The Effects of Interest Free Banking on Entrepreneurial Performance in Ethiopia:
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Date
2021-10
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A..A.U
Abstract
Even though, Islamic financing system is very debating and controversy phenomenon,
it is expanding continuously beyond Organizations of Islamic Countries. However, there
is no empirical evidence that point to the effects of Interest Free Banking on the key
economic drivers such as Entrepreneurship, small and medium enterprises particularly
in Ethiopia. Hence, this paper examined the effects of Interest Free Banking on
entrepreneurial performance in the case of Commercial bank of Ethiopia “CBE NOOR”.
The study explores seven independent variables (awareness, flexibility, support, Islamic
bank business ethics, entrepreneurial orientation and competitiveness and the
dependent variable is entrepreneurial performance). The research was employed
descriptive survey mixed approach and primary data gathered through questionnaire
and semi-structured interviewed. Respondents were selected purposive sampling
technique from Entrepreneurs who have business relationship with commercial bank
of Ethiopia Interest Free Banking dedicated windows and staffs delivering Interest free
banking services. There were 150 questionnaires distributed to Entrepreneurs and
information gathered from seven Interests free banking service delivering staffs
through semi-structured Interview. Analysis measured by Multinomial logistic
regression and reliability tested by spearman correlation test. The finding statistically
shows that awareness, support, entrepreneurial orientation, Islamic business ethics
has strong positive relationship between entrepreneurial performance in Ethiopia
context.
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Keywords
Interest free bank, Shariah principle, Islamic entrepreneurs, Islamic business ethics