Academic journal article Journal of Sustainable Development

The Role of Religious Education in Promoting the Islamic Banking System among the Young Muslim Generation: A Case Study

Academic journal article Journal of Sustainable Development

The Role of Religious Education in Promoting the Islamic Banking System among the Young Muslim Generation: A Case Study

Article excerpt

Abstract

The paper reports and discusses a study which was conducted on 490 Muslim respondents from the young generation between the ages 18 to 40 years. The study aimed to identify the popularity of the Islamic banking system among the students of the National University of Malaysia, and the role of Islamic education in promoting the Islamic banking system to the respondents. The findings of the study could be used to popularise further the Islamic banking system in the country. The respondents were selected randomly from The National University of Malaysia. Each respondent was given a booklet of questionnaires containing statements with given choices of yes or no answers as well as the open ended questions. The responses were analysed using the Statistical Package for the Social Sciences (SPSS), to obtain the percentages of the responses. The findings of the study indicated that the Islamic banking system was very popular among the younger generation. About 63% of respondents kept their savings in the Islamic banking system. The findings also shown that the respondents who are most inclined towards the system were those who had been educated in the Islamic education system. 85.0% of the students of the Islamic Studies Faculty saved their money in the Islamic banking system, followed by the respondents from the Faculty of Education (73%) and also the Faculty of Law (72.3%). The controlled groups i.e. the respondents from the other faculties, where the Islamic education was not thought, the percentages of the respondents who saved in the Islamic banking system were much lower.

Keywords: religious, Islamic banking, education, Malaysia, young generation

1. Islamic Banking: A Brief Malaysian Experience

The Islamic banking system is expanding not only in Malaysia but throughout the world (Kuncinas, P, 2010). In Malaysia, the Islamic finance system was implemented with the introduction of the Islamic Bank in 1983 (Ariff, 1988). Since then the Islamic finance system started to grow and some of the banks mn the full fledge Islamic banking system and almost all the conventional banks offer the Islamic banking system outlets, along with the conventional system. Now, the Islamic banking system caters not only for Muslims, but the non-Muslims as well (Venardos, 2011). The world financial crisis which began in 2007 and worsened by the year 2011 prompted the study to be conducted. The aim of the study was to know whether the young generation were attracted to the Islamic banking system which has been widely promoted to be resilient to the economic crisis.

The Islamic banking system in the form of Islamic banks and the off shoot of the finance system such as The Islamic Mortgage system and The Islamic Insurance system have grown and expanded in Malaysia in the recent years (Ang, 2008). The interest on the Islamic banking system has been bolstered by the recent financial crisis in Europe as well as in the United States. The Islamic banking system has also expanded rapidly throughout the world (Greuning & Iqbal, 2008).

The first Islamic Bank in Malaysia was established in 1983 and in 1993 the Islamic banking outlets began to be offered by many other conventional banking system (El-Tiby, 2010). Among the conventional banks which offered the Islamic banking outlets are the CIMB bank, MayBank, The Bank Simpanan Nasional (BSN) and many others, while the Muamalat Bank and Bank Islam operate on the full fledge Islamic system. While the Islamic banking system represents a fraction of the global banking market, it has grown at double-digit rates in recent years (Elasrag, 2014). By some estimates, total assets held globally under Islamic banking system reached USD1 trillion in 2010. Islamic banks have appeared to be more resilient than conventional banks to the immediate effects of the international financial crisis and global economic downturn (Elasrag, 2014). The interests in the Islamic banking system spiked especially within the last two decades of the 20th century because of the problems faced by the conventional banking system. …

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