Is Loan Shark an Alternative? The Intentions to Take a Loan from Loan Sharks in Indonesia

Safwan Kamal* -  Faculty of Islamic Economics and Business, IAIN Langsa, Indonesia
Muslem Muslem -  Faculty of Islamic Economics and Business, IAIN Langsa, Indonesia
Mulyadi Mulyadi -  Faculty of Islamic Economics Business, IAIN Langsa, Indonesia
Erne Suzila Kassim -  Faculty of Business and Management, Universiti Teknologi MARA, Selangor, Malaysia
Muhammad Uzair Zulkifly -  Faculty of Management, Durham University, United Kingdom
DOI : 10.22515/shirkah.v7i2.487

Research rarely reaches the discussion of loan sharks. This study describes how intentions are influenced by service, word-of-mouth, and subjective norms, with knowledge of usury acting as a moderating variable. This quantitative study involved 150 respondents. The data collected was analyzed by using structural Equation Modeling (SEM) with SmartPLS 3 Software. According to this study, service significantly affected intention to take a loan from loan sharks but had no influence on word-of-mouth. Though it has no influence on intention, the subjective norm has a significant influence on word-of-mouth. The service on the intention is mediated by word of mouth, which has an influence on the intention. However, word-of-mouth does not act as a mediating variable between subjective norms and intentions. The intention to use the services of loan sharks is significantly moderated by knowledge about usury, which also significantly moderates word-of-mouth and subjective norms. It did not, however, moderate the influence of service on intentions. As a result, it is recommended that the government create Islamic financial institutions not only for the middle class and upper class but also for the lower economic class, which is vulnerable to loan sharks.

Keywords : Islamic Finance; Loan Shark; Intention; Knowledge of Usury

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