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Strategic Factors Influencing the Growth of Islamic Banks in Nakuru Sub-County, Kenya

Journal: International Journal of Science and Research (IJSR) (Vol.3, No. 10)

Publication Date:

Authors : ; ;

Page : 446-453

Keywords : Sharia Law; Sharia compliance; Islamic Banks; Banking; and Islamic Finance;

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Islamic banking has a recent origin as compared to its conventional counterparts. Islamic banking is sporadically progressing from being a relatively new sector in local and international finance to one viable economy can hardly do without. Islamic banking is enjoying stable growth even in the world of financial crisis at an average rate of 15 % growth. The growth has not been exceptional in the Kenyan scenario despite the small population of the Muslim community. Basing on this, it is important to look into the strategic factors affecting the growth of Islamic banks in Kenya. The study reviewed literature on sharia law and Islamic bank growth. The study adopted a descriptive study design in the empirical part of the study. Self-developed short structured questionnaires were distributed to the various respondents. The studys population was derived from two Islamic banks customers in Nakuru town having a customer base of 6929 persons. Data collected was edited, coded and analyzed using statistical package for social sciences (SPSS) version 21. Descriptive statistics presented in tables and charts were used to summarize and organize data and to describe the characteristics of the sample while inferential statistics were used to test the hypothesis. Pearson correlation coefficient was used to test the hypothesis. The study found that sharia compliance significantly influences the growth of Islamic banks in Kenya. The researcher recommended that Islamic banks administration should enhance its level of sharia compliance by putting systems in place that would enhance this.

Last modified: 2021-06-30 21:10:56