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The Determinants of the Demand on Islamic Banking and Conventional<br />

Banking Products in Malaysia<br />

Nor Shazreen binti Sahat<br />

Supervisor: Dr. Zairihan binti Abdul Halim<br />

Bancelor of Economics (Natural Resources)<br />

School of Social and Economic Development<br />

This study aims to investigate the factors determining the demand for Islamic and<br />

conventional banking products in Malaysia, specifically deposit and loans. The four factors<br />

examined in this study are the base lending rates, per capita income, inflation rate and<br />

economic growth (GDP) in Malaysia for seven years period from 2009 to 2015. The data<br />

collected are from secondary source where 15 Islamic bank and 16 conventional bank<br />

annual reports reviewed. This data is then analyzed using the Multiple Linear Regression<br />

Model (MLRM) method. The results show that the above four factors strongly influence<br />

the demand for deposits and loans at Islamic and conventional in Malaysia. The finding<br />

suggests that the macroeconomic factors significantly influence the demand for deposit<br />

and loan for types of banking in Malaysia.<br />

1461 | UMT UNDERGRADUATE RESEARCH DAY 2018

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