’ income level.

Author Biography

Nik Hadiyan Nik Azman, School of Management, Universiti Sains Malaysia, Malaysia

Finance and Islamic Finance

Keywords: Fintech, Sharīʿah-compliant fintech, Muslim micro-entrepreneurs, UTAUT.

References

Alaa Alaabed, F., & Mirakhor, A. (2017). Accelerating risk sharing finance via fintech: Nextgen Islamic finance. Paper presented at the 1st International Colloquium on Islamic Banking and Islamic Finance, Tehran, Iran.

Alalwan, A. A., Dwivedi, Y. K., Rana, N. P., & Algharabat, R. (2018). Examining factors influencing Jordanian customers’ intentions and adoption of internet banking: Extending UTAUT2 with risk. Journal of Retailing and Consumer Services, 40(2018), 125-138.

Albers, S. (2010). PLS and success factor studies in marketing, In Esposito Vinzi, V., Chin, W. W., Henseler, J. and Wang, H. (Eds), Handbook of Partial Least Squares, Berlin: Springer.

Alghazi, S. S., Kamsin, A., Almaiah, M. A., Wong, S. Y., & Shuib, L. (2021). For sustainable application of mobile learning: An extended UTAUT model to examine the effect of technical factors on the usage of mobile devices as a learning tool. Sustainability, 13(4), 1856.

Allen, E., & Seaman, C. (2007). Likert scales and data analyses. Quality Progress 40, no. 7 (2007), 64–65 in Garland, R., The mid-point on a rating scale: Is it desirable?, Marketing Bulletin 2, (1991), 66-70.

Alrajawy, I., Daud, N. M., Isaac, O., & Mutahar, A. M. (2016). Mobile learning in Yemen public universities: Factors influence student’s intention to use. Paper presented at the 7th International Conference Postgraduate Education (ICPE7), Shah Alam, Selangor, Malaysia.

Anane, G. K., Cobbinah, P. B., & Manu, J. K. (2013). Sustainability of small and medium scale enterprises in rural Ghana: The role of microfinance institutions. Asian Economic and Financial Review, 3(8), 1003-1017.

Arner, D. W., Barberis, J., & Buckey, R. P. (2016). FinTech, RegTech, and the reconceptualisation of financial regulation. Northwestern Journal of International Law & Bussines, 37(3), 371-413.

Asiah, N., David, W., & Widiastuti, T. (2021). Training and coaching model design as a solution for women’s microentrepreneurs community (kota pelangi) problems. Engagement: Jurnal Pengabdian Kepada Masyarakat, 5(1), 93-109.

BBC. (2021). Millennials, baby boomers or Gen Z: Which one are you and what does it mean? Retrieved November 20, 2021, from https://www.bbc.co.uk/bitesize/articles/zf8j92p

Brau, J. C., & Woller, G. M. (2004). Microfinance: A comprehensive review of the existing literature. Journal of Entrepreneurial Finance, 9(1), 1-28.

Chan, S. C., & Owyong, D. (2007). Microfinance through pawnshops: Commercial sustainability and impact evaluation. Food Chain, 18(1), 57-64.

Chang, C. C. (2013). Library mobile applications in university libraries. Library Hi Tech, 31(3), 478-492.

Chin, W. W., B. Marcolin, B. L., & Newsted, P. R. (2003). A partial least squares latent variable modeling approach for measuring interaction effects: Results from a monte carlo simulation study and an electronic-mail emotion/adoption study. Information Systems Research, 14(2) 189–217.

Clauss, T., Bouncken, R. B., Laudien, S., & Kraus, S. (2020). Business model reconfiguration and innovation in SMEs: A mixed-method analysis from the electronics industry. International Journal of Innovation Management, 24(2), 1-44.

Costa, A., & Ehrbeck, T. (2015). A market-building approach to financial inclusion. Innovations: Technology, Governance, Globalization, 10(1-2), 53-59.

Davis, F. D. (1989). Perceived usefulness, perceived ease of use, and user acceptance of information technology. MIS Quarterly, 13(3), 319-340.

DeLone, W. H., & McLean, E. R. (1992). Information systems success: The quest for the dependent variable. Information Systems Research, 3(1), 60-95.

Economic Planning Unit. (2021). Prime Minister Department of Malaysia Statistics 2020, Retrieved on August 5, 2021, from https://www.epu.gov.my/sites/default/files/2021-02/malaysia-digital-economy-blueprint.pdf

Fang, Y., Qureshi, I., Sun, H., McCole, P., Ramsey, E., & Lim, K. H. (2014). Trust, satisfaction, and online repurchase intention. MIS Quarterly, 38(2), 407-428.

Fintech News Malaysia (2021). Fintech Malaysia Report 2021 – Fintech Reaches an Inflection Point in Malaysia, Retrieved on November 18, 2021, from https://fintechnews.my/27070/malaysia/fintech-malaysia-report-2021/

Foon, Y. S., & Fah, B. C. Y. (2011). Internet banking adoption in Kuala Lumpur: An application of UTAUT model. International Journal of Business and Management, 6(4), 161-167.

Fornell, C., & Larker, D. (1981). Structural equation modeling and regression: Guidelines for research practice. Journal of Marketing Research, 18(1), 39-50.

Garland, R. (1991). The mid-point on a rating scale: Is it desirable? Marketing Bulletin, 2(1), 66-70.

Ghazali, N. H., & Yasuoka, T. (2018). Awareness and perception analysis of small medium enterprise and start-up towards fintech instruments: Crowdfunding and peer-to-peer lending in Malaysia. International Journal of Finance and Banking Research, 4(1), 13-24.

Gonzalez, G. C., Sharma, P. N., & Galletta, D. F. (2012). The antecedents of the use of continuous auditing in the internal auditing context. International Journal of Accounting Information Systems, 13(3), 248-262.

Goodhue, D. L., & Thompson, R. L. (1995). Task-technology fit and individual performance. MIS Quarterly, 19(2), 213-236.

Guo, Y. (2015). Moderating effects of gender in the acceptance of mobile SNS based on UTAUT model. International Journal of Smart Home, 9(1), 203–216.

Hair, J. F., Black, W. C., Babin, B. J., & Anderson, R. E. (2010). Multivariate data analysis (7th ed.). Upper Saddle River, NJ Prentice Hall: Pearson.

Hair, J. F., Hult, G. T. M., Ringle, C. M., & Sarstedt, M. (2017). A primer on partial least squares structural equation modeling (PLS-SEM) (2nd ed.). Thousand Oaks: Sage.

Hair Jr, J. F., Sarstedt, M., Ringle, C. M., & Gudergan, S. P. (2017). Advanced issues in partial least squares structural equation modeling. London: SAGE Publications.

Hatch, M. (2013). The maker movement manifesto: Rules for innovation in the new world of crafters, hackers, and tinkerers. New York: McGraw-Hill.

Hsu, C.-L., Chen, M.-C., Lin, Y.-H., Chang, K.-C., & Hsieh, A.-Y. (2014). Adopting the extension of UTAUT model to investigate the determinants of e-book Adoption. International Conference on Information Science, Electronics and Electrical Engineering, 26-28 April 2014, Sapporo: IEEE. https://ieeexplore.ieee.org/abstract/document/6948199

Isaac, O., Aldholay, A., Abdullah, Z., & Ramayah, T. (2019). Online learning usage within Yemeni higher education: The role of compatibility and task-technology fit as mediating variables in the IS success model. Computers & Education, 136(July 2019), 113-129.

Kim, K., & Hann, I. (2013). Does crowdfunding democratize access to capital? A geographical analysis. INFORMS Conference on Information Systems and Technology (CIST), Arlington, Virginia.

Kock, N., & Lynn, G. (2012). Lateral collinearity and misleading results in variance-based SEM: An illustration and recommendations. Journal of the Association for Information Systems, 13(7), 546-580.

Kulas, J. T., Stachowski, A. A., & Haynes, B. A. (2008). Middle response functioning in likert-responses to personality items. Journal of Business and Psychology, 22, 251-259. https://doi.org/10.1007/s10869-008-9064-2

Luarn, P., & Lin, H. H. (2005). Toward an understanding of the behavioral intention to use mobile banking. Computers in Human Behavior, 21(6), 873-891.

Lu, J., Yao, J. E., & Yu, C. V. S. (2005). Personal innovativeness, social influences and adoption of wireless Internet services via mobile technology. The Journal of Strategic Information Systems, 14(3), 245-268.

Marchewka, J. T., & Kostiwa, K. (2007). An application of the UTAUT model for understanding student perceptions using course management software. Communications of the IIMA, 7(2), 93-104.

Markus, M. L., & Loebbecke, C. (2013). Commoditised digital processes and business community platforms: New opportunities and challenges for digital business strategies. MIS Quarterly, 37(2), 649-653.

Martins, C., Oliveira, T., & Popovič, A. (2014). Understanding the Internet banking adoption: A unified theory of acceptance and use of technology and perceived risk application. International Journal of Information Management, 34(1), 1-13.

Moghavvemi, S., Mohd Salleh, N. A., Zhao, W., & Mattila, M. (2012). The entrepreneur’s perception on information technology innovation adoption: An empirical analysis of the role of precipitating events on usage behavior. Innovation: Organization & Management, 14(2), 231-246.

Nik Abdul Aziz, N. N. A., & Mukhtar, D. (2021). Entrepreneurial survivability during pandemic among micro-entrepreneurs. Paper presented at the First International Conference on Society 5.0, Virtual event.

