Customer Behaviour on Pawn Broking within Islamic Financial Institution: A study on Amana Bank PLC

Abstract

Introduction: Pawning system, as guaranteeing mechanism for the loan amount given, operated in financial institutions provides a pivotal role in financing to the deficit people in financial ability. This study investigates customer behaviour toward Islamic pawning services (called in Arabic; Ar-Rahn) in Amana Bank PLC located in Sammanthurai area. The study aims to analyse customer behaviour patterns in fully-fledged Islamic financial institution. Research Methods: This study employed a deductive quantitative approach using a structured questionnaire survey. The measurement model consisted of four independent variables: product attributes, service quality, customer knowledge, and Islamic bank image. A total of 259 questionnaires were distributed randomly to customers of Amana Bank PLC in the Sammanthurai area, of which 250 valid responses were used for data analysis. Descriptive statistics, correlation analysis, and multiple regression analysis were performed using SPSS software. Results: Findings revealed that Amana Bank PLC scored higher in all variables, particularly product attributes and Islamic bank’s image significantly influenced customer behaviour while Amana Bank PLC demonstrated stronger service delivery and customer trust. Conclusion: The results emphasize the importance of strong product knowledge, and institutional transparency in influencing customer decisions. The study recommends enhanced awareness programs and marketing strategies to promote Islamic pawning services. Future research could explore broader institutional comparisons and include additional demographic and behavioural variables for deeper insights.