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The lack of financial capital is the main problem faced by the smallholder palm oil farmers (Pekebun Kecil Sawit Persendirian, PKSP) in order to increase the productivity of palm oil. Although there are six Islamic banking institutions that provide micro credit for the farmers, this product however does not get a good response from the farmers especially among the PKSP. In order to dismantle the factors of the PKSP having less interest to take up the micro credit from Islamic banking institutions, this paper employed Al-Ghazali's concept of intention to achieve two research objectives. In regards to the first objective, this research analyses the effects of behaviour towards Islamic micro credit, obstacle factor, and the benefit of perception on the intention to use Islamic micro credit. In regards to the second objective, this research analyses the effects of obstacle factor and the benefit of perception on the behaviour towards Islamic micro credit. This research was conducted at the district of Hilir Perak, Malaysia involving 362 PKSP to understand this phenomenon. The research data were obtained from a questionnaire which was analysed using structural equation modelling (SEM). It was found that the obstacle factor and behaviour towards Islamic micro credit influence the intention to use Islamic micro credit, while the benefit of perception was found to be insignificant in influencing the intention. This paper also found that the behaviour towards Islamic micro credit is developed and influenced by the benefit of perception. It can be concluded that the PKSP are less interested to take up the Islamic micro credit for agricultural purpose because the features of micro credit product offered by the Islamic banking institutions are less attractive and not competitive. In this case, this paper recommended the Islamic banking institutions to improvise their micro credit product offerings and develop strategic relationship with other industrial players to reduce business risk and eventually offer a competitive micro credit product in the market. [ABSTRACT FROM AUTHOR]