Challenges and Opportunities of Interest-Free Banking in Ethiopia: the Case of ZamZam Bank S.C
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Date
2022-12-04
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A.A.U
Abstract
A descriptive study was conducted on ZamZam Bank S.C. in order to analyze the
challenges and opportunities related to operating fully interest-free banking in this
situation, Directors, managers, officers, and other ZamZam Bank S.C, stakeholders made
up the population of this study. Data were collected from a total of 38 respondents using
structured questionnaires that were given to the Bank and completed by bank employees
and stakeholders of ZamZam Bank who were aware of the interest-free banking
operation. The findings showed that, lack of IFB operation specialists, lack of customer
awareness of IFB services, and the necessity for special legislation were the primary
problems facing IFB. On the other hand, IFB providers who would use customer
satisfaction as their area of competence in providing IFB services were thought to still
have a significant untapped market in Ethiopia. Other possible chances were global
trends, Ethiopia's economic expansion, and investment opportunities. The findings
suggest that the advantages of interest-free banking exceed the drawbacks both at
ZamZam Bank specifically and throughout Ethiopia generally. Several recommendations
were made in relation to the study's findings; Revenue authority should consider taxation
issues regarding IFB financing products, adequate IFB products and services promotions
to public, National Bank should take some special considerations in policy making
regards to IFB operations and adequate training campaigns should undertake from the
Bank.