Islamic financial literacy has been recognized as an important tool to increase inclusiveness. However, until today, structures for Islamic financial literacy have not been sufficiently studied, although such an attempt has been made in the literature. Therefore, it aims to develop structures for Islamic financial literacy and its determinants. Halal business is not just about halal ingredients and production. Besides focusing on halal production, the right Halal business operators should also concentrate on adopting Halal financing that is called Islamic financing. However, the assessment of the level of awareness, knowledge and skills of Halal and Islamic financing among business operators should be prepared. However, prior to assessing the awareness, knowledge and skill levels of Halal and Islamic finance among business users should be prepared. This paper aims to bridge the Halal Literacy and Islamic Financial Literacy on the attitude of Halal business producers towards Islamic financing adoption. This study proposes the measurement and validity approach for Halal Literacy and Islamic Financial Literacy. Halal Literacy and Islamic Financial Literacy are two crucial concepts where it can lead to the behavior of person towards its decisions especially in adopting Islamic financing. This study is attempted to contribute towards new theoretical knowledge especially in proposing the measurement items for Halal Literacy and Islamic Financial Literacy. This study also expected to help the policymaker to understand the level of literacy among consumers, especially from Halal business producer’s perspective. In addition, this article provides a validated framework for assessing the level of Islamic financial literacy, which also enables the community and researchers to expand their knowledge of Islamic financial literacy.

Factors Affecting Financial Literacy

There are many studies analyzing the factors affecting the financial literacy of an individual. A study by Lusardi et al. (2008) examined the financial literacy of young people using a longitudinal data. They found that financial literacy among young people is not only low, but also strongly associated with socio-demographic factors and family financial complexity. Meanwhile, the findings of the study by Ford and Kent (2010) show that female university students are less scared and less interested in the markets than their male counterparts. It was also found that women had lower financial market awareness than men. This finding is supported by Worthington (2006). In the study, it was found that financial literacy was at the highest level for individuals, professionals, business owners and university / university graduates aged 50 and 60 years. It was also found that literacy was the lowest in the unemployed, women, and people with low education and non-English speakers.

Islamic Financial Literacy and Halal Literacy

Studies on Islamic financial literacy can be considered as a new concept in the field of financial literacy. Currently, Islamic financial literacy has no widely accepted meaning due to its innovations (Abdullah, 2014). Similarly, due to the limited literature in the field, the review of the literature in this study is mainly based on contemporary research on financial literacy. In this study, measurement elements for Islamic financial literacy are based on the principles and method of Islamic finance. The studies focus on the main Islamic finance method in the Islamic bank such as Mudaraba, Mushareke, Ijarah, Murabaha, Istisna and Qard Hassan. Halal means legal or permissible things in Islam; Haram means things prohibited in Islam. Halal and Haram are explained with hadiths. However, there is a lack of knowledge and understanding of Halal, especially among Muslims, among Halal trade operators. People often consider halal and haram only in the process of producing goods. However, Halal in Islam includes all subjects in life. Halal is a very comprehensive term that refers to everything permitted in Islamic Law.

Relationship between Halal Literacy and Islamic Financial Literacy

The entire process in business must be halal on the basis of Islamic law. When a business person enters the production of Halal, the entire service must be Halal. In terms of financing, it may be necessary to finance the business or the company’s business. Business finance includes equity financing, debt financing and rent financing. There are two types of traditional financing and Islamic financing. As a halal food producer, Islamic finance should be chosen in such a way that Halal includes all aspects of life (Salehudin, 2011). Ishak and Man (2011) discussed the integration between Halal and Islamic finance on the Qur’an and Sunnah. They also stated that the integration between the two sectors was not a necessity (although it was imperative from the Sharia point of view). In this study, an integrative model of behavioral prediction (Fishbein, 2000; Fishbein and Yzer, 2003) was used to combine halal literacy and Islamic financial literacy. This theory is the extension of the Theory of Planned Behavior (Ajzen, 1985). The study will include skills and environmental factors from behavioral issues in the adoption of Islamic finance. People have the right attitudes, but the person may not be able to perform that behavior because of the presence of internal and external behaviors.

Methodology and Conclusion

Halal Literacy and Islamic Financial Literacy is recommended to test measurements, and 8 steps are recommended for better marketing structures (Churchill, 1979). This study will adopt the procedure proposed by Churchill in the development of measurement items for Halal Literacy and Islamic Financial Literacy. The necessary steps for this procedure are: 1) Specifying the structure domain; 2) Production of samples; 3) Data collection; 4) Taking clearance measures; 5) Data collection (again); 6) Evaluation of reliability; 7) Testing validity; and 8) the development of norms. This study attempts to contribute to new theoretical knowledge. The proposed measure for Halal Literacy and Islamic Financial Literacy can help the policy maker understand the level of literacy among consumers, especially from the perspective of the Halal trade producer. However, this study is limited to halal business operators in the food services sector. Measurement should also be applied in other sectors such as the pharmaceutical industry and cosmetics.