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The copyright © of this thesis belongs to its rightful author and/or other copyright owner. Copies can be accessed and downloaded for non-commercial or learning purposes without any charge and permission. The thesis cannot be reproduced or quoted as a whole without the permission from its rightful owner. No alteration or changes in format is allowed without permission from its rightful owner.

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AWARENESS ON CONTENT OF AQAD IN ISLAMIC FINANCIAL CONTRACTS AMONG SECONDARY SCHOOL TEACHERS IN PADANG

TERAP, KEDAH

BY

NOR AMIRA SHAFINAZ BINTI MUSHADDAD

Researcher paper submitted to Othman Yeop Abdullah School of Business

Universiti Utara Malaysia Master in Islamic Finance and Banking

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i

PERMISSION TO USE

In presenting this research paper in partial fulfillment of the requirements for a Post Graduate Degree from Universiti Utara Malaysia (UUM), I agree that the library of this university may make it freely available for inspection. I further agree that permission for copying of this project paper in any manner, in whole or in part, for scholarly purposes may be granted by my supervisor or, in their absence, by the Dean of Othman Yeop Abdullah Graduate School of Business. It is understood that any copying or publication or use of this research paper or parts of it for financial gain shall not be allowed without my written permission. It is also understood that due recognition given to me and to the Universiti Utara Malaysia in any scholarly use which may be made of any material for my research paper.

Request for permission to copy or to make other use of materials in this research paper, in whole or in part should be addressed to:

Dean of Othman Yeop Abdullah Graduate School of Business Universiti Utara Malaysia

06010 UUM Sintok Kedah Darul Aman

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ii ABSTRACT

This research focuses on the awareness on content of aqad in Islamic financial contracts among secondary school teachers. It is intended to measure the factors that might affect the teachers‟ awareness which include knowledge and religious obligation towards content of aqad in Islamic financial contracts. This study examines the relationships between the awareness with all the mentioned factors earlier. A purposed theoretical framework has been developed in this study in order to illustrate the whole research area.

Hypothesized relationships are tested using survey responses from a sample of 260 respondents which consist of the Muslim teachers that teach at secondary school in Padang Terap district. Results revealed a positive relationship between all the independent variables with the awareness. In addition, all of the variables also had given influenced towards the awareness. The results reported in this research are useful to both industry and academics by providing relevant exploratory data about the awareness. The result should be able to recommend some suggestion on how to improve the awareness among secondary school teachers.

Keywords: Awareness, Content of Aqad, Secondary School Teachers, Islamic Financial Contracts

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iii ABSTRAK

Kajian ini memfokuskan kepada kesedaran tentang kandungan aqad dalam kontrak kewangan Islam di kalangan guru sekolah menengah. Ia bertujuan untuk mengukur faktor-faktor yang mungkin mempengaruhi kesedaran guru yang termasuk pengetahuan dan kewajipan keagamaan terhadap kandungan aqad dalam kontrak kewangan Islam.

Kajian ini mengkaji hubungan antara kesedaran dengan semua faktor yang yang telah dinyataka. Rangka teori yang dicadangkan telah dibina dalam kajian ini untuk memberi gambaran bagi keseluruhan penyelidikan. Perhubungan yang dihipotesiskan diuji menggunakan maklumbalas kaji selidik daripada sampel 260 responden yang terdiri daripada guru-guru Islam yang mengajar di sekolah menengah di daerah Padang Terap.

Analisis mendapati bahawa terdapat hubungan yang positif diantara semua semua faktor yang dinyatakan dengan kesedaran. Selain daripada itu, kesemua faktor tersebut mempengaruhi kesedaran. Hasil kajian yang dibentangkan ini adalah berguna untuk kegunaan industri serta akademik dengan menyediakan data yang relevan mengenai kesedaran. Hasilnya kajian juga mengutarakan beberapa cadangkan tentang bagaimana untuk meningkatkan kesedaran di kalangan guru sekolah menengah.

Kata kunci: Kesedaran, Kandungan Aqad, Guru Sekolah Menengah, Kontrak Kewangan Islam

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ACKNOWLEDGEMENT

First of all, I would like to thank to Allah for the blessing and giving me strength of mind, spirit, ability and guidance for me to go through all the journeys in completing this research paper. With the help and permission of Allah, I succeeded in finishing this research paper. Working for this Master‟s degree is a journey towards accomplishing on of my lifetime objectives, which has been made possible by direct and indirect assistance from various parties.

Many thanks must first go to my supervisors, Dr Ahmad Khilmy Abdul Rahim for giving me the unwavering guidance, insights, moral support and the direction throughout the whole process of completing this research paper. Secondly, my appreciation is also due to my respected advisor, Assoc. Prof. Dr. Abu Bakar Hamed for his professional and untiring guidance. I am very indebt to their patience and unwavering advices that inspired me to think positively to finish my research paper. Without their understanding, consideration and untiring advice this research paper would not have been completed successfully. May Allah compensate all of them for sacrificing time and sharing their knowledge.

Special dedicated to my beloved parents, Mushaddad bin Daud and Pauziyah binti Yahya for their endless support, loves and cares. To my sister, Nor Amira Syuhada and to all my brothers, Muhammad Ikhwan Solihin, Muhammad Noor Iman and Muhammad Irfan Solehan who understands my passions and financially supports my duty from the starts till the end.

Last but not least to all my dearest fellow friends who never give up giving me support, information and assistance to settle up this research paper. Thank you very much for all and best of luck. A word of thank also extends to all respondents of this study. Any other individual whom I have not mention or recognized by name but who gave their support and cooperation, I give my sincere thanks.

May Allah S.W.T reward the kindness to everyone that I mentioned above.

