Challenges of Interest Free Banking in Ethiopia Commercial Banks the case of selected private banks

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The study aims at identifying the challenges of interest free banking in Ethiopia commercial banks. To achieve this objective descriptive research design was used and data has been collected mainly through primary source using questionnaire and personal interview from interest free banking customers and staffs of the bank. Secondary data were also used by reviewing the annual reports, and NBE and browser the bank. Total sample IFB customers and staffs of the bank constitutes 384 and 179 respectively total of 560 sample respondents were in use through multistage sampling. The data was analyzing via descriptive occurrence, statistics of mean and percentage using SPSS version 20 Software. The result show that IFB services have been benefit banks, not single in expressions of rising customers and mobilize deposit, but also they enjoy FCY making and better profitability. In addition the outcome indicate lack of legal support from government, lack of supervision by NBE, lack of awareness human resource, lack of confidence and trust of clients, lack of cooperation among Islamic windows and lack of infrastructure appropriate for IFB function and uncertainty of customers identified by the practitioners as foremost challenges in the procedure of contribution IFB services in Ethiopia. as a result, the lessons suggest that there should be dynamic public clarification programmers to build more attentiveness and to take away misunderstanding and uncertainty among Muslim and non-Muslim; Shareholders, board of directors and the management of the bank should accept the concept and be cooperative with interest free banking consequently, the following recommendations were forward by the researcher based on the consequences of the result in combination with writing review reflection: antagonistic promotion and marketing operation about IFB products, suggest sustainable and permanent training to build the capability of the manpower, the bank shall enhance simplicity of admission of its products with in every part of branches, the bank has just before have Shariah advisor, the bank should provide the essential understanding and center for the industry and the bank has to be obvious in its IFB business responsibility, in adding together government be supposed to practice well-matched authoritarian structure.



Interest free banking, Interest free banking window, Shariah compliance