Propensity toward Islamic debt financing among Moroccan MSMEs: assessing the mediating effect of entrepreneurial achievement motivation using PLS-MGA

Purpose This study investigates the factors influencing the intention to use Islamic Debt Financing (IDF) among owners-managers of Micro, Small, and Medium Enterprises (MSMEs) in Morocco. Design/methodology/approach We developed and validated a comprehensive model that examines the key behavioral elements affecting attitude towards IDF, entrepreneurial achievement motivation, and IDF usage intention. Entrepreneurial achievement motivation was assessed as a mediator in the relationship between attitude towards IDF and usage intention. Gender and Islamic religiosity were examined as moderators through Multi-Group analysis. Utilizing data from 266 Moroccan MSMEs, we applied structural equation modeling for empirical evaluation. Findings Results revealed direct relationships with financial literacy, risk perception, and cost perception negatively affecting attitude toward IDF. Financial suitability is inversely related to attitude toward IDF. Entrepreneurial self-efficacy and subjective norms positively influenced entrepreneurial achievement motivation. Attitude toward IDF positively impacted entrepreneurial achievement motivation, and both attitude toward IDF and entrepreneurial achievement motivation were linked to the intention to use IDF. Empirical findings indicated that entrepreneurial achievement motivation partially mediates the relationship between attitude towards IDF and usage intention. Multi-group analysis revealed a significant moderating effect of Islamic religiosity on three out of nine structural relationships. Research limitations/implications This study is primarily limited by the absence of a longitudinal examination tracking real usage behavior. Moreover, data collection focused on analyzing the behavioral intention to use Islamic debt-based financing products, excluding equity-based financing instruments. Finally, our proposed model concentrates on establishing usage intention solely based on demand-side factors without explicitly integrating supply-side consideration. Practical implications Our findings contribute to a deeper understanding of IDF adoption behavior and have the potential to support the development of more effective public policies, targeted promotional campaigns, and impactful financial education programs for MSMEs in similar markets. Originality/value This paper represents the first attempt to address MSMEs’ apprehensions regarding Islamic debt-based financing products in the MENA region.