Nor Amira Shafinaz binti Mushaddad Master of Islamic Finance and Banking Universiti Utara Malaysia

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v

TABLE OF CONTENTS

PERMISSION TO USE ... i

ABSTRACT ... ii

ABSTRAK ... iii

ACKNOWLEDGEMENT ... iv

LIST OF TABLE ... ix

LIST OF FIGURE... x

LIST OF ABBREVIATIONS ... x

CHAPTER ONE ... 1

1.0 Introduction ... 1

1.1 Background of study ... 1

1.2 Research problem... 1

1.2.1 Research question ... 6

1.2.2 Research objective... 7

1.3 Significant of the study ... 8

1.4 Scope of the study ... 9

1.5 Organization of study ... 9

1.6 Summary ... 10

CHAPTER TWO ... 12

2.0 Introduction ... 12

2.1 Theoretical framework ... 12

2.2 Awareness of content of aqad in Islamic financial contracts ... 14

2.3 Knowledge towards the content of aqad in Islamic financial contracts ... 16

2.4 Religious obligation towards the content of aqad in Islamic financial contracts ... 17

2.5 Hypotheses development ... 19

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2.5.1 Selected demographic factors... 19

2.5.2 Correlation between dependent and independent variable ... 22

2.5.3 Influence of independent variable and dependent variable ... 23

2.6 Summary ... 23

CHAPTER THREE ... 24

3.0 Introduction ... 24

3.1 Research design ... 24

3.2 Sampling design ... 25

3.2.1Population... 25

3.3 Measurement of variable... 26

3.3.1 Awareness on content of aqad in Islamic financial contracts ... 27

3.3.2 Knowledge ... 28

3.3.3 Religious Obligation ... 29

3.4 Question development ... 31

3.5 Pilot study ... 33

3.6 Factor analysis ... 34

3.6.1 Factor analysis for awareness variable ... 35

3.6.2 Factor analysis for knowledge variable ... 36

3.6.3 Factor analysis for religious obligation ... 37

3.7 Data collection method ... 38

3.8 Data analysis ... 39

3.8.1 Reliability test ... 39

3.8.2 Normality ... 41

3.9 Descriptive statistics ... 41

3.9.1 T-test... 42

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3.9.2 ANOVA ... 43

3.9.3 Correlation ... 43

3.9.4 Regression ... 44

3.10 Conclusion ... 44

CHAPTER FOUR ... 45

4.0 Introduction ... 45

4.1 Responds rate ... 45

4.2 Demographic profile of respondent ... 45

4.3 Descriptive Statistic for Each Variable ... 47

4.3.1The difference between gender and awareness ... 48

4.3.2 The difference between age group and awareness ... 50

4.3.3 The difference between marital status and awareness ... 51

4.3.4 The difference between highest educational level and awareness ... 52

4.3.5 The difference between monthly income and awareness ... 53

4.3.6 The difference between experience dealing with Islamic banking and awareness ... 54

4.3.7 The difference between pillar of aqad and awareness ... 55

4.4 Correlation between awareness and factors affecting awareness ... 57

4.5 The influence of determinant factors on awareness ... 58

4.6 Conclusion ... 60

CHAPTER FIVE ... 62

5.0 Introduction ... 62

5.1 Discussion ... 62

5.2 The differences between the demographic factors towards awareness on content of aqad... 62

5.3 Relationship between the determinants factors towards awareness ... 64

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5.4 Contribution of the study ... 64

5.5 Limitation of study ... 66

5.6 Recommendation ... 66

5.7Conclusions ... 67

REFERENCES ... 68

APPENDIX A ... 73

APPENDIX B ... 79

APPENDIX C ... 86

APPENDIX D ... 94

APPENDIX E ... 98

APPENDIX F... 108

APPENDIX G ... 121

APPENDIX H ... 123

APPENDIX I ... 129

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LIST OF TABLE

Table 3.3.1 List of Questions for Awareness 28

Table 3.3.2 List of Questions for Knowledge 29

Table 3.3.3 List of Questions for Religious Obligation 30

Table 3.3.4 List of Author for each variable 31

Table 3.4 Question Development 32

Table 3.8.1 Results of Reliability Test 40

Table 4.2 Results Demographic Profile 46

Table 4.3 Results for each variable 48

Table 4.3.1 The results between Gender and Awareness

Table 4.3.2 The results between Age Group and Awareness 50 Table 4.3.3 The results between Marital Status and Awareness 51 Table 4.3.4 The resulst between Highest Educational Level and Awareness 52 Table 4.3.5 The results between Monthly Income and Awareness 53 Table 4.3.6 The results between Experience dealing with Islamic banking 54 and Awareness

Table 4.3.7 The results between Pillar of aqad and Awareness 55

Table 4.4 Results of Correlation 57

Table 4.5 Results of Influence 59

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x

LIST OF FIGURE

Figure 2.1 Theoretical Framework 13

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xi

LIST OF ABBREVIATIONS

ANOVA Analysis of Variance BIMB Bank Islam Malaysia Berhad CLJ Current Law Journal

MLJ Malaysia Law Journal

SMK Sekolah Menengah Kebangsaan DV Dependent Variable

IV Independent Variable KMO Kaiser-Mayer-Olkin

MIFB Master of Islamic Finance and Banking SPSS Statistical Package for Social Science UUM Universiti Utara Malaysia

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CHAPTER ONE INTRODUCTION

1.0 Introduction

This research paper will discuss the awareness of content of aqad in Islamic financial contract among the secondary school teachers. This chapter includes the background of the study, the problem statement of this research, the research question, the research objective, potential significant of this study, the scope of the study, and the limitation of this study. The organization of this dissertation is also included in this chapter.

1.1 Background of study

Islamic law covers the whole of the principles of social justice including legal aspects, rules and regulations that are in line with Islamic law. All elements contrary to syarak must be avoided. Profit gain through legal sale is kosher and instead gains earned through usury and haram. The establishment of Lembaga Urusan Tabung Haji (now known as Lembaga Tabung Haji) in 1963 was the first step in the development of Islamic Financial institutions in Malaysia. In essence, the institution is to provide convenience for Muslims to make savings in the provision of pilgrimage. In fact, this institution is the first step in the implementation of the Islamic financial system in Malaysia (Ibrahim, 2000).

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This was followed by the establishment of Bank Islam Malaysia Berhad (BIMB) on 1 July 1983. Next was the setting up of Takaful Malaysia Berhad Company in 1984. Not only does Bank Islam Malaysia Berhad offer Islamic banking products, other financial institutions such as Bank Muamalat, Hong Leong Bank, Maybank and others, also offering Islamic banking products to its customers such as murabaha, mudharabah, musyarakah, ijarah, bai 'bithaman ajil and so on are being introduced (Akautan Nasional, 2000).

The word al-bai '(sale) in terms of language means a change of goods with other goods.

From an Islamic term, al-ba’i 'has many meanings given by scholars. According to the Hanafi school, buying and selling is an exchange of property with a property of another in a particular manner. Or change something that is favorable to something else that is likewise favored in a particular way that is advantageous with an offer or demonstration.

According to the Syafie sect, buying and selling is an exchange of property with other property, it can be done with consent and qabul according to the manner permitted by syarak (al-Husaini and Muhammad, 2005). Al-Bai' is also swap contracts possessions give someone the right to have a thing or benefits forever, not with the intention of al- qurbah (assist to Allah) (Syamsuddin and Asy-Syarbini, 1997).

