How Middle-Low Income Muslim Group Financially Reacts in Pandemic Crisis

Abstract

The purpose of this study is to determine factors constituting financial behavior of middle - low income group living in the sub-urbs area in Indonesia during a pandemic. This paper employs Structural Equation Modeling Partial Least Square (SEM-PLS), with a selection of 150 respondents that meet the criteria, based on: jobs, income, and house location (purposive sampling). The findings indicate that Islamic financial literacy, locus of control, and attitudes affect positively and significantly the financial behavior of this segment. While locus of control serves the highest factor, it is pertinent to emphasize the findings that Islamic financial literacy shows the lowest value than other variables. This situation has a real implication, essentially for policymakers and religious scholars, to create a continuous program targeting on improvements of Islamic financial literacy in general aiming on building a responsible financial behavior for middle-low income Muslim groups particularly during the pandemic crisis.