Purpose: The purpose of this paper is to examine the level of understanding of Islamic banking concepts and the factors that influence Islamic banking adoption in Malaysia, based on Rogers’ (1983; 2003) Diffusion of Innovation. Specifically, the impact of perceived attributes and other variables (understanding, consumer innovativeness and bank personnel’s professionalism) on Islamic banking adoption is examined. Design/methodology/approach: A quantitative approach using a sample of 200 working MBA students in a leading public university in Malaysia was used. The instrument used was a self-administered questionnaire survey. Findings: The level of understanding of various Islamic banking concepts is below average. A logistic regression reveals that the understanding of Islamic banking concepts and perceived advantage significantly influences the adoption of Islamic banking services. Research limitations/implications: The small sample size of 200 individuals may render the findings ungeneralizable. Future studies may use a larger sample from across Malaysia and incorporate other independent variables, such as religiosity and Islamic financial literacy. Practical implications: The Malaysian government can provide tax incentives and conduct educational roadshows on Islamic banking. Educating prospective consumers on the advantages of Islamic banking as opposed to conventional banking would provide more objective benefits that would boost the adoption of Islamic banking. Originality/value: The results of this paper will be useful for Islamic financial institutions to increase their marketing and promotional efforts to keep pace with stiff competition within the industry.

Purpose: The concept of “buy now pay later” leads Malaysian Generation Y (Gen Y) to excessively use their credit cards for spending. To gauge the extent of this worrisome scenario, the purpose of this paper is to attempt to investigate the factors, including credit attitudes, knowledge on credit card, materialism, social norm and self-efficacy, that influence credit card misuse amongst Gen Y in Malaysia. Design/methodology/approach: The authors have collected responses from a total of 501 respondents in two urban areas in Malaysia and estimated six multiple regression models to test five hypotheses. Findings: The results suggest that credit card knowledge and self-efficacy are negatively related to credit card misuse amongst Gen Y in Malaysia. In contrast, positive relationships were found to exist between credit card attitudes, materialism and social norm and the dependent variable. Research limitations/implications: In this study, the authors limit the data collection to the two biggest urban areas in Malaysia, namely, Klang Valley and Ipoh. Practical implications: For the regulator’s perspective, the results can be used to understand the alarming indebtedness behaviour amongst working members of Gen Y and outline appropriate and effective policies to reduce their serious indebtedness. Financial service providers, however, can collaborate with regulators to curb credit card misuse amongst Gen Y, so that the latter can avoid high bad debt from line of credit facilities and bankruptcy. Originality/value: The study’s findings will further enrich the existing literature on the factors affecting the credit card misuse, especially for the unique Gen Y cohort in Malaysia.

Purpose: The purpose of this paper is to empirically explore the financial well-being (FWB) of Malaysian households and to construct a subjective FWB index with present and future time perspectives.Design/methodology/approach: Data were collected from 1,867 respondents across five major regions in Malaysia. Adapting the InCharge Financial Distress/Financial Well-being (IFDFW) Scale by Prawitz et al. (2006) and the method of computing an index by Devlin (2009), this study develops an FWB index using subjective measures that include future time perspectives (retirement). The index was employed to measure the FWB across low-, middle- and high-income groups and socio-demographic characteristics.Findings: This study finds evidence that Malaysians' FWB is at an average level (46.8). Middle-income households' FWB (46.1) flanks between the financial well-being index (FWBI) levels of the low-income (37.4) and high-income households (58.7). Across age groups, education levels and employment sectors, the FWB of Malaysians significantly varies, although not across different ethnics, religions, zones and residential areas. Overall, the results suggest that the detrimental effects of FWB are perceived by all Malaysian households nationwide regardless of their religion, ethnicity and residential areas.Practical implications: The results of this study complement the other well-being indices used by policymakers and may serve as a useful input for government and policymakers for them to formulate appropriate strategies to promote higher FWB of Malaysian households based on their socio-demographic characteristics.Originality/value: This study used primary data and developed a subjective FWB index that leverages on people's perceptions of their own financial well-being while including present and future time perspectives. The main contribution of this paper is to construct an index that is easily interpretable and that complements the existing FWB indices, and to identify the segments of society that have low vis-à-vis high FWB.

Purpose: This study aims to investigate the association between Muslim individuals’ portfolio allocation choice and Islamic religiosity (levels and dimensions), controlling for risk tolerance and sociodemographic factors.Design/methodology/approach: The study uses primary data collected via survey questionnaires from a sample of 751 Muslim working individuals in Kuala Lumpur, Malaysia. Owing to the ordinal nature of the dependent variable, which reflects the levels of proportions of risky assets in portfolios, the data were analyzed using an ordered probit regression model.Findings: The findings reveal that Islamic religiosity levels in general were insignificantly related to portfolio allocation, but that two dimensions of religiosity (virtue and obligation) significantly impact the allocations of risky assets in the portfolio. The higher the level of virtue, the lower the propensity to allocate risky assets into the portfolio. On the contrary, the higher the level of obligation, the higher the propensity to allocate risky assets in the portfolio. Meanwhile, individuals with higher risk tolerance, income and education levels show greater propensity to allocate risky assets in the portfolio.Research limitations/implications: The sample is restricted to Muslims in Kuala Lumpur; hence, the findings are not easily generalized to Muslim investors in general. Findings may differ between Muslims across the world, so future research needs to expand from a country specific to an international analysis. In addition, future studies could include other determinants of portfolio allocation, such as financial literacy.Practical implications: The findings of this study may assist financial planners and policymakers to better understand the drivers of portfolio allocation among their Muslim clients.Originality/value: While other studies have tended to focus on the impact of religiosity on the holdings of specific financial assets, such as Islamic bank accounts or Takaful, the present study explores the effect of Islamic religiosity dimensions on the allocations of risky assets in the portfolio. The study also develops an ordinal measure of portfolio allocation and makes a methodological contribution by using an ordered probit regression analysis.

Purpose: This study investigates the borrowing behaviour of public sector employees in Malaysia by focusing on religious belief and psychological factors. The first objective of the study is to examine the differences in the borrowing behaviour according to demographic and socioeconomic factors of the civil servants. The second objective of the study is to investigate the influence of religious belief, excessive consumption, materialism and financial literacy towards two aspects of borrowing behaviour: personal loans and credit card usage.Design/methodology/approach: Primary data was collected using a digital survey which was distributed using a convenience sampling approach to public sector employees working in Putrajaya and Kuala Lumpur, Malaysia. A sample of 340 public sector employees was obtained for analysis.Findings: The study found that civil servants of different education backgrounds and income levels tend to differ in their borrowing behaviour. Specifically, those with lower levels of education, or lower income levels, tend to have a higher tendency of borrowing through personal loans. Multiple regression analyses reveal that public sector employees with either higher religious belief or higher financial literacy have a lower tendency of borrowing either through credit cards or personal loans. However, those who spend excessively or those who have higher levels of materialism tend to display more aggressive borrowing behaviour in terms of credit card usage and personal loans.Originality/value: The study contributes to the literature by exploring the role of religious belief on borrowing behaviour. In addition, the study contributes to the literature by examining a specific group in the Malaysian society, i.e. public sector employees, due to the perturbing state of indebtedness among civil servants in Malaysia.