Nik Azman, N. H., Kassim, S., & Adeyemi, A. A. (2016). Role of ar-rahnu as micro-credit instrument in achieving financial self-sufficiency among women micro-entrepreneurs. Intellectual Discourse, 24(Special Issue), 365-385.

Nik Azman, N. H., Md Zabri, M. Z., & Zul Kepili, E. I. (2021). Nexus between Islamic microfinancing and financial wellbeing of micro-entrepreneurs during the Covid-19 pandemic in Malaysia. Jurnal Ekonomi Malaysia, 55(1), 135-146.

Nuq, P. A., & Aubert, B. (2013). Towards a better understanding of the intention to use eHealth services by medical professionals: The case of developing countries. International Journal of Healthcare Management, 6(4), 217-236.

Raman, A., & Don, Y. (2013). Preservice teachers’ acceptance of learning management software: An application of the UTAUT2 model. International Education Studies, 6(7), 157-164.

Raman, A., & Don, Y., Khalid, R., & Rizuan, M. (2014). Usage of Learning Management System (Moodle) among Postgraduate Students: UTAUT Model. Asian Social Science, 10(14), 186-192.

Ramayah, T. (2006). Interface characteristics, perceived ease of use and intention to use an online library in Malaysia. Information Development, 22(2), 123-133.

Sarstedt, M., Ringle, C. M., Cheah, J-H., Ting, H., Moisescu, O. I., & Radomir, L. (2019). Structural model robustness checks in PLS-SEM. Tourism Economics, 20(10), 1-24.

SME Corp. (2020). Malaysia Report 2020, Retrieved August 10, 2021, from https://www.smecorp.gov.my/index.php/en/policies/2020-02-11-08-01-24/sme-statistics

Sripalawat, J., Thongmak, M., & Ngramyarn, A. (2011). M-banking in metropolitan Bangkok and a comparison with other countries. Journal of Computer Information Systems, 51(3), 67-76.

Šumak, B., Polancic, G., & Hericko, M. (2010, February). An empirical study of virtual learning environment adoption using UTAUT. In 2010 Second International Conference on Mobile, Hybrid, and On-line Learning (pp. 17-22), St. Maarten, Netherlands Antilles.

Thomas, T., Singh, L., Gaffar, K., Thakur, D., Jackman, G. A., Thomas, M., ... & Tooma, K. (2014). Measurement invariance of the UTAUT constructs in the Caribbean. International Journal of Education and Development using ICT, 10(4), 102-217.

Venkatesh, V., Brown, S. A., & Bala, H. (2013). Bridging the qualitative-quantitative divide: Guidelines for conducting mixed methods research in information systems. MIS Quarterly, 37(1), 21-54.

Venkatesh, V., Morris, M. G., Davis, G. B., & Davis, F. D. (2003). User acceptance of information technology: Toward a unified view. MIS Quarterly, 27(3), 425-478.

Venkatesh, V., Thong, J. Y., Chan, F. K., Hu, P. J. H., & Brown, S. A. (2011). Extending the two‐stage information systems continuance model: Incorporating UTAUT predictors and the role of context. Information Systems Journal, 21(6), 527-555.

Venkatesh, V., & Zhang, X. (2010). Unified theory of acceptance and use of technology: US vs. China. Journal of Global Information Technology Management, 13(1), 5-27.

Wei, M. F., Luh, Y. H., Huang, Y. H., & Chang, Y. C. (2021). Young generation’s mobile payment adoption behavior: Analysis based on an extended UTAUT model. Journal of Theoretical and Applied Electronic Commerce Research, 16(4), 618-637.

Weijters, B., Cabooter, E., & Schillewaert, N. (2010). The effect of rating scale format on response styles: The number of response categories and response category labels. International Journal of Research in Marketing, 27(3), 236–247.

Wu, Y-L, Tao, Y-H., & Yang, P-C. (2008). The use of unified theory of acceptance and use of technology to confer the behavioral model of 3G mobile telecommunication users. Journal of Statistics & Management Systems, 11(5), 919-949.

Yang, K., & Forney, J. C. (2013). The moderating role of consumer technology anxiety in mobile shopping adoption: Differential effects of facilitating conditions and social influences. Journal of Electronic Commerce Research, 14(4), 334-347.

PlumX Metrics

Published
2022-05-31
How to Cite
Nik Azman, N. H., & Md Zabri, M. Z. (2022). SHARĪʿAH-COMPLIANT FINTECH USAGE AMONG MICROENTREPRENEURS IN MALAYSIA: AN EXTENSION OF UTAUT MODEL. Journal of Islamic Monetary Economics and Finance, 8(2), 305-324. https://doi.org/10.21098/jimf.v8i2.1417
Section
Articles