Islamic Banking prospects, opportunities and challenges in Ethiopia
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Date
2012-06
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A.A.U
Abstract
While Sharia compliant investment avenues are now becoming available in most
countries, in Ethiopia, most of the developments' of Islamic finance have taken place
in the last four years.
This study presents new evidence on awareness, prospects, challenges and
opportunities of Islamic banking in Ethiopia that are actually consistent with what
Islamic Banking literature has revealed about the operations of Islamic banking
elsewhere. To do so, descriptive research design of cross-sectional survey method
which is be observational in its nature is used to realize the objectives of the study.
To be specific, the analysis suggests that there is low level of awareness about the
operations of Islamic banking while respondents with different background has shown
statistically significant variance in terms of awareness, gross misunderstanding and
widely held long standing misconceptions about Islamic banking operations.
In addition, respondent 's prospects assessment score with regard to The operations of
Islamic banking is high and higher than average expected score while respondents
With different background has shown significant variance in terms of their assessment.
Moreover, lack of awareness, regulatory and supervisory challenges, institutional
challenges, lack of support and link institutions, gap in research and development in
Islamic studies as, lack of qualified human resource as well as wrongful association
with specific religion and the global terrorism movements in recent times has been
reported as one of the major problems facing Islamic banking in Ethiopia.
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Keywords
Islamic banking, awareness, understanding prospects, challenges