Loyalty towards Islamic Microfinances Industry: The Role of Religiosity, Image, and Trust

: Developing and generating customer loyalty is very important to give a positive impact on business results such as deposit amount, operating and marketing costs, rate customer retention and income. By having customers who are loyal to the product or organization, a business organization will be able to improve its business performance. Therefore, understanding the way to build customer loyalty is very important for every organization. In other words, loyalty is an important key for developing sustainable competitive advantage. However, the literature shows a lack of attention in assessing loyalty in the context of Islamic microfinance institutions (sharia cooperatives/BMTs). This study attempts to examine customer loyalty of Islamic microfinance institutions (sharia cooperatives/BMTs) through three important determinants, religiosity, image, and trust. This study used a field survey based on self-managed questionnaires with 300 respondents in total. The samplings were taken from some major cities in West Java Province, Indonesia, as representatives. The sample data were analyzed statistically through path analysis with the Partial Least Square Structural Equation Model (PLS-SEM) to determine perceptions of religiosity, image, trust, and loyalty. The results of this study indicate that Trust and Image have a positive effect on loyalty, but Religiosity does not. This finding shows that even though a person’s religiosity is considered good, it does not make the customer loyal to sharia cooperatives/BMTs. Customers will be more loyal if sharia cooperatives/BMTs can provide good image and trust, that will generate customer’s desire to be loyal. However, Religiosity has an influence on Trust and Image, so it is still important to increase Religiosity so that it can indirectly increase Loyalty.