Islam has required and introduced various contracts which have been partially enforced in today's legislation in various aspects from the past. Aqad becomes the basis of muamalat activities and this also involves Islamic banking which offers Islamic finance contracts.

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The establishment of Bank Islam in 1983 began to alter the contract law in Malaysia, but it has made it a catalyst for the development and progression of some Islamic contracts, whereas consumers have begun to choose whether to use Islamic or conventional contracts in their dealings.

Aqad in Arabic language has many meanings which is promises, assurance, belief and ties (whether true bonds such as bonding or symbolic bonds such as ijab and qabul bonds in the sale and purchase agreement). In Kamus Dewan gives the meaning of the covenant as promises and agreement. The word of aqad is a word synonymous with a contract terms. Aqad in fiqh is the bond between ijab and qabul made in the manner prescribed which sanctioned the effect on the item. In other words, aqad involves the dependence of one of the parties who are engaged in the talk of the other party, in accordance with the provisions of Islam that will bear the effect on the fabricated goods (Al-Zuhaily, 2002) and Dewan Bahasa and Pustaka. In terms of law, contracts are defined as all agreements are contracts if made on the basis of the parties' free will, for a legitimate consideration, and with a legitimate purpose (Contract Act, section 10 (1)).

This study was conducted to fill in the gap on the awareness of teachers towards content of aqad in Islamic financial contract. From the researcher observation most of the banks‟

clients do not take much time to read their contract before sign it. It is expected to foresee the matters that can influence the teachers‟ awareness on the content of aqad in Islamic

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financial contract. In generally, there two known matters that effect the awareness namely knowledge and religious obligation.

1.2 Research problem

The existence of contracts based on Islamic law offered through the Islamic banking system shows that there are has Muamalah Law in Malaysia. Among the contracts are the formations of mudharabah, musyarakah, wadiah, bai 'bi-thaman' ajil and so on.

Similarly, the existence of an insurance scheme that applies to Sharia’h law like Takaful (Bakar,1998). In a view of this projection and future needs, the awareness of content of aqad in Islamic financial contract are vital to obtained and studied. This is because a lot of contracts were offered by Islamic banking however the customer itself does not understand the content of the contract and that may not met the pillar of aqad. According to Rahman (2009) stated that almost 80% of the individuals admit not to read the contents of the contract and are unable to understand the contents. Here arises a new problem.

Formerly only available conventional banks, now have established Islamic banks.

Unfortunately, after aqad or Islamic contract exists, the customer does not read and understand it before lowering the signature of the agreement.

In Surah Al – Maidah verse 1:

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Al-uqud is a plural of al-'aqdu which means binding something with something, then used for the meaning of the contract in the sale, wedding contract, and so forth. Sell for example, is a form of contract that makes the goods he buys into his possession and can have full control over their usage and utilization. Au’fuu is giving something perfectly.

This verse shows how much the Quran really emphasizes to fulfill the covenant or promise perfectly. With the fulfillment of the contract it will provide a safe and happy because of the absence of a burden between the parties involved in the contract (Al- Mubarakpuri, 2003). It is including that the both parties need to understand the contract before signing it. However, people nowadays did not act like those especially Muslim which is they signing the contract without read or try to understand it first.

Sovern, Greenberg, Kirgis and Liu (2015) in their research on the empirical study towards the extent to which customers are aware of and understand the effect of arbitration clauses in consumer contracts. The online survey have been run to the 668 customers, approximately it reflecting the population of adult Americans according to their race/ethnicity, level education, amount of family income and their age. The result after done the survey has shown that a profound lack of understanding regarding the existence and effect of arbitration agreements among customers. There are 43% of the customers recognized that the sample contract included an arbitration clause, meanwhile there are about 61% of those believed that customers would, nevertheless have a right to have a court decide a large dispute too large for a small claims court. The remaining percent which is 9% realized that the contract had both an arbitration clause and that it

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would prevent consumers from proceeding in court. Unfortunately, the bankers also do not explain the content of the contract to the customer.

There are few cases happened in the past between Bank Islam Malaysia Berhad vs Adnan Bin Omar (Kuala Lumpur High Court Civil Suit No S3-22-101.91) (BBA) and Dato „ hj. Nik Mahmud Bin Daud vs Bank Islam Malaysia Berhad (4 MLJ 295, 1996).

Through this, the researcher has a question where, who is the one will be carry the burdens whether banks or banks‟ client if the both parties not read or tries to understand the contract. It is bankers‟ duty to explain the contents of the contract to customer, however, that not happened.

1.2.1 Research question

The key research questions to be addressed are as follows:

1. Is there any significant difference among groups in demographic factors (gender, age, marital status, highest educational level, monthly income, experience dealing with Islamic banking and contract ever filled) with awareness of content of aqad in Islamic financial contracts?

2. What is the correlation between the awareness of content of aqad in Islamic financial contracts among secondary school teachers and their knowledge and religious obligation?

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3. To what extent do knowledge and religious obligation influence the awareness of content of aqad in Islamic financial contracts among secondary school teachers?

1.2.2 Research objective

The objectives of this study are as follows:

1. To determine the difference among groups in demographic factors (gender, age, marital status, highest educational level, monthly income, experience dealing with Islamic banking and contract ever filled) with awareness of content of aqad in Islamic financial contracts.

2. To investigate the correlation between the awareness of content of aqad in Islamic financial contracts among secondary school teachers and their knowledge and religious obligation.

3. To determine the influence of knowledge and religious obligation on awareness related to content of aqad among secondary school teachers.

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8 1.3 Significant of the study

The study is important for several reasons. It will provide important information to the banks and the banks‟ client in order to take precaution towards awareness of content of aqad in Islamic financial contracts. This research will directly or indirectly benefit several parties that involve in this study which included:

This study will facilitate the respondents (teachers) in identifying their awareness on content of aqad in Islamic financial contracts. Besides, it also identifies the level of knowledge among teachers whether they take serious or not regarding Islamic financial contracts.

This study also significance to the bank itself, where the bank can give accurate information and explanation on the contract to the customers that have been offered by banks, especially for the teachers and it also can create a sense of the trustworthines between the customer and the banks. In addition, this type of research will help the Islamic banks improve its volume in order to become more competitive and acceptable by customers.

