Sharia Investment Planning Influences: Islamic Financial Literacy, Religiosity, and Perceived Risk Among Y and Z Generations in the Idrisiyyah Order
DOI:
https://doi.org/10.22441/jiess.2023.v4i2.002Keywords:
Financial Literacy, Religiosity, Perceived Risk, Sharia Investment, SEM-PLSAbstract
Indonesia has demonstrated its capability to enhance economic activity through muamalah worship activities, as evidenced by its second-place ranking in the Islamic Finance Development Indicator globally. However, in West Java, the Islamic financial literacy index stands at only 18.06%, placing it in the sixth position and indicating low public literacy levels accompanied by a small investment index. Religion plays a crucial role in shaping individual financial decisions, with religiosity being a significant factor in Sharia investment planning among the public. Additionally, the perception of risk is equally important for potential investors. This study aims to analyze the impact of Islamic financial literacy, religiosity, and risk perception on Sharia investment planning among generations Y and Z of the Idrisiyyah Order. The theoretical framework is based on the Theory of Planned Behavior, supported by theories of Islamic financial literacy, religiosity (spiritual level theory), and risk perception. The research adopts a juridical-empirical approach with quantitative research methods and descriptive-analytical techniques, utilizing the SEM-PLS method for data analysis. The study involved 150 respondents from the Y and Z generations within the Idrisiyyah Order. The findings reveal a positive and significant influence of Islamic financial literacy, religiosity, and risk perception on Sharia investment planning among these generations. Higher levels of Islamic financial literacy lead to more informed and effective Sharia-compliant investment decisions. Strong religiosity influences individuals to engage in Sharia-compliant investments, aligning their financial practices with their religious beliefs and values. The perception of risk also significantly impacts Sharia investment planning, affecting individuals' willingness and approach to investing in Sharia-compliant financial products. The results suggest that financial institutions should play a pivotal role in enhancing Sharia investment planning by providing educational resources and opportunities to better understand risks associated with Sharia investments. This can empower potential investors to make more informed decisions and increase their confidence in participating in Sharia-compliant financial markets. In conclusion, this study underscores the importance of Islamic financial literacy, religiosity, and risk perception in influencing Sharia investment planning among the Y and Z generations of the Idrisiyyah Order. These findings offer valuable insights for policymakers, educators, and financial service providers aiming to promote Sharia-compliant investment practices.Downloads
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