CHAPTER 1 INTRODUCTION

Introduction

Islamic banking is an important system of bank that helps to facilitate the current
financial system. First, in 1963, the Islamic banking gained appearance in Egypt and
later in other countries such as Qatar, Sudan, United Kingdom and others. In 1983,
Islamic banking makes its debut in Malaysia with established the Bank Islam Malaysia
Berhad (BIMB), it provides an alternative for the banking users, in the other word, they
can chose either use conventional banking or Islamic banking or both (Ling and K. L ,
2012).
Around the world, more than 75 countries have established more than 430 of
Islamic financial institution and this situation proved that the Islamic financial institution
spread in worldwide (Kazi Abdul Muktadir, 2012). The current state of the Islamic
finance industry and the global spread of the banks and financial institutions have been
achieved. It is projected that Islamic financial products will filter through the second
decade of the 21st century of the economy of the European.
The conceptual basis of the modern practice of Islamic banking and finance is
firmly rooted in the primary sources of the Shariah which is the Quran and Sunnah.
The fundamental principles have been developed to suit modern needs, although its
origins lie in early Islamic history.
From its historical backgrounds to modern competitive products, the basic
principles of Islamic banking and finance in the modern world, present an alternative
financial system. The illustration of simple Islamic finance products into competitive
products in the modern world has greatly contribution to the spread of Islamic banks
and financial institutions.
1

Although similar to conventional banking, but the operating structures and

infrastructure of Islamic banking and finance are largely influenced by the mandatory
prescriptions of the Shariah. There are four major components in Islamic finance
industry, which are the banking sector, the Islamic insurance, Islamic capital market,
and the non-bank financial institutions. For a robust and sound Islamic finance industry,
they strengthened of Shariah and regulatory framework in order to remain competitive
in the global industry.
The forbidden elements such as, riba, gharar, maisir and so on in Islamic
commercial transactions must be avoided, this means that the process of development
of the Islamic banking and finance products must be avoid from such elements. It
should be recalled that all the Shariah financial instruments are premised on
permissible contracts (M.Kabir Hassan, Rasem N. Kayed and Umar A. Osen, 2013). If
the contract contained such element, it must be proscribed.

Background Of Study
Islamic banking was develop in the global monetary since the 1970s. Since 1400
year ago, Holy Quran and Sunnah of Prophet Muhammad have all the principle and
philosophies. The Islamic banking is related to revival of Islam and the desires of
Muslim to live all aspect o of their live in according with the teaching of Islam.
According Islamic bank system, their offer any deposit such as saving, demand and
timed deposit. The all of deposit approved Shariah contract such as Mudharabah and
Wadiah. Each contract is different between with conventional concept. The
conventional concept is based on Lender-borrower. The Shariah approved this
contract because it is have unique as they features a different nature and risk. Islamic

bank offering Shariah compliant product based on different with respect other
dimension of return risk, liquidity, maturity, safety, stability and so on.
In Islam, riba is against any practice that provides excess in the return of equivalent
counter-value or no reward and paid. Since 1960, the prohibition at interest (usury)
has been discussed issue among Muslim. Islamic bank was helping Muslim Ummah to
invest their saving for halal return according Shariah compliant. Islamic banking is
different with conventional bank because riba is prohibited in Islam, for example in
Bank Islam Malaysia Berhad (BIMB) are not allowed to offer a fixed rate of return on
deposit and are not allowed to charge interest on loan.
This study highlights the factor of non-Muslim using the saving deposit in Islamic
bank. The non-Muslim wished to have a relationship with Islamic bank if they had
complete understanding of these systems. But there are still not understandings with
the system of Islamic bank. There are choosing the Islamic bank because the influence
of family and friend and convenient location. According Haron (1994), in his study
stated that about 75 percent of non-Muslim aware of the existence of Islamic banking
services in Malaysia.