This study will also help the student in the future especially those who want pursue their study that related to Islamic finance and banking. The higher education institution can take this study as benchmark in having better Islamic finance and banking course in

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future. For instance, narrow the gap between real practice and theory that have been taught in the class, so the student will have better knowledge in future.

1.4 Scope of the study

The study involved the respondents from teachers in district of Padang Terap which is allocate in the northern part of peninsular of Malaysia in Kedah. Specially, the study focused on secondary school teachers who are teaching in secondary school in the district of Padang Terap. It consists of 9 secondary schools that have 497 teachers who are teaching there. The school is SMK Dato Syed Ahmad, SMK Naka, SMK Kuala Nerang, SMK Lubuk Merbau, SMK Pedu, SMK Padang Terap, Maktab Mahmud Padang Terap, SMA Daril Ikhtisam and SMA As-Islahiah Al-Islamiah. This study used the quantitative research method utilizing a set of questionnaires the will distributed among respondents.

1.5 Organization of study

This thesis is organized into 5 chapters:

Chapter 1: This chapter is about background of this study, research problem, research questions, research objectives, significance of study, scope of study as well as organization of remaining chapters.

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Chapter 2: This chapter contains the theoretical frameworks which are the main component of this study. Follow by the literature reviews to support the variables. The reviews discuss on the awareness on content of aqad in Islamic financial contracts. This chapter also discusses all factors that might affect the awareness among teachers. Finally, the chapter presented the hypotheses development.

Chapter 3: this chapter provides the methodology used where the research design, sampling, measurement of variables, questions development, pilot study, factor analysis, data collection method for this study as well as data analysis regarding the place or the area that will be done. In addition, this chapter is about how the questions will be develop and it will be tested whether it can proceed or not for this research.

Chapter 4: This chapter will summarized all the result of the study, the respondents‟

demographic profile, descriptive analysis, validity and reliability analysis of the variables as well as the result of the hypotheses study are also presented.

Chapter 5: This chapter provided the discussion and followed by the recapitulate of the study findings. Implications, study limitations and recommendation for the future research also have been discussed in this chapter.

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11 1.6 Summary

It can be concluded that, this chapter provides the comprehensive scenario regarding to the background of research concern. Therefore, a literature review on previous researches related to current study will be discussed in the next chapter.

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CHAPTER TWO LITERATURE REVIEW

2.0 Introduction

This chapter includes a review of relevant published research articles related to awareness, knowledge and religious obligation of secondary school teachers towards content of aqad in Islamic financial contracts. In addition, this chapter also explains and elaborates on research framework and hypotheses development.

2.1 Theoretical framework

Sekaran (2003) stated that the theoretical framework is the conceptual model of how one theorized or logically plausible relationship between several factors or matters that have been identified as important for the study area. A theoretical framework authorized the researcher to hypothesize or propose as well as to test the relationship between the variable involved in order to amplify the understanding of the related researcher or study.

This study investigates awareness on content of aqad in Islamic financial contract among secondary school teachers and the purposed theoretical framework is as shown in figure 2.1.

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13 Figure 2.1

Theoretical framework

In this study, to create the connection between one variable to another variables, the theoretical framework are needed to make it happened. Therefore, under theoretical framework, there are two variables used which is dependent variable (DV) and independent variable (IV). Variables are anything that can take different or changing values. Meanwhile, the dependent variable is the main variables to researcher to study.

The independent variable can affect the dependent variable whether in positive or negative approach (Sekaran, 2003). Thus, it can be concluded that, when there is positive value or increase in the independent variable, the dependent variable would also increase and give a positive value based on the result of the independent variable.

This study is expected to have three variables which are awareness, knowledge and religious obligation. Awareness of teachers on content of aqad in Islamic financial contract would be dependent variable which will become the principle factor throughout

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this study. Meanwhile, the other variables which are knowledge and religious obligation would act as dependent variables that can affect the awareness.

Clear understanding of the knowledge and religious obligation will help both parties which are Islamic financial institution especially in Islamic banking sector and customer to take seriously in fulfill the contract based on sharia’h.

2.2 Awareness of content of aqad in Islamic financial contracts

A research‟s run by Gerrard and Cunningham (1997) where they investigated the awareness of Muslim customers in Singapore towards the Islamic banking product and its different services. They found that there was general lacks of awareness of the custom, which mean that technically they do not know what contract they involve in their transactions because the contract itself has the name of the products those customers apply from Islamic banks. In other study conducted by Sovern et al., (2015) stated that only 60% read the contract less than 3 minutes. Through that research, it showed that Muslims, in contrast to non-Muslims, were more aware of the culture of Islamic banking and there were also more aware of the meaning fundamental term used in Islamic and Islamic banking and finance. Therefore, it is logical that the outcome for their research reflect that the non-Muslims had little awareness of the meaning of fundamental term in Islam with only 0.6% of the answer accurately describing the term of riba follow by 2 % accurately describing Sharia’h. When it came to description of Islamic financial terms, it shows there are total lacks of awareness of the meaning of these.

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A study was done by Kamal Naser, Ahmed Jamal and Khalid Al-Khatib (1999) in studied the degree of awareness of the 206 customers towards the Islamic Banking products.

Through their study the result shows most of the customers only have a little bit knowledge about the specific products that have been promoted by Islamic Banking.

However, most of the customers that involved with the Islamic banking do not know what kind of the products that have been apply, through that we cans see that the customers do not pay attention on their contract what they have been dealing. Meanwhile, Rammal and Zurbruegg (2006) do an investigated on the awareness of Muslim Australians towards Islamic banking, especially the demand for profit-and-loss sharing agreements. Their outcome show that generally there is a lack of awareness in regards to the basic rules and principles of Islamic financing. These results also indicate that a number of respondents would not take up halal financing options if there are credit facilities were been taken away.

In general, Islamic banks have been come out many types of contract base on the specific transactions. Indeed, it appears as one of the fastest growing industry all over the world and many Muslim customers involved with the Islamic banks as the intermediaries for their transactions (Furqany and Mulyany, 2009). Therefore, secondary school teachers are expected to have better awareness as they are formally educated and received more exposure about aqad in Islamic financial contract since they are most government server that involved with Islamic banks. Therefore, in a general point of view, it is important to determine the awareness among secondary school teachers for a next generation to understand the aqad because it is part of life especially Muslim.

