A COMPARATIVE STUDY EFFECT OF ETHNICITY ON THE ADOPTION OF ISLAMIC HOME FINANCING IN NIGERIA

Abstract

Previous research identified factors that affect the adoption of Islamic home financing in Nigeria without considering ethnicity. Nigeria is a multicultural country and each geographic region maintains is religion and culture. Due to this, ethnicity can often be a significant problem in Nigeria. However Islamic finance is for everyone irrespective of ethnicity, culture or religion. This paper integrates and expands upon earlier studies using the decomposed theory of planned behaviour and structural equation modelling (SEM) multigroup analysis to determine the differences among the three major ethnic groups based on their intention to adopt Islamic home financing. The result from a survey of 518 potential home buyers from the three major ethnic groups in Nigeria indicates differences in their perception of Islamic home financing. The chi-square difference reveals that the differences are significant and the path estimates indicate that Hausas have the strongest intention to adopt Islamic home financing. This study will serve as a reference for academicians who could replicate the theory and method used in this study for further research. It will also help bankers and regulators to promote Islamic banking among all the ethnic groups to emphasise that Islamic finance is not for only one religious group or ethnicity.