Problem Statement

The changes in Malaysian financial landscape and introduction of the Islamic

banking has generated new dimension and phenomenal in banking sector.
Conventional and Islamic banks deposits are stable however the Islamic demand
deposits and the Islamic demand deposits are more stable than the conventional
demand deposits and conventional time deposits (Remali and Wilson, 2009).
3

The one significant of saving account is the holder annual received the dividend
based on Profit and Loss Sharing of Islamic Banking intuition which is considerably
form Shariah compliance sources. According to A. Kasri and Salina (2009) in their
study, found out that the real return of Islamic deposit responds positively and
significantly to shocks in real interest rate and in real Mudharabah investment deposit.
The finding also indicates that the higher rate of return encourages more savings in the
Islamic bank.
Most of the Islamic banking consumers are aware and familiar with Wadiah
savings and current account (Barathy, Arunagiri and Ravindran, 2011). However,
several studies examined the certain negative vibes were identified from their
responses, examples, Muslims have a strong understanding and non-Muslims a weak
understanding of the concept of Islamic banking (Mark Loo, 2010). The level of
awareness of the need to have Islamic banking deposits accounts due to the religious
reasons is considered as high among the depositors (Rimsan, Hilmy and Suraiya,
2014).
Basically, customers will choose the bank which offer special benefits that are not
offer by the other conventional bank. The most important criteria considered by the
client in bank selection are fast and efficient services, banks reputation and image,
and the confidentially (Erol and El-Bdour, 1989). These findings are supported by
Naser, Jamal and Al- Khatib (1999) which mainly concerns with the banks name,
image, confidentiality policy and reputation.
Furthermore, the growth of Islamic banking continues to attract and draw the
attention of several institutions all over the world. The most attractive factor that draws
Muslims to Islamic banking is religion while the most attractive factor that draws non-

Muslims is product and services (Mark Loo, 2010). Therefore, this study aims to
identify which factor that influence non-Muslims choose Islamic saving deposit product.
3

Research Objectives
The objectives of this study are:
i

To determine the relationship between rate of return and Islamic saving deposit

ii

among non-Muslims.
To determine the relationship between awareness and Islamic saving deposit

iii

among non-Muslims.
To determine the relationship between services and Islamic saving deposit

iv

among non-Muslims.
To determine the relationship between unique of product and Islamic saving
deposit among non-Muslims.

Research Questions
The study attempts to address the following questions:
i

Is there any relationship between rate of return and Islamic saving deposit

ii

among non-Muslims?
Is there any relationship between awareness and Islamic saving deposit among

iii

non-Muslims?
Is there any relationship between services and Islamic saving deposit among

iv

non-Muslims?
Is there any relationship between unique of product and Islamic saving deposit
among non-Muslims?

Significant Of The Study

Others researcher
It is a time to apply the theoretical knowledge that has been learnt and it is also a
good opportunity to push the ability in providing or conducting a good research
rather than to only fulfill the requirement for completing study.

To the banking sector

This study will help the industry to improve their marketing and develop strategies
of saving deposit product to attract the customer to participants in their
organization. This study could assist the management in understanding the needs
of their target and introduce their product.
3

To the future researchers

This study can give benefits to the future researcher as they can use this research
as a references and guidelines especially in studying the factors that influence the
demand of Islamic saving deposit among non-Muslims.

Definition Of Term
All the definitions in below are defined by IBFIM (2013).

Mudharabah (Profit-sharing contract)

This is a contract between the capital provider and the entrepreneur, the capital
provider will provides the capital that to be managed by the entrepreneur and any
profit generated from the capital is shared between both of them according to the
mutually agreed of the Profit Sharing Ratio (PSR) while the financial losses will
borne by the capital provider.

Wadiah (Safekeeping)
This is the contract that the bank is deemed as a trustee and keeper of funds. And
a person deposits their funds in the bank and the bank guarantees to refund of the

entire amount of the deposit.

Riba (Interest)
Word riba means to increase, to grow, to rise, to add, to swell. Technically, it is
refers to the premium that the borrower must be paid to the lender along with the
principal amount as the condition of the loan or the extension in the maturity.

Gharar (Uncertainty)
Word gharar refers to transaction which has uncertainty element at its inception.

Maisir (Gambling)
Literally means easy and something attained with no effort due to the element of
winning something or earning money without any effort at all.

CHAPTER 2 - LITERATURE REVIEW

Introduction
In many market, most bank in Malaysia has changed in offer product and services
conventional into offering product and services Islamic. Islamic bank in Malaysia has
many competitor in the market, so they facing difficult to develop the product and
service Islamic to consumer. So they need to develop their product through any
innovation and alternative to increase their demand while maintaining the abidance
with Shariah law. In this study, the primary focus will be on non-Muslim preference in
using service of Islamic saving deposit product.

