Decision Making and Patronage Behaviour in Islamic Co-operatives in Aceh, Indonesia
(1) Faculty of Economics and Business, Syiah Kuala University
(2) Universitas Syiah Kuala
(3) Universitas Syiah Kuala
(4) Universitas Syiah Kuala
Abstract
Although the number of Islamic co-operatives' memberships only amounted to 2.51 million people (11.19%) to the total membership of co-operatives in Indonesia nationwide, but it has shown a rising trend in its membership by 76.11% over the last decade (Ministry of Co-Operatives & SMEs, 2019). These figures raise an essential research question: what drives the decision of Indonesian citizens to patronage Islamic co-operatives? Specifically, this study explores pertinent determinants of decision-making made by the members to select Islamic co-operatives in Aceh, Indonesia. A number of 280 members and non-members of Islamic co-operatives were selected as the sample of the study using a purposive sampling technique. Based on the logistic multiple regression technique, the study recorded that the members' decision-making in selecting Islamic co-operatives was mainly determined by their shari'ah compliance and characteristics' uniqueness. Meanwhile, physical facilities and services quality provided by the Islamic co-operatives have insignificant effects on the people's decision-making to become the memberships of Islamic co-operatives. This empirical evidence suggested that to attract more memberships, the Islamic co-operatives should improve their shari'ah compliance and characteristics' uniqueness.
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