Muslims generally report high preference for Islamic financial products over the conventional ones, yet, when a choice is available they use non-Islamic financial products. This article uses a list experiment technique to look at this demand puzzle of preferences and use of Islamic financial products by Muslim borrowers of Islamic microfinance institutions in Pakistan. Comparing the direct and indirect responses of the borrowers, we find a significant difference in the preferences and borrowing behavior. This paper highlights important aspect of the demand puzzle and guide the future research to explore the determinants of this demand puzzle.