Islamic Savings Deposits

Islamic saving account (Wadiah) is compliance to the Shariah and it has the
similar purpose as the conventional savings account, therefore, it has the same
characteristic of the product features. According to INCEIF (2006), Wadiah is the
contract or product that helps the customers who are seeking for the safe custody of
their funds, and wish to save money in order to earn some income from their savings.
Therefore, all types of the banking institutions are offering savings deposits account
for their customer. Thus, it can be said that saving account is the basic type of deposits
account that offered by banks. The depositors make saving in the bank is for the
purpose of security and for future consumption. In addition, the savings deposits are
expected less volatile or fluctuate less than those of current accounts, thus the savings
accounts are the one of the stable funding sources for the banks (INCEIF, 2006).
In addition, the savings account deposits are formed by a huge pool of the
individuals with the small sums of the deposits. Based on Karim, Muhammad, and
Syahmi (2010), since few withdrawals will not significantly affect the deposit structure
of the bank, thus the risk of liquidity shock of sudden withdrawal is diversified. Some
research conducted by Ahmad (1993) on a few Islamic banks, generally in Middle
Eastern countries, the savings accounts classified based on the following categories:
a

Offering Wadiah principle base savings deposits, this type of saving deposits
request depositors in giving banks the permission to use these funds for the
purpose of investment at its own risk, but bank guarantee the full return of deposits
and willing to share any profit.

Accepting the savings deposits that the bank as the capital provider will gives
authorities to the depositor such as the entrepreneur to run or invest a business
and agree to share profit according the profit sharing ratio for the period.

Qard Hasan base saving deposits, it is treated as Qard Hasan from the depositors
to the bank and granting pecuniary or non-pecuniary benefits to depositors.

Treating saving deposit as investment fund and accepted as a part of an

investment pool.
All these four categories savings deposits are identified as the contract of Wadiah

yad-Dhamanah, conditional Mudharabah, Qard Hasan and Mudharabah respectively.

The study was aligned with the previous research conducted by Haron and
Shanmugam (2001). Furthermore, both of these studies conclude that the common
underlying contracts are similar to the Shariah compliant transaction deposits, for
example, Wadiah, Wadiah yad Dhamanah, Qard and Mudharabah, depend on which
contract comfortable to banks Shariah committee (INCEIF, 2006).
1

Interest Rate Payment

The aim of the banks is to achieve the profitability it takes into account the
expansion of banking services, and improves the service quality for their customers.
Other than that, the bank also has developing the deposits account, capital
preservation, and other methods in order to achieve the level of profitability that
required, as it received from the Islamic bank activity and, at the same time, is the
result of investment operations and banking operations, which are reflected in the form
of dividends to shareholders and depositors.
According to the previous study, it concludes that the depositors react to the
movement of interest rates in choosing deposits products. The depositors are willing to
pay the penalty of the early termination for the contractual deposits such as fixed
deposits, if they are offering a new interest rate which is high enough. This is
supported by the study about on factors of early withdrawal in timed deposits portfolios
in chartered thrifts in the US from 1994 and 1995 (Gilkeson, A.List, and K.Ruff, 1999).
9

According to the finding of the research that is undertaken by Gilkeson et al. (1999),
the timed deposit is sensitive to rate movement, and the customers are willing to forgo
the existing interest rate that will charge penalty payment in order to get the benefit
from the reinvestment incentive when new deposits rates rise.
Next, the other research finding aligned that the interest rate elasticity of money
demand will influence the effectiveness of the monetary policy, this point outs the
customers are reacting positively to the changes of the interest rate market. This is
further supported by the study of Glennon and Lane (1996), which analyzed the
expected impact of the introduction of two events in the US banking market, such as
the influence of the deregulation of interest rate payments on the deposits market, and,
the impact of the implementation of interest bearing checkable deposits in the banking
market of US on the money demand and the interest rate markets.
The study that is undertaken by Kasri & Kassim (2009), they found that the Islamic
deposit level significantly affected by the rate of return and real interest rate in long
term, and yet with the different time profile and magnitude. Definitely, while the Islamic
deposit responds positively and innovations immediately in the real return rate. In other
words, the Islamic banks customers are rational depositors who driven largely by the
return rate that they benefit from their saving. This outcome is corresponding with
another researchers study, which are Haron and Ahmad (2000), Mangkuto (2004), and
Rohmah (2006). But this finding is different to the results that Bank Indonesia (2005) in
South Kalimantan, South Sumatera, North Sumatera, and West Java obtained by the
study. This study argued that the rate of return is not a significant factor in determining
the depositors decision to choose Islamic banks.

