Determinants of Millennials’ Intention towards Islamic Personal Financing in Labuan, Malaysia

This research investigates the determinants influencing millennials’ intention toward Islamic personal financing in Labuan, Malaysia. The topic is particularly relevant as the growth of Islamic personal financing lags behind other Islamic financial products, such as Islamic home financing and Islamic car financing. To address this concern, it is essential to identify the key factors influencing consumers’ intentions to choose this financing product. By applying the Theory of Planned Behaviour (TPB) framework and incorporating additional factors such as religiosity, Shariah compliance, and Islamic financial literacy, this study aims to provide a comprehensive analysis of consumer behaviour toward Islamic personal financing. The model was tested using survey data collected through a structured face-to-face questionnaire from 493 millennials in Labuan, Malaysia. The data were then analysed using Partial Least Squares (PLS) with SmartPLS 4.0 software. The findings reveal that attitude, subjective norms, perceived behavioural control, Shariah compliance, religiosity, and Islamic financial literacy significantly influence consumer intention toward Islamic personal financing. Among these, religiosity and perceived behavioural control emerged as the strongest determinants. These insights offer practical implications for Islamic banks, emphasizing the need to prioritize these key factors in marketing strategies to attract potential customers. For policymakers, the findings suggest the need to support Islamic financial literacy programs and strengthen Shariah governance to build consumer confidence and trust. Such efforts could drive greater adoption of Islamic personal financing, making it as competitive as other Islamic financial products in the market, while contributing to broader financial inclusion and the sustainable growth of the Islamic finance sector.