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2.3 Knowledge towards the content of aqad in Islamic financial contracts

There are study that have been conducted by Hamid and Nordin (2001) in their surveyed on Malaysian commercial bank customers, and found that there was a high awareness on Islamic banking but poor self-reported knowledge on specific Islamic products, which included poor understanding on the differences between Islamic and conventional banking. From there, the researcher assumed that, the customers out there think that there are no differences of contracts come out between contracts from Islamic banks and conventional banks. In another study on Malaysia commercial customers and their views of Islamic financial services done by Ahmad and Haron (2002) stated that 65 % of the respondents admitted to have limited knowledge about Islamic banking, while at the same time indicating that, they believed the concept had good potential in Malaysian market.

On the other hand, Haron et al. (1994) had conducted a research among Muslim and non- Muslim customers. The outcome of the research stated that the sources of knowledge in Islamic banking product among the Muslim are come from television, newspaper, family members, magazine, and radio. However, regarding awareness on content of aqad is not widespread. Hence, the study found that 63% of respondents know the difference between the Islamic banking and conventional banking. Another study run by Osman and Ali (2008), they focused on the level of the knowledge among entrepreneurs understanding towards Islamic financing to the small and medium enterprise (SMEs).

The result stated that the understanding towards Islamic SMEs financing were

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considerable well and the respondents understood the importance of practicing and applying Islamic financing in their business.

Through this, we can see that knowledge and awareness are important to every Islamic financial contract since the customers doing their transaction with Islamic banks. Those include the secondary school teacher as the teaching staffs to the student in giving the knowledge to the student about how aqad is being conducted by Islamic banks. Besides, this is also important for the students who will continue their study in Islamic finance and banking field because they will be the one who take over the job in future with knowledgeable and able to explain how the aqad in Islamic financial contracts to the customers.

2.4 Religious obligation towards the content of aqad in Islamic financial contracts

Other factors that influence awareness towards preference for choosing Islamic banking products are religion obligation. Mentawa and Al Mossawi (1998) stated that religions are highest factor that influence the selection of Islamic banking services. This statement also been supported by Renneboog and Spaenjers (2009) in which they found that religion has a relationship with the financial decision to get involved in the financing transaction. Meanwhile, Gait (2008) also concludes that religion is the main factor for preference involving the Islamic financing services. As along it involve with Islamic product, it become a top priority to them especially Muslim people. However, to fulfill

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the transaction in Islamic ways must follow certain condition which is made an aqad before precede the transaction.

Most of the research focuses on the customer selection decisions towards Islamic banking. For instance, Alam et, al. (2012) had done a survey regarding the effect of religiosity on the intention to undertake Islamic home financing in Malaysia. The come out of the research shows that religiosity had significant influence to undertake Islamic home financing among Muslim in Klang Valley. This indicates the possibility that the strong influence of religiosity among Muslim would lead to greater awareness regarding the aqad in Islamic banking.

In brief it is suggested that Islamic banks originally will come out the contract that based on sharia‟h in order to make every transaction is lawful by Islam. On the other hand, Selamat and Abdul Kadir (2012) in their study, they suggest that Islamic banking institution does not only focusing on the religiosity factor in retaining the existing customers to get in the Islamic financing contract. Hence, we could have better human capital in Islamic banking industry in future and not only increase the number of customers as this will uplift their confidence to deal with the Islamic banks but also make it fulfill apply the transaction according to real Islamic ways. This also can engage them in Islamic banking rather dealing with conventional banks which are clearly practicing interest-based system.

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19 2.5 Hypotheses development

A hypothesis is a logical relation to estimate a relationship between two or more variables in order to express in the form of statements that can be tested (Sakaran, 2003). In other words, after identifying the important variables in the research area and establishing the relationships among the variables through the development of theoretical framework, the variables need to be tested whether there are exist significant relationships. Therefore, there are several hypotheses that need to be tested in this study.

This research is expected to have three variables which are awareness, knowledge and religious obligation. Awareness among secondary school teachers towards content of aqad in Islamic financial contracts would be the dependent variable which will become the main factor throughout this research. Meanwhile, the remaining variables which are knowledge and religious obligation would are act as the independent variables that can affect the awareness.

2.5.1 Selected demographic factors

In this research, the demographic profiles that have been chosen to be investigated are is gender, age, marital status, highest educational level, monthly income, experience dealing with Islamic banking and pillar of aqad. The reason to investigate these demographic factors with the dependent and independent variables involved is to see the differences between each of them. The test that will be used to test the gender is T-test while others

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will use One-way ANOVA. In addition, these hypotheses are developed in order to answer the first research question and research objective in this study.

i) Gender

Ho 1a: There is no significant difference between male and female secondary school teachers on awareness of content of aqad.

Ha 1a: There is a significant difference between male and female secondary school teachers on awareness of content of aqad.

ii) Age

Ho 2a: There is no significant difference age of secondary school teachers on awareness of content of aqad among secondary school teachers.

Ha 2a: There is a significant difference age of secondary school teachers on awareness of content of aqad among secondary school teachers.

iii) Marital Status

Ho 3a: There is no significant difference marital status of secondary school teachers on awareness of content of aqad among secondary school teachers.

Ha 3a: There is a significant difference marital status of secondary school teachers on awareness of content of aqad among secondary school teachers.

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21 iv) Highest educational level

Ho 4a: There is no significant difference among group of highest educational level on the awareness of content of aqad among secondary school teachers.

Ha 4a: There is a significant difference among group of highest educational level on the awareness of content of aqad among secondary school teachers.

v) Monthly income

Ho 5a: There is no significant difference among group of monthly income on the awareness of content of aqad among secondary school teachers.

Ha 5a: There is a significant difference among group of monthly income on the awareness of content of aqad among secondary school teachers.

vi) Experience Dealing with Islamic Banking

Ho 6a: There is no significant difference among group of experience dealing with Islamic banking on the awareness of content of aqad among secondary school teachers.

Ha 6a: There is a significant difference among group of experience dealing with Islamic banking on the awareness of content of aqad among secondary school teachers.

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22 vii) Pillar of aqad

Ho 7a: There is no significant difference among group of pillar of aqad on the awareness of content of aqad among secondary school teachers.

Ha7a: There is a significant difference among group of pillar of aqad on the awareness of content of aqad among secondary school teachers.

2.5.2 Correlation between dependent and independent variable

In this study, all the independent variable involved namely knowledge and religious obligation will be analyze to see their correlation with the awareness factor. The test that was used to determine the correlation between the variables was Pearson‟s correlation. In addition, these hypotheses are developing in order to answer the second research question and research objective in this study.

i) Knowledge

Ho 8a: There is no significant correlation between awareness of content of aqad among secondary school teachers and their knowledge.

