The effect of Islamic finance literacy on participation bank choice: Batman University example

This study investigates the impact of Islamic financial literacy on the preference for participation banks among academic and administrative staff at Batman University. The primary aim is to explore how individuals’ knowledge of Islamic finance influences their inclination toward interest-free banking institutions. The research was designed using a relational survey model and conducted within the framework of quantitative research methods. A 38-item Likert-type scale was developed as the data collection tool. The scale demonstrated high internal consistency, with a Cronbach’s Alpha value of 0.955. Moreover, Exploratory Factor Analysis (EFA) confirmed the construct validity of the instrument. The sample consisted of 269 participants employed at Batman University. Data were analyzed using SPSS and Python tools. The findings indicate that participants generally possess a moderate level of both general financial literacy and Islamic financial literacy. A positive and significant correlation (r = 0.64) was found between Islamic financial literacy and preference for participation banks. Regression analysis revealed that Islamic financial literacy accounts for 40.8% of the variance in bank preference (R² = 0.408). Additionally, t-tests and ANOVA analyses identified statistically significant differences across certain demographic groups. In conclusion, it is recommended that participation banks enhance public awareness and educational initiatives to improve Islamic financial literacy across various segments of society.