Altruism, Reciprocity and Depositors’ Loyalty: Empirical Study of Islamic Bank Industry

Abstract

This paper examines the effect of altruism and reciprocity on mudharabah depositors’ loyalty of Islamic banks, both directly and through the mediation roles of trust and satisfaction. This study analyzed 280 samples of Islamic bank depositors. Using SEM-PLS, this study examined the association between altruism, reciprocity, trust, and satisfaction. The results showed that altruism and reciprocity had a positive and significant effect on the loyalty of mudharabah depositors directly and by the mediating roles of trust and satisfaction. Altruism's direct relationship to loyalty was better than reciprocity, and trust mediation was better than satisfaction. This study provides an opportunity for Islamic banks to increase the loyalty of mudharabah depositors by improving strategies to encourage depositors’ altruism and trust. In terms of altruism, this study recommends Islamic banks to expand the accessibility of mudharabah deposit funds for small entrepreneurs. In terms of trust, this study recommends Islamic banks to increase micro-enterprise financing and create attractive profit sharing for depositors. This paper is the first to integrate altruism, reciprocity, trust and satisfaction factors to predict mudharabah depositors’ loyalty of Islamic banks.

Keywords: Altruism, reciprocity, trust, satisfaction, mudharabah depositors’ loyalty, Islamic bank