Awareness
10

In any services banking, the consumer awareness as one of the key variable to
know how far the consumer know the offering in product and services Islamic bank
(Alsoud, 2013). Based on the Sudin (2004) said the services has provide by staff of bank
is one of factor aware for consumer. The role of staff in the bank gives more impact for
their consumer. The staff shown the good attitude for the consumer, the consumer will
always want to use those services.

Besides that, according on Saad A. Metawa (1998) said the Islamic banking need
investigate whether consumer are aware of their product and service and to know how
many of those product and services are being used on regular basis. This study showed
the percentage of awareness is highest in three basic deposits which is current account,
saving account and investment accounts.

Based on Chan and Mas (1990), this study found that the consumer will change in
their bank if they know the other bank were able to give better product and quality other
bank. The consumer will change their bank if they know that bank is better. According
Jamil Osman (2009), he said to create awareness among consumer to using the services
of Islamic banking, the Islamic banking gain more advertising about term of system bank in
Islamic banking.

According Phillip, Gerrard and J. Barton Cunningham (1997) found the Muslim and
non-Muslim in Singapore is unaware of the meaning of Islamic financial term. They
suggest of Islamic banking need explain the term of Islamic financial to understanding of
consumer about the Islamic financial terms. This study also identified the factor of
awareness in product and services by offering in Islamic banking for consumer due
11

location of Islamic bank, reputation of bank, friend recommendation availability of credit,

competitive interest rate, friendliness of bank staff, and the quality services on.

According to previous study, Muslim Amin and Zaidi Isa (2008) said the Islamic
banking need approve the strategy of marketing and upgraded their technologies
capabilities to encourage of consumer using the product and services. In particular, the
Islamic banking also need maintain better service quality and consumer satisfaction.

Services

There are few numbers of studies about quality of services by Islamic banking. It is
known that currently most consumers who requires of all products and services.
Consumers tends to maintain and enhance their loyalty is through quality of service which
has related to the successful of service organizations which including Islamic banks (Wong
& Sohal, 2003). According to Dusuki and Abdullah (2007), their study found out that the
selections of Islamic banks are to be a combination of financial and Islamic reputation and
the service quality that offered each banks.

Consumers preferences often depends on the quality of services offered. Fast and
efficient services are always regarded as high quality services by bank consumers who
value time and expect the transaction to be completed quickly (Doraisamy et. al., 2011).
Another finding of the study by Haron et al. (1994) indicated that the most important factor
considered by Muslims when selecting their financial institutions is that the efficient and
fast service and this factor was ranked second by non-Muslims. In their studies, it
indicates that the context of quality services are reflected by the personnels friendliness,

12

dress code, communication techniques and consumers relationship. Amin and Isa (2008)
examined the relationship between the quality of service perception and the satisfaction of
customers in Malaysian Islamic banking and the study also shown that there is a
significant relationship between the service quality and the customer satisfaction.

Another finding by Haque et al. (2009), their study examines that the essential
factors that influence the individual perception toward the products of Islamic banking and
concludes the availability of high quality of service and social as well as a higher level of
religious perspective could make the Islamic banking easier and more comfortable.

Uniqueness of Product

Islamic saving is the unique product in Islamic banking, which the use concept of
Wadiah. All Islamic banks are operates the saving deposit account, but the operation of
these accounts are vary at different banks. Generally, the customers are authorizes to
withdraw and save their money at any time they wish and does not require a minimum
balance in saving deposit account. According to Irsyid (2007), it does not have maturity
date therefore the cash can be withdrawn at any time based on the desire of the costumer.

Generally, Islamic financial institution structure their saving deposit account based
on sharia principle, either the form of Qard, Wadiah yad Dhamanah or Mudarabah saving
deposit. A further condition such as an incentive condition is that they should not to be
offered regularly. Ayub (2007) has define that, with the passage of time, the practice will
become routine and, in return, take on ruling advantages that stipulated in the deposits
contract.

13

In meanwhile, according Ayub (2007), the investment deposit is usually known as

investment account or Profit and Loss Sharing (PLS) account. And the distribution of the
profit ratio between the bank and the depositor shall be agreed at time of accounting
opening subjected to the Sharia that the partner may agree on the ratio of profit and losses
that have to be shared strictly in the ratio of capital.