Ha 8a: There is a significant correlation between awareness of content of aqad among secondary school teachers and their knowledge.

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23 ii) Religious obligation

Ho 9a: There is no significant correlation between awareness of content of aqad among secondary school teachers and their religious obligation.

Ha 9a: There is a significant correlation between awareness of content of aqad among secondary school teachers and their religious obligation.

2.5.3 Influence of independent variable and dependent variable

Ho 10: secondary school teachers‟ knowledge and religious obligation are significantly influence their awareness of content of aqad in Islamic financial contract.

2.6 Summary

This chapter has covered a review of relevant literature regarding to the concept and definition of awareness, knowledge and religious obligation. Moreover, this chapter has discussed on the previous studies regarding to awareness, knowledge and religious obligation.

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CHAPTER THREE RESEARCH METHODOLOGY

3.0 Introduction

This chapter discusses the methodology of this study. In addition, this chapter explains and elaborates on the research design, operational definition, population and sampling technique, measurement of variables, questionnaire development, pilot study, factor analysis, reliability of the instrument and as well as analysis methods of data. The chapter ends with a discussion of the statistical technique used to analyze the data.

3.1 Research design

In this part, research design is the generally overall plan structure used to conduct the whole study. The main purpose of this study is to determine the awareness among secondary school teachers on content of aqad in Islamic financial contract. The awareness was obtained through respondents‟ answer in the questionnaires. Quantitative approach has been found to be the most appropriate to study the teachers‟ awareness.

Bhatti et al., (2012), stated that quantitative research is the research that describes the phenomena through the process of quantifying and interpreting data through the application of statically analysis techniques and solutions particular problem can be derived from statically patterns. In addition, this study employed a cross-sectional survey design which means a study can be undertaken in which data are gathered just once,

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perhaps over a period of days or weeks or month, in order to answer a research question (Sekaran and Bougie, 2013). Survey design is a good way of measuring the relationship between variables.

Hypotheses testing will be the purpose of the study as supported by Sekaran (2003), hypotheses testing normally explain the nature of certain relationship among groups or the independence of two or more factor in a situation. Therefore, in this study, detail set of questionnaires were used to collect data. The questionnaire examines the teachers‟

awareness on content of aqad in Islamic financial contracts and the factors which could affect the teachers‟ awareness, such as knowledge and religious obligation. For example, if the teachers have basic knowledge about the how aqad been operated in Islamic financial contracts, they may have high potential to be aware about the contract that has been come out by Islamic banks. Therefore, this study seeks to explain the variance in the dependent variable and also to predict the result of a given situation.

3.2 Sampling design

3.2.1Population

Data provided by the Pejabat Pendidikan Daerah Padang Terap, showed that the total number of secondary school in this district is 9. It is consist of 6 secondary schools and 3 Islamic secondary schools. In this research, 280 set of questionnaire were distributed all the teachers who are teaching in the secondary school in Padang Terap. Researcher

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estimate 80% of the total secondary school teachers in this district are Muslim. In this research, 280 questionnaires were distributed among Muslim teachers. The sampling location is secondary school stated in district of Padang Terap which is allocated in the northern part of peninsular of Malaysia in Kedah.

The researcher is focus on the teachers who are teaching at secondary school because most of government servant who is involved with the Islamic banks is a teacher. In addition, this study also aimed to determine the factors that would affect the teachers‟

awareness such as knowledge and religious obligation. Thus, in order to meet the objectives of this study, the following inclusion criteria were applied:

i. Samples should be Muslim teachers.

ii. Samples should be teachers who are teaching at secondary school in district of Padang Terap.

According to Roscoe (1975) cited in Harun (2014) research, it is recommended that the sample size is greater than 30 and less than 500 are applicable to most studies. Thus, for this study, 230 completed questionnaires were collected, which gave a total response rate of rate 88% and the number was sufficient for further statistical analyses.

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27 3.3 Measurement of variable

According to Sekaran (2003), stated that operational definition is used to define something in terms of a process which is done by looking at the behavior dimension, aspect or property signified by the concept.

3.3.1 Awareness on content of aqad in Islamic financial contracts

Awareness are operationalized the teachers‟ knowledge towards Islamic financial contract exists, or understanding the aqad in contract at the present time based on information or experience in filling any contract that involve with Islamic banking.

Awareness as the tools to which a products and services is concerned and recognized by positional consumers where it associates with the product and services (Musses, 2015).

For this research, awareness is being measured by adapting 6 questions from (Ling, 2012) and the remaining questions are self-created.

Awareness is the main variable measured in this study and it was treated as a single factor in order to validate the instruments. Awareness is operationalized as the information or fact acquired by teachers through experience in filled the contract in Islamic banks.

Basically, the measure of awareness propose in this study is adapted from the previous study and new questions construct by researcher. Item 7, 8, 9 and 10 in the list were added and deemed applicable to this study. Table 3.3.1; show the list of the questions that are related to awareness:

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28 Table 3.3.1

List of Questions for Awareness

3.3.2 Knowledge

Knowledge are operationalized as the information or fact acquired by the teachers through education or experience toward Islamic financial contract. The definition and the use of terms “knowledge” had been overshadowed by the terms “information” where it contribute to mislead assumption that knowledge can actually be managed in the same way as the people who possess it (Loughridge, 1999). In order to measure this variable, 7 relevant questions from Harun T. W., Rashid R. A. and Hamed A. B. (2015) were adapted accordingly and the remaining questions are self-created.

List of question

1 I know that there must be aqad in Islamic banking transactions

2 I am aware that aqad only have in Islamic transaction not in conventional transaction.

3 I am aware that aqad not only for Muslim.

4 I am aware that Islamic bank has many different of aqad based on type of transactions.

5 I am aware of Islamic partnership–based contract such as musharakah.

6 I am aware of Islamic sales–based contract such as murabahah.

7 I am aware of Islamic lease–based contract like ijarah.

8 I am aware of Islamic safekeeping–based contract like wadiah.

9 I am aware of Islamic security–based contract like rahn.

10 I am aware of aqad are enshrined in the Contracts Act 1950.

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Questions for the knowledge variable the researcher had also combine question from previous researcher and new question construct by researcher. There 10 items that seem to have relation and connection to knowledge. For the self-construct questions are items 3, 7 and 8 that applicable to this variable. Below is the list of questions that have relation to the knowledge:

Table 3.3.2

List of Questions for Knowledge

3.3.3 Religious Obligation

Religious obligation can be operationally defined as a specific fundamental set of beliefs and practices applied accordance to their religion. Islamic society is significantly affected by Sharia guidelines (Sulaiman, 2003). In this study, the researcher want to investigate

List of question 1 I know the concept of aqad in transaction.

