Factors Associated with Taking out a Personal Finance from Islamic Banks: A Study from Almadinah, Saudi Arabia

Islamic banking is growing rapidly and currently are operating in about half of the world countries. In the current study, factors that contribute to taking out a personal finance from full-fledged Islamic banks in Saudi Arabia were investigated. To achieve the study objective, customers (269) of full-fledged Islamic banks from Almadinah city were surveyed using self-administered questionnaire. About 53% of the sample reported taking out a personal finance from Islamic banks. The purpose of taking personal finance was consumption and investment in 90% and 10% of the cases respectively. Regression analysis showed that age, social status, type of employment, satisfaction level and adherence to Islamic principles were associated with taking out a personal finance. The results provide feedback to the Islamic banks in Almadinah to improve personal financing programs.