The Impact of Customer Perception and Religiosity on Satisfaction with Car Ijārah Financing in Pakistan: The Mediating Effect of Clarity and Accuracy

Purpose — This research aims to assess the impact of customer perception and religiosity on satisfaction with the car ijārah financing product which is offered in the Islamic banking market in Pakistan. The study also highlights the importance of clarity and accuracy that boost customer confidence in the car ijārah purchasing process. Design/Methodology/Approach — The study applied the Partial Least Squares-Structural Equation Modelling (PLS-SEM) technique to explore the complex relationship among the latent variables and their constructs. The primary data were collected from existing Islamic banking car ijārah customers who have already availed of the product from Islamic banks in Pakistan. A total of 268 respondents were finalised after scrutiny. Findings — The findings endorsed the proposed hypothesis of the study and demonstrated a strong and positive correlation between customer perception, religiosity, and customer satisfaction. Similarly, clarity and accuracy also act as a mediating variable (partially mediate the variables), and have a substantial effect on customer satisfaction. Originality/Value — This study extends the existing literature by incorporating religiosity into the customer satisfaction model for car ijārah financing. It provides a unique theoretical perspective, highlighting how religious beliefs impact customer behaviour and perceptions regarding Islamic financial products such as car ijārah. The study therefore fills a gap in the literature by addressing how religious values affect customer perception of Islamic financial products, offering insights that could help Islamic banks tailor their services to better align with religious beliefs. Research Limitations — The study is limited by its focus on existing customers from the Islamic banking sector in Pakistan that availed of car ijārah financing. Additionally, future research could explore other regions to enhance the generalizability of the results. Theoretical Implications — The study underscores customer perception and religiosity as crucial factors that influence customer satisfaction. Similarly, by improving clarity and accuracy about car ijārah products, Islamic banks can enhance customer satisfaction and increase market share. Practical Implications — The study provides valuable insights to Islamic banking practitioners to enhance and reinforce the car ijārah product structure in Pakistan by taking into account the need to address religious customers’ preferences. Islamic banks also need to focus on the clarity and accuracy aspects of Islamic financial products in their marketing and awareness campaigns to attract more religious customers.