2 I know my rights in the contract.

3 I make sure I understand the contract first before signing the contract.

4 I know that the contracts offered by Islamic banks are easy to understand.

5 I know about Islamic financial contracts through education.

6 I know the aqad can only happen if both sides are perfectly minded, baligh or independent.

7 I know the aqad requires a witness.

8 The contract will be void if either party is in coercion state.

9 I know willingness (ijab-qabul) is very important in the aqad.

10 I know "I sell" or "I buy" is a verbal aqad.

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whether the teachers is applied their religious abligation in their life especially on their transactions. For this research, awareness is being measured by adapting 6 questions from Asma‟Rashidah Idris, K. N. (2011) and the remaining questions are self-created.

Question that relate to the religious obligation were also compiled according to previous researcher and self-created. Only item 6 are created by the researcher which deemed suitable with this variable. Table 3.3.3, shows the list of the questions obtain respondents‟

religious obligation.

Table 3.3.3

List of Questions for Religious Obligation

List of question

1 I know that transactions with aqad will bring justice and honest based on the Holy Quran and Sunnah.

2 I know that aqad is a parameter that causes a transaction to be valid or not according to Islam.

3 I know the item in the aqad must be halal.

4 Aqad are free from doubtful transactions.

5 Regulations practices in Islamic financial contract do not give burden to customers.

6 The aqad will be void if one of the pillars is absent.

7 I believe that Islamic financial contract must be operated based on Sharia’h.

8 I believe that all the transaction with aqad is mandatory in Islam transaction.

9 I believe that aqad is a bind to legitimate ownership of Islam 10 I agree that aqad are important in human life.

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Based on table 3.3.1, 3.3.2 and 3.3.3 there are 30 questions in total that are related with the independent and dependent variables that are suitable for this research. The summary of the variables and related questions adopted and adapted from various studies are summarized in table 3.3.4:

Table 3.3.4

List of author for each variable

After the compilation of questions, a content validity was conducted through discussions with the relevant experts such as the researcher supervisor and lecturer involved with the field of study. This step was important to identify the questions that can be used for this study and eliminate the questions that are not relevant for this study. Then, a simple questionnaire was developing in order to execute the pilot study.

3.4 Question development

In this study, questionnaire was used to gather the data in order to accomplish the objectives of this study. Questionnaire is suggested as most applicable data collection

Variable Author No of Questions

Awareness Ling, (2012) Self-constructed

1-6 7-10 Knowledge Harun T. W., Rashid R. A. and Hamed A. B.

(2015)

Self-constructed

1,2,4,5,6,9,10

3,7,8 Religious obligation Asma‟Rashidah Idris, K. N. (2011)

Self-constructed

1-5,7-10 6

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method when dealing with large number of respondents (Harun, 2014). Besides, compared to conducting interviews, engaging with the questionnaire would save more time and would also less expensive. It also enables the researcher to collect the entire response from the respective respondents in a short period of time. In addition, the researcher can also explain the clarify in details any questions from respondent that might not understand or have any confusion during the allocation of questionnaire because the researcher distributes the questionnaire with the collaboration of schools‟ counselor to the respondents.

After the questionnaire has been verified through several processes, the real questionnaire was developing in order to be executed in a real field of study to the real population. The questionnaire contains of front page and its contents divided into three sections. The questionnaires have been developed in Malay language as the main language used in the area of allocation. The cover page contains the permission notes together with some brief explanation regarding the objectives of the research. Table 3.4 show details of each section in the questionnaire:

Table 3.4

Question development

Section Items Question

A Demographic profile 1-9

B Awareness

Knowledge Religious obligation

10-19 20-29 30-39

C Open ended 40

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The detailed of the questionnaire design had been attached in Appendix A at the end of this research report. Nominal and interval scale are used as measurement of the questionnaire. According to Sekaran (2003), nominal scale refers to the categorization of individuals into mutual exclusive which can be calculated using percentage or frequencies. In this study for instance, section A which consist of demographic profiles such as gender, age, marital status, highest educational level, monthly income, experience in dealing with Islamic banks and pillar of aqad are under nominal scale which no intrinsic values. Meanwhile, interval scale allows performance of arithmetic operations and measure the distance between two points on the scale (Sekaran, 2003). In this study, Likert Scale was used as an indicator to decide the answer for instance. It includes 5 values which give different views towards the answer. The indicators are as follows:

1--- Strongly Disagree 2--- Disagree

3--- Not Sure 4--- Agree

5--- Strongly Agree

3.5 Pilot study

A pilot study was conducted after the development of questionnaires before a large-scale study is performed. The purpose of doing this pilot study was to pre-test the adequacy and sufficiency if the instrument and evaluate whether respondents were able to understand and conceive the questions before the actual set of questionnaires were

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allocated. According to Sekaran (2003) the implementation of the pilot study is to correct and amend any inadequacies in the instruments prior to the data collection and also identify the difficulty in wording and translation in the questionnaires. 15 sets of questionnaire were distributing to the actual teachers that have been selected for the pilot study.

3.6 Factor analysis

After implementing the pilot study, the data collected from the study was analyzed through developing a factor analysis. This is in order to perform the requirement for the third validity which is construct validity. Statistical Package for the Social Sciences (SPSS) version 21 was used for the purpose. Basically, to develop questionnaire, researcher often used factor analysis. Therefore, to measure the ability trait, researchers need to make sure that the questions listed are related with the constructs that the researcher intends to measure.

In addition, this analysis is used to validate the instrument. In this study, the factor analysis was performing to the all variable because all this variables were amended from questionnaires used in the previous research. This is because the instrument also includes new additional questions constructed together with the instrument adapted from the previous researcher. Therefore, due to reasons, the factor analysis is required in this study.

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According to Hair, Anderson, Tatham and Black (1998) factor analysis is done through defining the common underlying cut-off point chosen to accommodate a significant factor is 0.30 as purposed. For instance, if the sample size is more than 350 respondents, a factor loading of 0.30 was considered acceptable. Each item was analyzed and those items that loaded strongly or show a factor loading below 0.30 were removed.

Furthermore, as mentioned before, in order to construct the validity reseacher need to use factor analysis.

