Potentials of Islamic Banks in the Swahili Territories: A Case Study of Kenya
Aja Fatou Senghore *
University of The Gambia, School of Business and Public Administration, The Gambia.
Cherno Jallow
University of The Gambia, School of Business and Public Administration, The Gambia.
*Author to whom correspondence should be addressed.
Abstract
Aims: Islamic finance is becoming an increasingly significant component of the global financial industry, influencing a diverse range of markets and economic sectors worldwide. The paper examines the potentials of Islamic banks within the Kenyan financial landscape. The study's objective is to investigate these opportunities and identify the requisite resources for their successful realization.
Methodology: The study employs a comprehensive literature review methodology, synthesizing existing research on Islamic banking in Kenya to identify key trends, challenges, and opportunities.
Results: The findings indicate significant demand for Shari’ah-compliant financial products as a primary driver for the establishment of Islamic banks in Kenya. Although, the study reveals that the absence of a comprehensive Shari’ah-compliant legal framework landed the institutions into several challenges, causing a significant obstacle to its progress.
Conclusion: Despite these challenges, the study concludes that substantial potentials exist for Islamic banking in Kenya, particularly for investors willing to engage and invest in the Islamic finance sector. This potential could be supported through government’s efforts in creating a more level playing field for Islamic banks through policy initiatives, the sizable Muslim population in Kenya, and the promising trend of non-Muslim customers utilizing Islamic banking services. The study recommends the establishment of a national Shari’ah board, the implementation of capacity-building programs in Islamic finance, public awareness campaigns to promote Islamic finance concepts and principles, it also suggest further research to explore these issues in a greater depth.
Keywords: Islamic Banks, potentials, Swahili, Kenya