Effects of awareness, opportunities and challenges on the growth of Islamic banks in Somalia

• Main Author: Dirie, Suado Mohamud
• Format: Thesis
• Language: English; English; English
• Published: 2023
• Subjects: HG Finance
• Online Access: https://etd.uum.edu.my/11214/1/permission%20to%20deposit-not%20allow-s829324_0001.pdf; https://etd.uum.edu.my/11214/2/s829324_01.pdf; https://etd.uum.edu.my/11214/3/s829324_02.pdf; https://etd.uum.edu.my/11214/

The bank is a significant financial institution that mobilizes public funds, providing customers with safe custody of savings and finance. However, in 1991, Islamic banking operations in Somalia ceased operations for more than two decades due to the civil war. Additionally, the growth has been hindered at the beginning of the 21st century because the government and the Central Bank of Somalia lack proper regulations. Thus, this study aimed to investigate the effects of awareness of customers, opportunities, and challenges on the growth of Somalia’s Islamic banks. It also used quantitative methods and sociological theory. In line with this research, 200 questionnaires were collected via convenience sampling. The data collected was analyzed using Statistical Package for the Social Science (SPSS) version 23. The findings of this study conclude some essential points about the reputation of Islamic banks among Somalians, their awareness level, and the shortcoming that hinders their growth in Somalia. It is found that most people have limited to no knowledge about the contracts and services provided by these Islamic financial institutions and do not know about Murabahah, Musharakah, Ijarah, and so on. In contrast, only a limited number of people have bank accounts. It was found that there are many opportunities for the growth of the Islamic banking industry in Somalia, as people feel safe using the services offered by Islamic banks. Besides, numerous challenges were recognized, such as the absence of a regulatory framework. This study will contribute to improving existing knowledge regarding the hurdles in the appropriate growth of Islamic banks of Somalia and the awareness and opportunities that help their development.