The main point of departure between both saving and current deposit and the
investment deposit is the former is normally structured based on either the Mudharabah or
Wakalah bi Istismar principles which do not entail a guarantee of either the principal or the
return of profit. However, the holders of the investment account have an opportunity to
make more attractive returns although there is also like hood have to bear the risk of the
losses of capital (ISRA, 2013).

Today, the Islamic saving deposit had been chosen by the non-Islamic customer
due to their perception for unique of the product. According to Karim and Affif (2006),
beside the perception that the Islamic bank is a bank that operates under Islamic principles
which is including the avoidance of riba, other important perceptions are Islamic banks are
destined for the Islamic consumers only, and there is only limited facilities provided
compared to conventional banks and do not have a huge customer base.

In Malaysia, according to Mark Loo (2010), with her objectives to investigate the
perceptions of Muslims and non-Muslims towards the Islamic banking, the finding show
that there is significant difference between X-Gen Muslims and non-Muslims and similarly
between Baby Boomer Muslims and non-Muslims in how they recognize of Islamic
banking. In short, the view of non-Muslims to Islamic bank with a disadvantage more
significantly than Muslims.
14

Conceptual Framework
Based on the literature review, a research model in the following Figure 1 is

developed in order to study on non-Muslims customers of Islamic saving deposit in Bank

Islam Malaysia Berhad (BIMB), at Kota Bharu Kelantan. Rate of return, awareness,
service and unique of product are the independent variables while Islamic saving deposit
is dependent variable.

Rate of Return

Awareness
Islamic saving deposit

Services

Uniqueness of
Product
Independent Variables

Dependent Variable

Figure 1.1 Conceptual Framework

3

Research Hypothesis

The hypotheses are as follow:

15

Hypothesis 1
Ho : There is no relationship between rate of return and Islamic saving deposit.
H1: There is a relationship between rate of return and Islamic saving deposit.

Hypothesis 2
Ho : There is no relationship between awareness and Islamic saving deposit.
H1: There is a relationship between awareness and Islamic saving deposit.

Hypothesis 3
Ho :There is no relationship between services and Islamic saving deposit.
H1: There is a relationship between services and Islamic saving deposit.

Hypothesis 4
Ho :There is no relationship between unique of product and Islamic saving deposit.
H1: There is a relationship between unique of product and Islamic saving deposit.

CHAPTER 3 - METHODOLOGY

Introduction
16

The chapter underlines the procedure involved in the study. It comprises the
research design, sampling procedure, variables specification and data collection
methods. Finally, it provides an outline of each procedure and statistical methods that
are employed to test the hypothesis.

Research Design
This study is to identify the factors that influence in choosing the Islamic saving
deposit among the non-Muslim customers in Bank Islam Malaysia Berhad, (BIMB) at
Kota Bharu, Kelantan. This basic research uses descriptive and correlation research
design. As been mentioned by Sekaran (2006), the descriptive study is undertaken to
study the relationship between the choses of Islamic saving account with all the
independent variables. The descriptive study were design to enables the researcher to
answer the research question and meet the research objectives. Lastly, the descriptive
research design is adopted as the study has clear problem statements, specific
hypotheses and detailed body of knowledge.

Source of Data

Primary data
In this study, the researcher will use the quantitative method which is
questionnaire to gather the required input. This method is to be employed
17

because questionnaires are the method that usually conducted, and it is quite
easy to conduct because they are standardized and also some types of error can
be avoided and the researcher can gathering information from a large number of
respondents efficiently. A set of questionnaire will be administered at the factors
that influence non-Muslim using Islamic saving deposit in the population area at
BIMB, Kota Bharu.

Secondary data
This study will also use secondary data from internet, journal, books and
the data stream at UMKs Library to obtain more information.

Population
When doing the sampling, the main part in this process is to determine the target
population for the study. According to Sekaran and Bougie (2010), population can be
defined as the entire group of people, events or thing of interest that will involve in the
research. In this study, the target population is non-Muslim customers in Bank Islam
Malaysia Berhad (BIMB), Kota Bharu who are used the service of Islamic saving
deposit in BIMB at Kota Bharu.

