Customer Preferences in selection of Islamic and Conventional Banking in Pakistan. Muhammad Zeeshan

This study has analyzed the preferences of customers of both Islamic and conventional banking in Pakistan. The conventional baking is interest-based banking system whereas Islamic banking is based on profit and loss sharing. Islamic banks make investment only in halal business permitted by shariah. In this study, we collected primary data from 200 customers of both type of banking. The age groups of respondents were 23-42 years. The customers having bachelor qualification are in majority in the respondents of conventional banks and the customers having master qualification are in majority in Islamic banking. The most frequent income group of customers of conventional banks is income group of Rs. 20,001/- to Rs. 30,000/- and in Islamic banks is Rs. 30,001/- to Rs. 40,000/-. We have used 5-point Likert Scale to measure preferences of customers. According to our empirical results, we find that first category of customers of Islamic banks prefers Islamic banks for its prompt services. The second category of customers prefers Islamic banks for its highly standardized and simple process and quick delivery of services. Third category of customers prefers Islamic banks for safety and security. Similarly, first category of customers of conventional banks prefers conventional banks for its safe and secure transactions. The second category of customers prefers conventional banks for its fool proof procedures. Third category of customers prefers conventional banks because of well atmosphere.