Impact of Social and Religious Beliefs on SMEs Intention towards Adoption of Formal Finance: A Proposed Model

  • Rabia Rasheed Universiti Utara Malaysia
  • Maria Abdul Rahman Senior Lecturer, Universiti Utara Malaysia
Keywords: SMEs, Financial, Owner-manager, Intention, Behavior


Purpose: SMEs play an important role towards economic growth by generating employment and alleviating poverty, thus, SMEs importance is more evident in developing countries. Despite major contribution in
economic development, SMEs around the world are facing several challenges including use of formal finance. This study seeks to investigate the impact of both social and religious beliefs of SMEs owner-managers
attitude and their intention towards taking formal finance.

Methods: Qualitative inductive methodology has been applied using literature review.
Results: This study proposed a conceptual framework to elaborate sociocultural factors of owner mangers influencing SMEs' decision making with application of Theory of Reasoned Action.
Implications: Findings of the study will be helpful for the financial institutions to better understand the financial behavior of SMEs owner managers in Pakistan.


Download data is not yet available.

Article Analytics Summary


Ajzen, I. (1991). The theory of planned behavior. Organizational behavior and human decision processes, 50(2), 179-211. DOI:

Ajzen, I., &Fishbein, M. (1980). Understanding attitudes and predicting social behaviour.

Armitage, C. J., & Conner, M. (2001). Efficacy of the theory of planned behaviour: A meta‐analytic review. British journal of social psychology, 40(4), 471-499. DOI:

Aruwa, S. (2013). Financing Options for Small and Medium Scale Enterprises in Nigeria.

Cyril De Run, E., Mohsin Butt, M., Fam, K. S., & Yin Jong, H. (2010). Attitudes towards offensive advertising: Malaysian Muslims' views. Journal of Islamic Marketing, 1(1), 25-36. DOI:

Dawson, C. (2009). Introduction to research methods: A practical guide for anyone undertaking a research project. Hachette UK.

Fishbein, M., &Ajzen, I. (1977). Belief, attitude, intention, and behavior: An introduction to theory and research.

Francis, J. J., Eccles, M. P., Johnston, M., Walker, A., Grimshaw, J., Foy, R., &Bonetti, D. (2004). Constructing questionnaires based on the theory of planned behaviour. A manual for health services researchers, 2010, 2-12.

International Finance Corporation, (2014a). Islamic Banking Opportunities Across Small and Medium Enterprises Pakistan, Retrieved from 12 December, 2015.

Khan, M. M. (2015a). Sources of finance available for SME sector in Pakistan. International Letters of Social and Humanistic Sciences (ILSHS), 6, 184-194. DOI:

Khan, M. W. J., &Khalique, M. (2014c). An Overview of Small and Medium Enterprises in Malaysia and Pakistan: Past, Present and Future Scenario. Business and Management Horizons, 2(2), 38. DOI:

Kirkpatrick, L. A. (2005). Attachment, evolution, and the psychology of religion.Guilford Press.

Koropp, C., Kellermanns, F. W., Grichnik, D., & Stanley, L. (2014). Financial decision making in family firms: An adaptation of the theory of planned behavior. Family Business Review, 27(4), 307-327. DOI:

Kouser, R., Durani, A., Hussain, F. Z., & Hassan, M. (2012).Investigation of Banker’s Lending Criteria to SMEs and Assessment Thereof. International Research Journal of Finance & Economics, 89, 158-186.

Mukhtar, A., &Mohsin Butt, M. (2012). Intention to choose Halal products: the role of religiosity. Journal of Islamic Marketing, 3(2), 108-120. DOI:

Nkuah, J. K., Tanyeh, J. P., & Asante, J. (2013). An Assessment of the Role of Financial Institutions in Financing Small and Medium Enterprises (SME’s) in Ghana. International Journal of Innovative Research and Development, 2(8).

Othman, A., & Owen, L. (2001). Adopting and measuring customer service quality (SQ) in Islamic banks: a case study in Kuwait finance house. international journal of Islamic financial services, 3(1), 1-26.

Robu, M. (2013). The Dynamic And Importance Of SMEs In Economy. The USV Annals of Economics and Public Administration, 13(1 (17)), 84-89.

Sherazi, S. K., Iqbal, M. Z., Asif, M., Rehman, K., & Shah, S. S. H. (2013).Obstacles to Small and Medium Enterprises in Pakistan.Principal Component Analysis Approach. Middle-East Journal of Scientific Research, ISSN 1990,9233, 1325-1334.

Singh, S., Srivastava, V., & Srivastava, R. K. (2010). Customer acceptance of mobile banking: A conceptual framework. Sies journal of management,7(1), 55.

State Bank of Pakistan,(2010). State Bank of Pakistan Policy and Regulation. Karachi: State Bank of Pakistan.

State Bank of Pakistan,(2015a). National Financial Inclusion Strategy Pakistan. Karachi: State Bank of Pakistan.

State Bank of Pakistan,(2015b). Quarterly SME Finance Review: Infrastructure, Housing & SME Finance Department. Karachi: State Bank of Pakistan.

Tara, N., Irshad, M., Khan, M. R., Yamin, M., &Rizwan, M. (2014). Factors Influencing Adoption of Islamic Banking: A Study from Pakistan. Journal of Public Administration and Governance, 4(3), 352-367. DOI:

Venkatesh, V., Morris, M. G., Davis, G. B., & Davis, F. D. (2003). User acceptance of information technology: Toward a unified view. MIS quarterly, 425-478. DOI:

WakhidS.C.,&Efrita S. (2007). Adapting Islamic Banks’ CARTER model: an empirical study in Riau’s Syariah Banks, Indonesia.

Yu, C. S. (2012). Factors affecting individuals to adopt mobile banking: Empirical evidence from the UTAUT model. Journal of Electronic Commerce Research, 13(2), 104.

How to Cite
Rasheed, R., & Rahman, M. A. (2016). Impact of Social and Religious Beliefs on SMEs Intention towards Adoption of Formal Finance: A Proposed Model. Journal of Business and Social Review in Emerging Economies, 2(2), 167-174.