Opportunities And Challenges For Introducing Interest Free Banking: Case Study On Selected Private Commercial Banks In Ethiopia

Abstract

Various potential Muslim consumers avoid using the regular banks that are currently operating in the nation because they believe doing so is against their religious beliefs. Additionally, because they have limited banking options, the impoverished are unable to save any of their little earnings. This general objective of the study is to assess challenges and opportunities in interest-free banking among particular private banks in Ethiopia. The study employed mixed research approach to achieve research objectives. In line with this descriptive research design was used to answer the study objectives. Simple probability sampling was used to collect date from 240 samples. Data were collected using structured questionnaire and from primary sources, collected data was analyzed using descriptive statistics. Finding of the study revealed that there are challenges that hinder interest free banking in Ethiopia, yet there are opportunities that can foster the development of the sector. Recommendations like there needs to be training and other awareness creation campaigns to create awareness to the general public and to Muslim community in Particular, since human resource is ranked first as a challenge, arranging training and capacity building programs is advisable. Opportunities needs to be grabbed to enhance the interest free banking in Ethiopia.