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.

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