Factors influencing customer intention to use Islamic hire purchase financing: the mediating role of trust

The rising demand for car ownership is crucial, especially for banks that provide loan facilities that assist customers in owning a car, specifically through Islamic hire purchase financing. Customer intention has become a concern for these banks and has been widely researched. Previous studies have found that customers’ need for loan services determines their intention to use Islamic hire purchase financing. This is a critical point to emphasize, as Islamic hire purchase has the potential to fulfill customer needs and ensure consistent demands. The present research employed a comprehensive framework to investigate the factors influencing customer intention to use Islamic hire purchase financing. It aimed to bridge the existing customer intention and trust gap by drawing on strategies to enhance customers’ intention to use Islamic hire purchase financing. An online survey was conducted among bank customers who could use Islamic hire purchase financing in northern Malaysia. A total of 392 customers participated in the survey. The primary statistical technique employed in this research was the partial least squares structural equation model (PLS-SEM). Data analysis revealed that perceived behavior control and knowledge did not influence customer intention. Moreover, there was no mediation effect between price perception and religiosity in the relationship between customer intention and trust. Overall, the results indicate that the model effectively illustrates the factors influencing the attainment of customer intention and trust in Islamic hire purchase financing. It also provides a solid research framework for future investigations, offering a clear understanding of the mediation effect of trust as a strategic factor on customer intention in the context of Islamic hire purchase financing. Based on the findings, the theoretical and practical implicatins of the study as well as limitations and recommendations for future research are also discussed.