workie, Bantie (PhD)Abdu, Feysel2022-02-152023-11-042022-02-152023-11-042021-06http://etd.aau.edu.et/handle/123456789/30097The main goal of this study is to look at the challenges of interest-free banking in Ethiopia. Interest-free banking was launched in Ethiopia as an alternative to the banking industry within the existing conventional bank in window bases, and it operates in accordance with Shari’ ah principles. However, lack of Shari’ ah governance and dispute resolution system, cannibalization with conventional wing and lack of ownership, core banking system limitation and segregation of IFB fund, scramble in IFB marketing mix and product development have all hampered its activities. The study employed qualitative methods of analysis, with primary data collected through in depth interviews to test research objectives and respond to research questions. To achieve the objectives of the study interviewees were drawn from Dashen Bank S.C. Data was acquired via a semi structured in depth interview and purposive sampling from a sample of 19 IFB employees, of whom 10 of them interviewed. The results were examined using thematic analysis methods. The result showed that lack of robust Shari’ ah governance framework is the major setback to the operation of interest free banking, lack of ownership and commingling of funds lagged the operations of Interest free banking; capacity limitation on core banking system and loopholes in IFB organizational structure are also affected the growth of IFB business. Some scrambles in product development and IFB marketing mix (charging higher price than conventional price, weak distribution channel in case of click & Mouse technology and, undiversified IFB products and absence of Shari’ ah screening in IFB promotion) makes very limited provision for the operation of IFB in Ethiopia; and these key findings show that a major setback to the operation of IFB in Ethiopia found as institutional drawbacks. Weak and lack of supervisory framework, entry of Full fledge IFB banks and expansion of IFB dedicate branches by other banks, lack of institutional capacity are the major country level constraints found by the studyen-USInterest Free BankingShariaChallengesThesis