FACTORS INFLUENCING A CUSTOMER'S INTENTION TO TOWARDS INTEREST-FREE BANKING: A STUDY ON FULLY FLEDGED INTEREST FREE BANKS IN WERABE TOWN ADMINISTRATIONS

ABSTRACT The advent of an interest-free financial system has added a new dimension to Ethiopia's current economic models and financial developments. Therefore, even though its implementations depend on the consumers' intents, using such a financial system is highly valued. Henceforth, the main objective of this study is to identify the major factors affecting the towards of fully fledged Interest free banking services in Ethiopia in case of Zamzam and Hijira bank in Werabe town administration. The research employed both qualitative and quantitative research approach employed. A purposive sampling technique was employed. A total of 362 respondents were used for this study. Primary data were used with five-point likert scales to collect data from respondents. And the data analyzed through descriptive and inferential statistics using multiple linear regression. The result of the study confirms that religious belief, customer awareness, service quality and socio-culture have a positive and significant impact on customer intention to adopt fully fledged interest-free banking services. Therefore, policy makers need to apply better strategies and create an acceptable understanding of the services, whereas government support is vital and should consider the perceived behavioral control by facility condition while banks should use business intelligence and finally aggressive promotion and marketing campaign to create awareness about the services is important to enhance customer’s intention to adopt fully fledged interest free banking services.