Comparative study of customer’s and service provider’s orientation towards Islamic banking: With reference to a selected banks in Dar es salaam (NBC, KCB and AMANA BANK)
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Date
2013
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Publisher
Mzumbe university
Abstract
This study has been carried out to identify customer’s and service provider’s orientation towards Islamic Banking. Islamic Banking is a financial institution that operates with the objective to implement and materialise the economic and financial principles of Islam in the banking arena. Islamic banking like any other banking system, must be viewed as an evolving system. No one dispute that there is a definite desire amongst Muslim savers to invest their savings in way that are permitted by the Islamic Shariah. The Islamic banking system is currently gaining momentum. Many international conventional banks have started to open branches which operate in accordance with the Islamic Shariah principles including Tanzania. The Islamic banking system is expected to face strong competition not only from the Islamic banks but also from well-established conventional banks offering Islamic products and services. In this study, an attempt was made to assess customers and service providers orientation towards Islamic Banking services. A sample of 50 respondents took part in this study with three different organisations (Banks) in Dar es Salaam, being KCB, NBC, and Amana Bank. The analysis of their responses revealed that Islamic Banking not only deal with Muslim customers but also non-Muslim customers even though most Muslim customers seem to be grateful for the services due to Riba free system which is against their faith. And both bank employees and the customers are very much aware of the Islamic banking services. However, being Sharia compliance, these banks also generate profit like other convectional banks, even though there is a certain degree of involvement on religious belief of many of the Islamic bank’s facilities and products. The big challenge was associated with the training and experience of staffs, and sometimes the Muslims themselves are not very much aware of Islamic principles involved in Islamic banking. The managers have admitted that this product helps to increase profitability and also it is another new way of ensuring customer retention. In general findings have indicated that there is an increase in the use of Islamic Banking services as well as increase in the customer’s awareness about the product.
Description
A dissertation submitted to Mzumbe University as a partial fulfilment of the requirements for the award of the degree of Masters of Business Administration (MBA) of Mzumbe University
Keywords
Islamic banking., Islamic banking system, Financial institutions
Citation
APA