PERCEPTION AND ATTITUDES OF ENTREPRENEURS TOWARDS ISLAMIC AND COMMERCIAL BANK LOAN SYSTEM IN NIGERIA

This work presents a study that examines the perceptions and attitudes of entrepreneurs toward Islamic and commercial bank loan systems in Nigeria. The theory of planned behaviuor framework was adopted to investigate how awareness, marketing, coverage, cost, risk, and ethical/religious considerations influence entrepreneurial financing choices. A multivariate regression technique involving multinomial, binary, and linear models was used to test six hypotheses linking perceptual difference scores to financing decisions for the cross-sectional survey of 600 entrepreneurs across five business sectors in Nigeria. Results of this study substantiate that marketing effectiveness (B = 1.377, p < 0.001), service coverage (B = 2.199, p < 0.001), and cost competitiveness (B = 1.468, p < 0.001) significantly influence primary banking relationships, thereby validating the planned behaviour framework's perceived behavioral control dimension. Further findings in this study reveal critical paradoxes that awareness reinforces convectional banking dominance through negative coefficients (B = -2.042, p < 0.001) rather than promoting alternative adoption, while Islamic banking's perceived ethical superiority (x̄ = 0.286) and risk-sharing advantages (x̄ = 0.186) demonstrate no significant behavioral impact across all models, underscoring a disconnection between moral positioning and actual financing decisions. By extending planned behavior theory to foreground operational feasibility and structural constraints as dominant determinants that override attitudinal and other components in high-stakes financial contexts within emerging markets, this research contributes novel insights into how accessibility barriers and cost structures recalibrate entrepreneurial financing pathways despite favorable ethical perceptions. The study concludes with policy and practical recommendations aimed at eliminating infrastructural deficits through Islamic banking branch network expansion, implementing targeted awareness campaigns, ensuring cost competitiveness, and establishing supportive regulatory frameworks, thereby fostering inclusive financial access as a lever for sustainable entrepreneurial development in Nigeria.