The general objective of this study is to assess the factor affecting the implementation of IFB banking service in Ethiopia particular reference to CBE, OIB, and OCB and Awash bank of Jimma district in Jimma city.
The study will be employed descriptive research design based on the survey and the data collected. The study will use both primary and secondary data which are quantitative and qualitative in its nature and will have been collected through structured and semi structured questioner and interview .a total of 423 sample respondents will be taken through multistage sampling. Of the total sample interest free banking customer and staff of the bank constitute 381 and 42 respectively, the data will be analyzed using descriptive statics of percentage, tabulation, frequency and mean.
Table of Contents
1.1 BACKGROUND OF THE STUDY
1.2 Statement of the problem
1.3 Objective of the study
1.3.1 General objective of the study
1.4 Research hypothesis
1.7 Organization of the paper
CHAPTER TWO
2.1 THEORETICAL LITIRATURE
2.1.1 Concepts of Interest Free Banking
2.1.2 Evolution of Islamic Banking
2.1.3 The Principles of Interest free banking
2.1.4 TYPES OF FINANCING IN ISLAMIC BANKING
2.1.5. Sources of Islamic legislation
2.1.6. Retail Islamic Banking Products
2.1.7. Islamic and conventional banking
2.2 EMPERICAL REVIEW
2.2.1 Studies related to Islamic banking in country specific studies
2.2.2 Studies related to Islamic banking in Ethiopia
2.2.3 Prospects of Islamic banking
2.2.6 Opportunities of Interest Free Banking in Ethiopia
2.2.7 IFB factors in Ethiopia
2.2.9 GAP IN THE LITRATURE REVIEW
2.2 CONCEPTUL FRAMEWORK
2.4 RESEARCH GAP
CHAPTER THREE
3.1 Research Design
3.2 Research approach
3.3 Source and type of data
3.4 Target population of the study
3.5 Sampling technique and sample determination
3.6 Method of data collection
3.7 Methods of data analysis and presentation
3.8. Data Analysis Method
4. COST AND TIME PLAN
4.1 Time Plan
4.2 Cost budget
Research Objectives and Focus Themes
The primary objective of this study is to examine the factors that affect the implementation of interest-free banking (IFB) in Ethiopia, focusing specifically on selected commercial banks within the Jimma district. The research investigates the prospects, customer demand, and operational challenges associated with providing IFB services while ensuring consistency with Islamic Shariah law.
- Prospects and potential for IFB expansion in the Ethiopian banking sector.
- Methods of deposit mobilization within an interest-free financial framework.
- Identification of institutional and operational factors hindering IFB implementation.
- Comparative analysis between conventional banking and Shariah-compliant retail products.
- Assessment of customer awareness and the role of regulatory directives.
Excerpt from the Book
2.1.1 Concepts of Interest Free Banking
Interest free (Islamic) banking refers to a system of banking or banking activity that is consistent with the principles of the Shari'ah (Islamic rulings) and its practical application through the development of Islamic economics. The principles which emphasize moral and Ethical values in all dealings have wide universal appeal. Shari'ah prohibits the payment or Acceptance of interest charges (Riba) for the lending and accepting of money, as well as carrying out trade and other activities that provide goods or services considered contrary to its Principles. While these principles were used as the basis for a flourishing economy in earlier times, it is only in the late 20th century that a number of Islamic banks were formed to provide an alternative basis to Muslims although Islamic banking is not restricted to Muslims.
Islamic banking appeared on world forum as a prominent player over two decades ago. But actually many principles of Islamic banking system have been generally accepted all over the world for centuries rather than decades Islamic financial system is existed in Muslim community in different shapes according to situation of time. Actually Islamic financial system has a capability to fulfil the society requirements in respectable way. Islamic banking is a growing sector with its diversity in different segments and spectrum. It caters to religious Muslims in Muslim’s societies as well as in countries where Muslims are in minority. In addition, it is a broad standard: non-Muslim individuals and communities that seek ethical financial solutions have also been attracted to Islamic banking. It is clear from banking practice that Islamic banking is equally popular in all communities (Iqbal, M., 1998).
Summary of Chapters
1.1 BACKGROUND OF THE STUDY: Provides a foundation on the global growth of Islamic banking and its emergence as an alternative to conventional interest-based systems.
1.2 Statement of the problem: Highlights the disconnect between the significant Muslim population in Ethiopia and the limited access to formal interest-free banking services.
2.1 THEORETICAL LITIRATURE: Explores the fundamental principles of Islamic banking, including Shariah compliance, types of financing, and key terminology.
2.2 EMPERICAL REVIEW: Reviews previous global and country-specific studies on the challenges and successes of implementing Islamic banking frameworks.
3.1 Research Design: Describes the descriptive research design used to assess the prospects and hurdles of IFB implementation in Jimma city.
4. COST AND TIME PLAN: Outlines the project timeline and the detailed budget required for the research study.
Keywords
Interest Free Banking, Islamic Finance, Shariah Law, Ethiopia, Commercial Banking, Deposit Mobilization, Murabaha, Musharakah, Mudarabah, Ijara, Financial Inclusion, Banking Challenges, Regulatory Framework, Economic Growth, Jimma District.
Frequently Asked Questions
What is the core focus of this thesis?
The research focuses on assessing the factors that influence the implementation of interest-free banking (IFB) services at selected commercial banks in the Jimma district of Ethiopia.
What are the primary thematic areas covered?
The work covers theoretical foundations of Islamic finance, regulatory frameworks in Ethiopia, customer awareness, challenges in product delivery, and potential for deposit mobilization.
What is the main objective of the study?
The main objective is to identify and examine the prospects and challenges that banks and customers encounter during the implementation and usage of interest-free banking systems.
Which research methodology is employed?
The study utilizes a descriptive research design with a mixed-method approach, incorporating both quantitative and qualitative data gathered through structured questionnaires and interviews.
What is discussed in the main body of the work?
The main body examines the evolution of Islamic banking, specific Islamic financing products like Murabaha and Ijara, and the institutional and operational obstacles encountered in the industry.
Which keywords best describe this research?
Key terms include Interest Free Banking, Shariah compliance, Ethiopia, Jimma District, deposit mobilization, and financial innovation.
How does the Ethiopian regulatory environment impact IFB?
The thesis explores how directives from the National Bank of Ethiopia allow for the operation of interest-free windows within conventional banks as a foundational step toward Islamic finance.
What is the role of 'Potential Customers' in the research?
The study highlights the existence of a large untapped market of Muslim and non-Muslim customers who are currently excluded from banking due to religious objections to interest (Riba).
- Arbeit zitieren
- Kero Gano (Autor:in), 2023, Factors Affecting the Implementation of Interest Free Banking (IFB). The Case of Selected Commercial Bank in Jimma District, München, GRIN Verlag, https://www.grin.com/document/1353193
