• ISSN: 2010-023X
    • Frequency: Bimonthly
    • DOI: 10.18178/IJTEF
    • Editor-in-Chief: Prof.Tung-Zong (Donald) Chang
    • Executive Editor: Ms. Cherry L. Chen
    • Abstracting/ Indexing: Engineering & Technology Digital Library, ProQuest, Crossref, Electronic Journals Library, DOAJ , EBSCO, and Ulrich's Periodicals Directory
    • E-mail: ijtef@ejournal.net
IJTEF 2014 Vol.5(6): 526-529 ISSN: 2010-023X
DOI: 10.7763/IJTEF.2014.V5.427

Islamic Banking in Malaysia: A Sustainable Growth of the Consumer Market

Ching Wing Lo and Chee Seng Leow
Abstract—For the past 3 decades, the Malaysian Islamic banking sector has been growing rapidly with an average of 18% growth per annum in terms of assets since 2000. As at 2013, Malaysia continued to record substantial achievement with a total asset of RM426.16 billion which represent about 13% of the total global Islamic banking assets, behind only to Iran and Saudi Arabia. However, if compare to conventional banking sector in terms of assets and customers size, the Malaysian Islamic banking sector is considered at its infancy stage. This is mainly due to the late establishment of Islamic concept into the banking system. Although the general awareness towards Islamic banking in Malaysia is considered at acceptable level, in terms of assets, financing and deposits the Islamic banking sector only captured about 13%-14% of the total banking markets share which is still far fetch from the conventional banking sector. Nevertheless, the consumer market still provides great opportunity for the Islamic banks to target on for more profitability. Therefore, Islamic banks should formulate strategies to educate and attract more consumers to use Islamic banking products. The objective of this short paper is to discuss on the sustainable growth of the Islamic banking consumer market in Malaysia in order to identify a research gap. The research methodology is based on analytical literature review. It is found that lack of studies was conducted on customer perceptions. In the conclusion, this paper strongly recommended more empirical studies on customer perceptions towards Islamic banking in Malaysia should be conducted immediately.

Index Terms—Islamic banking, consumer market, sustainable growth, customer perceptions.

Ching Wing Lo is with Labuan Faculty of International Finance, Universiti Malaysia Sabah, Labuan International Campus, W.P. Labuan, Malaysia (e-mail: ebryanlo@gmail.com).
Chee Seng Leow is with IIC University of Technology, Phnom Penh, Cambodia (e-mail: drleowcs32@gmail.com).

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Cite: Ching Wing Lo and Chee Seng Leow, "Islamic Banking in Malaysia: A Sustainable Growth of the Consumer Market," International Journal of Trade, Economics and Finance vol.5, no.6, pp. 526-529, 2014.

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