The effect of Sharia financial literacy, religiousness, and perceptions of confidence on saving decisions at Islamic banks

Abstract

Indonesia is a country with a majority Muslim population, so in economic activities, people tend to follow sharia principles. Islamic banks, which operate based on Islamic law, play an important role in providing sharia-compliant financial products. However, despite the majority of the population being Muslim, the use of Islamic banks is not yet widespread, including in educational institutions such as Islamic boarding schools. Islamic boarding schools teach religiosity and Islamic economics to their students, but many students still choose conventional banks. This study aims to analyse the effect of Islamic financial literacy, religiosity, and perceived confidence on saving decisions in Islamic banking among students of Al-Hadi Student Boarding School, Yogyakarta. This study uses quantitative methods with primary data collection through questionnaires distributed to 55 respondents. Data analysis was carried out using the classical assumption test and hypothesis testing. The results showed that Islamic financial literacy and religiosity had a significant effect on the decision to save in Islamic banking, while perceived confidence had no significant effect. Simultaneously, these three variables affect the decision to save by 54.6% with 45.4% influenced by other variables not studied.