Purpose: This paper aims to scrutinize the concept of Islamic financial literacy and propose the suitable items for its measurement.
Design/methodology/approach: An exploratory study is conducted due limited existing research works are available in the area of Islamic financial literacy. The items for measurement of Islamic financial literacy in this paper consider a number of significant features of Islamic finance.
Findings: A proposed measurement items of Islamic financial literacy have been developed. Several questions are constructed and grouped namely the money basics, Islamic banking, Takaful and Shariah-compliant investments.
Research implications: This study attempts to contribute towards acquiring new theoretical models, especially in suggesting items to measure the level of Islamic financial literacy and personal financial behavior.
Practical implications: The expected outcomes from this research will highlight an idea to the Islamic financial literacy and also act as a tool in order to improve the financial behavior as guided by Shariah.
Originality/value: This study is the first of this kind to advocate the items for measurement of Islamic financial literacy level by developing test questions consist of these four main aspects in Islamic finance and four elements to be measured in personal financial behavior.
Abdul Razak, S.H. (2012). Deposits and financing operations of Islamic banks (2nd ed.). Kuala Lumpur, Malaysia: INCEIF
Abdullah, M.A., and Anderson, A. (2015). Islamic financial literacy among bankers in Kuala Lumpur, Journal of Emerging Economies and Islamic Research, 3 (2).
Abdullah, M.A., and Chong, R. (2014). Financial literacy: An exploratory review of the literature and future research, Journal of Emerging Economies and Islamic Research, 2 (3).
Abdullah. R.F.S. and Abdul Rahman, A.R. (2007). Factors influencing knowledge of Islamic banking services: the case of Malaysian bank managers, Review of Islamic Economics. 11 (2), 31-54.
Ahmad, U.F., and Hassan, F.K. (n.d.). The time value concept of Islamic finance, The American Journal of Islamic Social Sciences, 23 (1).
AIF. (2015). Finance Matter: Understanding Gen Y. Kuala Lumpur, Malaysia.
Alhabshi, S.O. (2012). Wealth planning and management (2nd ed.). Kuala Lumpur, Malaysia: INCEIF.
Al-Tamimi, H.A and Kalli, A.A (2009). Financial literacy and investment decisions of UAE investors, The Journal of Risk Finance, 10:5, 500-516.
Al-Quran
Bankruptcy Statistics December 2017. (2018). Retrieved from http: // www.mdi.gov.my/index.php/ about-us/resources/statistics/bankruptcy/1233-bankruptcy-statistic-december-2017
Bateman, H.J., Ebling, C., Geweke, J., Louviere, J.J., Satchell, S.E., and Thorp, S.J. (2010). Economic rationality, risk presentation and retirement portfolio choice, CenSoC Working Paper, 10 (4).
Bley, J. and Kuehn, K. (2004). Conventional versus Islamic finance: Student knowledge and perception in the United Arab Emirates. International Journal of Islamic Financial Services, 5(4),17-30.
Buchari, I., Rafiki, A. and Al Qassab M.A.H. (2015). Awareness and attitudes of employees towards Islamic banking products in Bahrain, Procedia Economics and Finance 30 ( 2015 ), 68 – 78
Chen, H., and Volpe, R., (1998). An analysis of personal financial literacy among college students, Financial Services Review, 7(2), 107-128
Chen, H., and Volpe, R.P., (2002). Gender differences in personal financial literacy among college students, Financial Services Review, 11(3), 289-307.
Churchill, G.A. (1979). A paradigm for developing better measures of marketing constructs, Journal of Marketing Research, 16, 64-73.
Ergun, K. (2017). Financial literacy among university students: A study in eight European countries, International journal of consumer studies. 42 (2), 15. https://doi.org/10.1111/ijcs.12408
Hamid, A. H., and Nordin, N. A. (2001). A Study on Islamic banking education and strategy for the new millennium - Malaysian Experience, International Journal of Islamic Financial Services, 2(4).
Haron, S., Ahmad, N., and Planisek, S. L. (1994). Bank patronage factors of Muslim and non-Muslim customers, International Journal of Bank Marketing, 12(1), 32-40. http://dx.doi.org/10.1108/02652329410049599
Hashim, S. and Syazana, I. (2018). AKPK – Advancing prudent financial behaviour. Consumer and Market Conduct Department March 2018. Retrieved from http://www.bnm.gov.my/index.php?ch=en_publicationandpg=en_work_papersandac=69andbb=file
Hayhoe, C.R., Leach, L., Allen, M.W. and Edwards, R. (2005). Credit cards held by college students, Financial Counseling and Planning, 16(1).
Hogarth, J. M. (2002). Financial literacy and family. Journal of Family and Consumer Sciences, 94, 1–12.
Hassan, T.S. and Zaher, M.K. (2001). A comparative literature survey of Islamic finance and banking, Financial Markets, Institutions and Instruments, 10 (4), pp. 155-99.
Huston, S.J. (2010). Measuring financial literacy, Journal of Consumer Affairs 44 (2), 296 - 316.
Huston, S.J. (2009). The Concept and Measurement of Financial Literacy: Preliminary Results from a New Survey on Financial Literacy Assessment. Proceedings of Academy of Financial Services Annual Conference, CA: Anaheim.
Imelda, C. M., Angeline, M. P., Gwendelina, A. V. and Genalen, M.P. (2017). Financial literacy of professional and pre-ser
In-Text Citation: (Nawi, Daud, Ghazali, Yazid, & Shamsuddin, 2018)
To Cite this Article: Nawi, F. A. M., Daud, W. M. N. W., Ghazali, P. L., Yazid, A. S., & Shamsuddin, Z. (2018). Islamic Financial Literacy: A Conceptualization and Proposed Measurement. International Journal of Academic Research in Business and Social Sciences, 8(12), 629–641.
Copyright: © 2018 The Author(s)
Published by Human Resource Management Academic Research Society (www.hrmars.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode
