The psychology of the afterlife and Islamic financing adoption

What is it about?

In general, Muslims are observant of permissible (halal) and forbidden (haram) actions in their daily lives. They believe their good deeds will lead to paradise in the afterlife, while the worst sinners will go to hell. Most people observe these requirements in food and body-based consumption (e.g., cosmetics, pharmaceuticals, apparel), but they are less prevalent in financial services-based consumption. While assets are increasing, many Muslims continue to rely on conventional bank loans. As Islam forbids usury (riba), this situation warrants an investigation to ascertain if faith in the afterlife and Sharia compliance play substantial roles in consumer religious-based purchase decisions. Through a field survey, we have found that afterlife hope and fear expectations help to shape their psychological assessment in terms of validating the threat and forming the right response to counter the threat—despite its existence in an otherworldly realm. These psychological factors, in turn, stimulate their intention to adopt Islamic financing products.

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