THE INFLUENCE OF PERCEIVED BENEFIT TOWARDS THE ATTITUDE AND INTENTION TO SUBSCRIBE TO ISLAMIC MICROCREDIT IN THE AGRICULTURAL SECTOR

Abstract

Microcredits offered by Islamic banks have benefitedsome parts of the rural populations. However, farmers, such as the Independent Oil Palm Smallholders (IOPS) face difficulty subscribing to it.This is becausethe terms and conditions set by the Islamic banking institutions are unsuitable for applicationin the agricultural sector. Hence, this research is conducted to achieve two objectives.The first objective is to analyse the influence of perceived benefit towards the intention to subscribe to microcredit. The second objective is to analysethe role of attitude as a mediation factor that connects perceived benefit to the intention to subscribe to microcredit. Questionnaires were distributed to IOPS in the district of Hilir Perak, Malaysia using the cluster sampling method. Research data were analysed using Structural Equation Modelling. This research found that a significant perceived benefit could influence the development of attitude and intention among members of IOPS. This means that IOPS members still think that the microcredits provided by Islamic banks are capable of improving palmoil productivity at their oil palm estates and they want to subscribe to it. The implication of this research is that the features of microcredit products at Islamic banks need to be improved so that IOPS members can subscribe to it. This is because the existing microcredit products are more focused on the business sector.