Two statistical measures which is Kaiser-Meyer-Olkin (KMO) and Bartlett‟s test of sphericity is used in performing the factor analysis to measure the degree of correlation between variables and to examine for presence of correlation between the variables (Hair et al., 1998). The KMO or the measure of sampling adequacy (MSA) can be interpreted with the following guidelines which suggested by Hair et al., (1998) as MSA value exceeding 0.80 is meritorious; 0.70 above is measureable; 0.60 above is mediocre; 0.50 or above is miserable and below 0.50 cannot be acceptable and should be excluded. Hair et al., (1998) also mention that the test of sphericity should be significant where the value is 0.50.

3.6.1 Factor analysis for awareness variable

In this study, the researcher had identified the dependent variable (DV) as awareness of teachers on content of aqad in Islamic financial contracts. The data used for this test is acquired from the pilot study involving secondary school teachers. As shown in table 3.4

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there is 10 items of questions that have been listed under the dependent variable.

Unfortunately, after performing factor analysis, there are one item need too eliminated due to having low correlation value that are less than 0.30. This also supported by Julie Pallant (2011) who stated that removing items with low communality value tends to increase the total variance explained. The eliminated question is represented as A17 in SPSS.

After the question has been eliminated, a factor analysis was performed again by using the remaining 9 questions. The KMO measure of sampling adequacy for this data showed a result of 0.632 which is considered as high value. As mentioned by Hair et al., (1998), the high value indicated that factor analysis may be useful in this study and each variable perfectly expected without error expected by other variables. If the value less than 0.50 the results of factor analysis may not be useful and it cannot be accepted. The detailed of the result had been attached in Appendix B at the end of this research report.

3.6.2 Factor analysis for knowledge variable

In this study, the researcher had identified the independent variable (IV) for teacher towards content of aqad in Islamic financial contracts. The data used for this test is obtained from the pilot study involving secondary school teachers. Based on table 3.4 there are 10 items of questions that have been listed under this variable. From the test all the items is acceptable which mean the items is have enough correlation between them.

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Meanwhile, the KMO measure of sampling adequacy for this data showed a result of 0.659 which is considered as high value. As mentioned by Hair et al., (1998), the high value indicated that factor analysis may be useful in this study and each variable perfectly expected without error expected by other variables. If the value less than 0.50 the results of factor analysis may not be useful and it cannot be accepted. The detailed of the result had been attached in Appendix B at the end of this research report.

3.6.3 Factor analysis for religious obligation

In this study, the researcher had identified another independent variable (IV) for teachers towards content of aqad in Islamic financial contracts. The data used for this test is acquired from the pilot study involving secondary school teachers. As shown on table 3.4 there are 10 items of questions that have been listed under this variable. Unfortunately, after performing factor analysis, there are one item need too eliminated due to having low correlation value that are less than 0.3. This also supported by Julie Pallant (2011) who stated that removing items with low communality value tends to increase the total variance explained. The eliminated question is represented as R33 in SPSS.

After the question has been eliminated, a factor analysis was performed again by using the remaining 9 questions. The KMO measure of sampling adequacy for this data showed a result of 0.672 which is considered as high value. As mentioned by Hair et al., (1998), the high value indicated that factor analysis may be useful in this study and each variable perfectly expected without error expected by other variables. If the value less than 0.50

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the results of factor analysis may not be useful and it cannot be accepted. The purpose of performing Bartlett‟s test is to prove whether the correlation matrix is the identity, matrix, which can give us conclusion whether the variables are related to each other or not. Thus, factor analysis of this data is appropriate. The detailed of the result had been attached in Appendix B at the end of this research report.

3.7 Data collection method

Primary data were collected in this research to address the research objectives. According to Zikmund (2002) primary data is the firs-hand data communication and interaction with the representative sample of the population. The researcher had decided to apply self- administered questionnaire as the main data collection method in this study. Self- administered refer to the situation where the respondents that are Muslim teachers from secondary school of Padang Terap district will take responsibility for reading and answering the questions listed in the survey by themselves (Harun, 2014).

In this study, the questionnaires were distributed randomly with helped come from the school counselor for 2 weeks duration. The distribution was done according to these following steps in which is firstly, the researcher approached the school principal to asking a permission to conduct a research in each school and then the researcher will collaborate with the counselor of the school to distribute the questionnaire and ensure all the questionnaires only answer by Muslim teachers. Researcher will collected back the questionnaires in next weeks from the school‟s counselor. Some school does not return

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back the same amount of the questionnaires that have been given. So, the remaining questionnaire will be collected by schools‟ counselor and then the researcher will take back the questionnaire in the date that has been stated.

3.8 Data analysis

In this study, quantitative data analysis was used for the raw data obtained from the questionnaires and were analyzed by using appropriate statistical tools. The interpretation of the results of the analysis will be using the SPSS software Version 21. This includes factoring and reliability analysis to check of the respondent, and the difference between the variables demographic profiles. The data later were analyzed and the hypothesis is measured.

3.8.1 Reliability test

In order to compute the goodness of data including the consistency and stability of the items, reliability test was used. The purpose of running this test is to determine which items measure to concepts and examine whether both are linked together in one set, thus reliability test is really important in this study. The reliability was measured by using the internal consistency which recognizes the correlation response to every question with another question in answering the questionnaire. Cronbach‟s alpha is the method that is most often and widely used to examine the internal consistency. According to Gliner, Morgan, and Leech (2009) if the item on the test has multiple choices, for example the

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questionnaires based on the Likert Scale, then the Cronbach‟s alpha is recognized method in order to determine the reliability of the instruments. According to Sekaran (2003), if the Cronbach‟s alpha close to 1; it will give the higher reliability of internal consistency.

Generally, the reliability less than 0.60 is considered to be poor, those in range 0.70 is acceptable and those which over than 0.80 is considered as good. Table 3.8.1, shows the result of reliability test in this study.

Table 3.8.1

Results of Reliability Test

The assessments of reliability scale for all variables were dependent on the correlations between the items. The range between 0 and 1 is to indicate Cronbach‟s alpha coefficients of dependability of the data. Therefore, based on the table above the value of Cronbach‟s alpha is in the range above 0.8 where the value closer than 1. This shows this data has higher reliability of internal consistency (Sekaran, 2003). Questions on religious obligation are the highest reliability which is 0.921. We can see that all the dimensions are reliable and the items pertaining to each of the dimensions can be used to measure the construct to which they pertain. So, we can conclude that all the variables are reliable.

Variable No of Items Cronbach’s Alpha

Awareness 9 0.851

Knowledge 10 0.894

Religious obligation 9 0.921

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