Assessing the Feasibility of Islamic Banking in Ghana- A Case Study in Ashanti Region

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July, 2015
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The banking industry in Ghana has been receiving heated debates as to whether the regulator of the Ghana Banking Industry should give the licence to the operation of Islamic banking in Ghana. It is upon this heated debate that this study sought to assess the feasibility of Islamic Banking in Ghana. The specific objectives that guided the study were to assess the knowledge and perceptions of Ghanaians regarding Islamic Banking, the indicators that make the adoption of Islamic Banking to be feasible and also the barriers to the feasibility of Islamic Banking in Ghana. Exploratory research design was employed to a sample of 200 respondents from the Kumasi Metropolis and other rural communities of the Ashanti Region for the study. The study reveals some interesting results for policy formulation, planning, and bridging the knowledge gap. On knowledge about Islamic Banking among the research population, the study revealed that the knowledge of the research population is very low even though majority of the respondents showed interest in doing business with an Interest free banking system by adhering to some of the principles and laws regulating interest free banking. The study also reveals among other things that Islamic banking would be feasible in the Ghanaian banking industry. However, the application of the Islamic shar’iah and the deposits of the depositors to the bank not earning predetermined interest rates were found to be the main challenges that would serve as barriers to the feasibility of Islamic banking in Ghana. The study thus recommends that the regulator of the banking industry in Ghana should grant the licence to the operation of Islamic banking in the country whiles scholars and practitioners of the Islamic banking should also conducts series of studies and education that would be geared towards demystifying the concepts in the Shar’iah which governs the activities of Islamic banking.
A Thesis submitted to the Department of Accounting and Finance, Kwame Nkrumah University of Science and Technology in partial fulfilment of the requirements for the degree of Master of Business Administration (Finance Option)