Prospects And Challenges Of Establishing Islamic Banks In Ethiopia

The purpose of the study is to identify the prospects and challenges of establishingrnIslamic banks. Seventy five survey instruments were distributed to assess the views of thernMuslim business community's awareness and attitude towards Islamic banking andrnbanking in general. The study also addresses favorable conditions and also challenges inrnthe establishment of Islamic banks. Books and articles from several websites werernextensively used in addition to the questionnaires. The study showed that even if there isrnlow awareness level among Muslim community about Islamic banking products,rnestablishment of Islamic banks is highly required by the Muslim business community. Thernstudy further showed that there are challenges like lack of professionals in the field ofrnIslamic banks. The study recommends that Islamic banks, which basically works underrnthe scheme of profit and loss sharing, should be established to cater divergent needs ofrndifferent customers particularly those who do not want to deal with interest. It alsornrecommends high level of support from the government particularly effective legalrnframework ensuring speedy justice is essential for the success of Islamic banking

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