Sample Size
A sample size is the subset of the population. Since the population of the study
comprises of the non-Muslim customers that use the Islamic saving deposit service in
BIMB, Kota Bharu, therefore, a comprehensive list of customers for non-Muslim from
BIMB at Kota Bharu is needed in order to decide the sample size. But, the
comprehensive list is not available for the study. Such comprehensive list of customers
would require the BIMB to disclose their customers list alongside with the contact
details of the customers. However, such list could not be obtained from the banks due
18

to confidentiality reason. Hence, this study employs a non-probability sampling

method, instead of a probability sampling.
The data required for fulfilling the objectives of the study. According to Khan,
Hassan and Shahid (2008) in their study of Banking Behavior of Islamic Bank
Customers in Bangladesh also used the same method to obtain the sample size. The
sample size of their study is 100 customers. Therefore, in this study the same of
sample size will be used as questionnaires to distribute among the non-Muslim
customers in BIMB, Kota Bharu.

Sampling Design
Purposive sampling is one of the sampling methods under non-probability sampling
design. This method of sampling is necessary to obtain information from the specific
target groups. The sampling here is narrowed to the specific types of people who can
provide the desired information, either they are the one who have it, or conform to
some criteria set by the researcher. Furthermore, there are two types of purposive
sampling such as judgment sampling because it uses a limited number of category of
people that have the information related to the study. Here, this study only focused on
non-Muslim customers who are used the service of Islamic saving deposit in BIMB at
Kota Bharu.

Unit of Sampling
Unit of sampling is the major entity that researchers analyze (William, 2006). For
this study, the unit of analysis focuses on the non-Muslim customers in Bank Islam
Malaysia Berhad (BIMB), Kota Bharu.

Research Instrument
19

The researcher will distribute questionnaire to the selected respondents to gather

the required input. The questionnaires will be used to the abstract information needed
into specific responses that can be measured. The questionnaire will divide into three
section; A, B and C.

Section A consists of questions about the demographic profile of the

respondents.

ii

Section B consists of questions pertaining to the independent variables, which

are factor of rate of return, awareness, services and unique of product would
be influences of Islamic Saving Deposit in Bank Islam Malaysia Berhad
(BIMB), Kota Bharu among Non-Muslims Customer.

iii

Section C consist the items on dependent variables, which is the Islamic

Saving Deposit in Bank Islam Malaysia Berhad (BIMB), Kota Bharu among
Non-Muslims Customer.

All the items to be included in Section B and Section C were set on Likert Scale, which is a
five points of scale, which is interpreted as such;

= Strongly Disagree

= Disagree

= Neutral

= Agree

= Strongly Agree

20

Validity and Reliability of Study

A pilot study has been carried out to determine and ensure the validity of the
questionnaire designed. The purpose of this pilot study is to test the research
instruments validity and reliability and also to identify any ambiguity. Upon completing
the pilot study, corrections and amendments are made to improve the instruments.

Data Analysis Techniques

The data will be analyzed by using quantitative data analysis. The quantitative data
analysis is including Statistical package of Social Science (SPSS) variant 22,
descriptive statistics, reliability analysis, multiple regression analysis, Pearson
correlation and Correlation coefficient. The explanation about the techniques is as
follow:
Statistical package of Social Science (SPSS) variant 22 is one a method using
the software to perform data entry and analysis and to create table and graph. There
are many advantages when using the SPSS software. One of advantage is effective
data management and easy to get the analysis of data.
In addition, the descriptive analysis is to summarize a given set of data, which
can either be a representation of the entire population or sample. The measure used
to describe the data set measure of central tendency and measure of variability or
dispersion. In the questionnaire, the respondent will asked to answer the question
about their aged, gender, religion, educational level, occupational and income.
Other than that, reliability analysis will be performed to investigate on the rigor of
the respond.

The reliability analysis of each composite of question based on

Cronbachs alpha value associated with them was greater than 0.7. The table below
summarizes the rules of thumb.

21

Alpha Coefficient Alpha

< 0.6
0.6 to < 0.7
0.7 to < 0.8
0.8 to < 0.9
0.9 >

Strength Of Association
Poor
Moderate
Good
Very good
Excellent

Table 1.1 Hair et al, (2003) Rules Of Thumb for Cronbachs alpha

Multiple regression analysis is a powerful technique that used for predicting the
unknown of a variable from the know value of two or more variable. The researcher will
use more than one independent variable to explain variance in a dependent variable.
Person correlation is the common to measure correlation. It will reflect the degree
linear relationship between two variables, which is between each of the dependent
variable and the independent variable.
Correlation coefficient defined as a statistical measure of the degree to which
change to the value of one variable predict change to the value of another. Correlation
coefficient is expressed as values between +1 and -1.

22

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