Adoption of Islamic Banking in Mauritius

Islamic finance has gained increasing acceptance and recognition on a global scale. Islamic finance refers to the financial institutions, products, and services designed to comply with the Shariah law. Islamic banking, which is also known as interest free banking, is part of Islamic finance and abides by the Shariah principles. Islamic banking has been experiencing massive growth in the world, but in Mauritius it is still in its formative stage. The main objective of this research is to identify the factors affecting customers’ adoption of Islamic banking in Mauritius. A total of seven factors, namely relative advantage, complexity, observability, uncertainty, compatibility, trialability, and consumer awareness, are identified. This quantitative research used survey questionnaire as the means of data collection. The targeted population is the general public of Mauritius, which comprises both the users and nonusers of Islamic banking. The results show that relative advantage, observability, compatibility, trialability, and consumer awareness have a positive and significant effect on the adoption of Islamic banking in Mauritius. However, complexity and uncertainty have a negative effect on the adoption of Islamic banking. The research has found that customer awareness remains the core issue of the adoption of Islamic banking and that relative advantage has a positive influence on such adoption. Further the research indicates that complexity is a negative influence in the adoption of Islamic banking in Mauritius.