Analyzing Determinants of Saving Interest in Sharia Banks Using PLS SEM : The Mediating Role of Motivation and the Moderating Effects of Religiosity and Financial Literacy

Abstract

Introduction: Islamic banking continues to grow in Indonesia, including in regions such as East Nusa Tenggara (NTT). However, among its 22 regencies and cities, only Kupang City currently has operational Islamic banks, while the remaining 21 regencies lack access. Despite the increase in third-party funds (DPK), this uneven distribution raises questions about the factors that influence customer saving interest. Understanding these factors is essential for expanding Islamic banking services and strengthening public engagement in underserved areas.

Objectives: This study analyzes how income, knowledge, location, promotion, service quality, and public trust influence motivation and saving interest among Islamic bank customers in Kupang, with motivation as an intervening variable. It also explores the moderating roles of religiosity and financial literacy.

Methods: This study uses a quantitative explanatory approach with survey data from 205 Sharia bank customers in Kupang, analyzed using PLS-SEM.

Results: Public knowledge and trust positively affect motivation, which significantly drives saving interest. Location, promotion, service quality, and trust directly influence saving interest, while income shows no effect. Motivation mediates the link between trust and saving interest. Religiosity and financial literacy have no significant moderating effects

Conclusions: Enhancing public knowledge, trust, and service quality is key to increasing saving interest in Islamic banks, especially in underserved regions.