Previous research identified factors that affect the adoption of Islamic home financing in Nigeria without considering ethnicity. Nigeria is a multicultural country and each geographic region maintains is religion and culture. Due to this, ethnicity can often be a significant problem in Nigeria. However Islamic finance is for everyone irrespective of ethnicity, culture or religion. This paper integrates and expands upon earlier studies using the decomposed theory of planned behaviour and structural equation modelling (SEM) multigroup analysis to determine the differences among the three major ethnic groups based on their intention to adopt Islamic home financing. The result from a survey of 518 potential home buyers from the three major ethnic groups in Nigeria indicates differences in their perception of Islamic home financing. The chi-square difference reveals that the differences are significant and the path estimates indicate that Hausas have the strongest intention to adopt Islamic home financing. This study will serve as a reference for academicians who could replicate the theory and method used in this study for further research. It will also help bankers and regulators to promote Islamic banking among all the ethnic groups to emphasise that Islamic finance is not for only one religious group or ethnicity.

There is urgent need to finance affordable housing, especially in Nigeria. As of 2015, the number of Muslims stands over 80 million. This emphasises the need for Shari'ah compliant home financing to suit the demands of their faith. The immutable principles of Islamic commercial transaction that prohibit riba and gharar has drawn up a sharp distinction between the concepts of Islamic and conventional home financing. Nonetheless, despite the establishment of Islamic banking in Nigeria and the willingness of Muslims to embrace it, home financing in Nigeria remains largely conventional. Drawing on a review of literature on Islamic finance in Nigeria, this paper examines factors that may hinder the implementation of Islamic home financing in Nigeria. The study revealed that low level of awareness, lack of long-term financing, religious and cultural disparity, and an unfavourable framework are main factors hindering the adoption of Islamic home financing in Nigeria.

Studies have examined the intention of home buyers to adopt Islamic home financing without considering the effect of religion. The present study, therefore, examines the moderating influence of religion on the adoption of Islamic home financing. The study used the decomposed theory of planned behaviour and SEM multigroup analysis approach. Data collected from 518 prospective home buyers in Nigeria using survey questionnaires indicates a difference between Muslims and non-Muslims. The chi-square result shows that the difference is significant and that religion moderates the relationship between independent variables (attitude, subjective norms, perceived behavioural control) and dependent variable (intention). This paper discusses the implications for academicians to replicate the method used in this study and the stakeholders and bankers to promote Islamic finance. It suggests that religious disparity should be avoided in order to promote Islamic finance and create awareness irrespective of religion.

The perceptions of customers towards Islamic banking and its products is not a new area of research in Islamic finance. However, the previous studies mainly used the theory of reasoned action (TRA) and theory of planned behaviour (TPB). This study deems it necessary to decompose the factors that can influence human behaviour into the relevant variables in Islamic finance. Due to it is comprehensiveness and influence on perception, the study used the decomposed theory of planned behaviour (DTPB) to examine the factors that can influence homebuyers' intention to adopt Islamic home financing. A survey was conducted among 518 potential homebuyers in Nigeria, and the data were subjected to structural equation modelling. The study results revealed that attitude, subjective norms and perceived behavioural control influence the customer's intention to adopt Islamic home financing in Nigeria, while knowledge of Islamic finance and cost-benefit influence their attitude towards the intention. The DTPB can be used to understand customers' intention to adopt Islamic financing products. This study offers bankers insight into important factors to market their products, and help lawmakers understand why they should promote Islamic finance.