Exploring the Impact on Islamic Financial Literacy: A Moderating Model Using a Structural Equation Modelling Approach

Siti Noraisyah Norizan; Nashirah Abu Bakar

doi:10.32350/jitc.161.09

Siti Noraisyah Norizan Islamic Business School, College of Business, Universiti Utara Malaysia, 06010, Kedah, Malaysia https://orcid.org/0009-0006-3293-7035
Nashirah Abu Bakar Islamic Business School, College of Business, Universiti Utara Malaysia, 06010, Kedah, Malaysia https://orcid.org/0000-0002-0838-2299

DOI: https://doi.org/10.32350/jitc.161.09

Keywords: Goal Setting Theory, Islamic financial literacy, Malaysia, Social Learning Theory, Theory of Planned Behaviour, university students

Abstract

Abstract Views: 3

This study examined the factors influencing Intention (IT) toward Islamic financial literacy by integrating three theories. Theory of Planned Behaviour (TPB) involves several constructs including Attitude (ATT), Subjective Norm (SN), and Perceived Behavioural Control (PBC). Social Learning Theory (SLT) comprises the construct including Observational Knowledge (OK); and Goal Setting Theory (GST) contains the construct including Goal Commitment(GC). This study employs a quantitative approach, using a cross-sectional survey and random sampling to select respondents. Accordingly, 379 respondents from a Malaysian public university were gathered at the end of the study. The construct was analysed using Partial Least Squares Structural Equation Modelling (PLS-SEM) through SMARTPLS4. The findings of this study revealed that ATT (β = 0.112, p = 0.039), SN (β = 0.144, p = 0.027), PBC (β = 0.278, p < 0.001), and OK (β = 0.124, p = 0.009) significantly influenced students’ IT toward Islamic financial literacy. Additionally, GC moderated the relationship between SN and IT (β = 0.140, p = 0.029). Furthermore, the model explained 60.6% variance when R-squared indicates the value of 0.606, with SRMR being 0.072, and achieved a satisfactory model fit. This study’s finding encourages promoting Islamic financial literacy through educational programmes, social observation, and motivational strategies. Overall, future research should explore SLT or GST as a whole to strengthen Islamic financial literacy.

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