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Purpose The research paper is an effort to find out the behavior of Pakistani individuals toward usage of Takaful insurance. This paper aims to identify the factors, which influence investors’ intention toward the adoption of Takaful. Islamic finance is growing rapidly in the international market, especially in Islamic countries. Pakistan is an Islamic country, where the majority of the population is Muslim. Therefore, there is a great potential for Takaful exists in the country. Design/methodology/approach Both explanatory and descriptive research designs used for the research framework. The theory of planned behavior is the base theory and the model incorporates several factors such as relative advantage, compatibility, social influence, awareness and religiosity that may influence the adoption of Takaful. The primary data collected through the distribution of self-administered survey-based questionnaire, containing 23 items scaled at a five-point Likert scale. The non-probability snowball sampling and judgmental sampling techniques are used due to the scarce of Takaful users. The sample consists of 345 individuals (127 Takaful users and 218 non-users) living in the three main cities, namely, Karachi, Lahore and Islamabad. The data are further analyzed and interpreted with IBM SPSS 21. The results are evaluated using descriptive statistics, reliability, confirmatory factor analysis, correlation and binary logistic regression models. Findings The research findings reveal that factors such as relative advantage, compatibility, social influence, awareness and religiosity have a significant impact on the behavioral intention of Takaful amongst a depicted sample of Pakistani people. Similarly, Takaful has great potential in the Pakistani market, but due to lack of awareness, Takaful share is far behind than conventional insurance. It is further suggested that Takaful operators must devise some policies and plan to spread awareness about Takaful and come up with more innovative products. Practical implications The Takaful operators must devise plans to aware people about Islamic insurance. The study provides implication to Takaful management; Takaful users; and more importantly, the regularity authorities to operate and successfully conduct Takaful applications. Further, they should advance Takaful operations and produce more innovative products. The study focuses on some factors while there are plenty of others, which should be studied accordingly. For future researchers and students, there is a great potential of other techniques and measures, which can be further used for analysis of Takaful business. Originality/value This research is a first attempt to trace out the behavior of Pakistani people about Takaful, using the above discussed factors. The behavioral intention is studied using users and non-users combination, which is never done before in the current setting.
Hassan et al. (Mon,) studied this question.