ABSTRACT
This study develops a comprehensive, objective measure of Islamic financial literacy (IFL) that encompasses six core concepts: general concepts, numeracy and computational skills, Islamic financial concepts, savings and investments, borrowing and financing, and financial protection. Seven practitioners working in the Islamic banking and finance industry in Malaysia were chosen to validate the measure before pilot testing on a sample of 403 working-age adult respondents. The financial literacy scores are compared across samples of students, general working adults, and bankers and significant differences are identified in the scores for financial protection; only marginal differences exist for general concepts, knowledge of Islamic financial concepts, and overall IFL scores. Among students, there are significant associations between respondent’s IFL and variables such as ethnicity, programme of study, and year of study, while among bankers, education level is positively associated with IFL. For general working adults, however, the study finds an insignificant relationship between most of the independent variables (demographic characteristics) and IFL.