Islamic Finance Across Boundaries: A Qualitative Study on Non-Muslim Malaysian Cross-Border Workers in Johor

Islamic finance in Malaysia is globally recognized for its regulatory rigor, institutional infrastructure, and broad product offerings. Yet, its engagement with non-Muslim consumers, particularly in dynamic financial environments, remains underexplored. This study investigates perceptions, behaviors, and motivations toward Islamic finance among a unique demographic: non-Muslim Malaysian cross-border workers residing in Johor and commuting daily to Singapore. Using a qualitative approach grounded in Rational Choice Theory, data were gathered through three focus group discussions involving 19 participants from varied industries. Thematic analysis uncovered five dominant themes: (1) functional, benefit-driven engagement rather than religious adherence; (2) strategic dual-currency banking behavior; (3) alignment with ethical and ESG principles; (4) persistent misconceptions about product eligibility; and (5) proactive financial planning due to lack of CPF retirement coverage. Findings reveal a clear openness to Islamic financial products when framed through pragmatic and ethical lenses. This research contributes original qualitative insights into an under-researched cohort and offers actionable implications for Islamic financial institutions aiming to expand inclusivity and market penetration.