BEHAVIOURAL INTENTION DETERMINANTS OF BUSINESS TAKAFUL ADOPTION AMONG MICROENTERPRISES

Abstract

This study investigates the determinants influencing microenterprises' propensity to adopt business Takaful, a form of Islamic insurance, through the lens of the Theory of Planned Behaviour (TPB). The TPB posits that individual behaviour is primarily driven by three key components: attitudes (ATT), subjective norms (SN), and perceived behavioural control (PBC). In this research, we employed Partial Least Squares Structural Equation Modelling (PLS-SEM) to analyse a dataset collected from microenterprise owners, focusing on their intentions (INT) to engage with Takaful products. Our analysis revealed that PBC emerged as the most significant predictor of INT, indicating that microenterprise owners who perceive a higher level of control over their ability to adopt Takaful are more likely to express intentions to do so. Conversely, the roles of ATT and SN were found to be non-significant in influencing INT, suggesting that factors such as personal beliefs about Takaful and the influence of social pressures may not play as critical a role in this context as previously assumed. These findings have substantial implications for policymakers and practitioners seeking to enhance the uptake of Islamic financial products among microenterprises. By understanding the pivotal role of perceived behavioural control, stakeholders can design targeted interventions that empower microenterprise owners, thereby fostering a more conducive environment for the adoption of Takaful. Furthermore, this research contributes to the existing literature on Islamic finance and microenterprise development by elucidating the psychological factors that underpin financial decision-making in this sector. In conclusion, this study underscores the necessity for a nuanced approach to promoting Takaful, emphasizing the importance of enhancing perceived behavioural control among microenterprise owners as a strategic pathway to increase adoption rates. Future research should explore additional variables that may influence the adoption of Takaful, as well as the potential impact of cultural, intervention and contextual factors on the TPB framework in the realm of Islamic finance.