Islamic Finance in Ghana: Can MSMEs Benefit?
Abstract
Objective – The purpose of this study is to examine the potential benefits of the implementation of Islamic Banking and Finance (IBF) in Ghana and opportunities for businesses using MSMEs as data source.
Design/Methodology – Primary data were obtained using questionnaires, where 400 questionnaires were distributed to MSMEs operators with a final sample of 308 respondents. The data collected were analyzed with SPSS 26.0 and the results were discussed.
Results – The findings reveal that MSMEs (businesses) are yearning for Islamic banking to reap several benefits such as alternative sources of funding, alternative source of savings, reduction of loan defaults and acceptance of Islamic banking among MSMEs. In addition, more males responded compared to females likewise majority of respondents are Muslims.
Research limitations/implications – majority of the respondents were Muslims though Islam is a minority religion in Ghana, hence may not reflect the views of the entire Ghanaian population.
Novelty/Originality – This study is the first of its kind in Ghana in terms of the data source and size of the sample used. This study is also a contribution to the limited literature of IBF in Ghana. The outcome of the study will guide government to design framework for IBF takeoff in Ghana.Keywords
References
Abdul-Wahab, A.-H., Bin, D., & Razak, A. (2019). Islamic Banking Adoption In Ghana. International Journal of Business, Economics and Law, 19(2).
Arhinful, E. (2021). Murtala Slams Ofori-Atta for Claiming Government Payroll is Full. City News Room.
Agyeman, N. K. (2020). Collapsed Financial Institutions: Minority Demands Accountability. Graphic Online, 1.
Alharahsheh, H. H., & Pius, A. (2020). A Review of key paradigms: positivism VS interpretivism. Global Academic Journal of Humanities and Social Sciences, 2(3), 39–43. https://doi.org/10.36348/gajhss.2020.v02i03.001
Alharbi, A. (2016). Uluslararası İslam Ekonomisi ve Finansı Araştırmaları Dergisi Development of Islamic Finance in Europe and North America: Opportunities and Challenges. International Journal Of Islamic Economics And Finance Studies. http://ijisef.org/
Alhassan, A. (2021). Continuous Professional Development Program for Professional Accountants . Tamale District Society-ICAG.
Aliyu, S. U. R. (2012). Islamic banking and finance in Nigeria: issues, challenges and opportunities. Munich Personal RePEc Archive, 42573. https://mpra.ub.uni-muenchen.de/42573/
Aqilah Zainordin, N., Selvaraja, M., Yee Man, N., & Soon Hoong, L. (2016). Challenges And Opportunities Of Islamic Banking And Financial Institutions In Malaysia. South East Asia Journal of Contemporary Business, Economics and Law, 10(1).
Azad, A. S. M. S., Azmat, S., & Hayat, A. (2023). What determines the profitability of Islamic banks: Lending or fee? International Review of Economics & Finance, 86, 882–896. https://doi.org/10.1016/j.iref.2019.05.015
Badruddin, A. (2015). Islamic Banking and Finance in India: A Kosher or Myth. International Journal of Management, Innovation & Entrepreneurial Research, 1(1), 01–06. https://doi.org/10.18510/ijmier.2015.111
Bananuka, J., Kaawaase, T. K., Kasera, M., & Nalukenge, I. (2019). Determinants of the intention to adopt Islamic banking in a non-Islamic developing country: The case of Uganda. ISRA International Journal of Islamic Finance, 11(2), 166–186. https://doi.org/10.1108/IJIF-04-2018-0040
Bananuka, J., Mukyala, V., Tumwebaze, Z., Ssekakubo, J., Kasera, M., & Najjuma, M. S. (2020). The intention to adopt Islamic financing in emerging economies: evidence from Uganda. Journal of Islamic Accounting and Business Research, 11(3), 610–628. https://doi.org/10.1108/JIABR-07-2017-0108
Bank of Ghana. (2016). Act 930 Banks And Specialised Deposit-Taking Institutions Act, 2016.
Bank of Ghana (2020). Bank Of Ghana Banking Sector Report P a g e | 2.
Bank of Ghana (2021). Bank Of Ghana F G O H K Annual Report and Financial Statements. www.bog.gov.gh
Bank of New York Mellon (2021). The Growing Global Appeal of Islamic Finance. In BNY Mellon. https://www.gulfcapitalmarket.org/wp-content/uploads/2021/03/BNY-Insights-The-Growing-Global-Appeal-of-Islamic-Finance.pdf
Brekke, T. (2018). Halal money: Financial inclusion and demand for islamic banking in Norway. Research and Politics, 5(1). https://doi.org/10.1177/2053168018757624
Broni, E., Yaw, M., & Broni, M. Y. (2018). Munich Personal RePEc Archive Challenges In Establishing An Islamic Banking And Finance System: Evidence From Ghana.
Charag, A. H., Fazili, A. I., & Bashir, I. (2020). Determinants of consumer’s readiness to adopt Islamic banking in Kashmir. Journal of Islamic Marketing, 11(5), 1125–1154. https://doi.org/10.1108/JIMA-10-2018-0182
Duba, Y. M. (2020). Factors Affecting Uptake Of Islamic Banking Services In Kenya [United States International University- Africa]. https://erepo.usiu.ac.ke/bitstream/handle/11732/5997/Yasmin%20mohamed%20DUBA%20MBA%202020.pdf?sequence=1&isAllowed=y
Ethica (2019). Handbook Of Islamic Finance (2nd ed.). Ethica Institute of Islamic Finance 2035 Sunset Lake Road. www.EthicaInstitute.comwww.EthicaInstitute.com
Ezeh, P. C., & Nkamnebe, A. D. (2020). The prospects of Islamic banking in Southeast of Nigeria. Journal of Islamic Marketing, 11(1), 251–267. https://doi.org/10.1108/JIMA-03-2016-0023
GCB Bank PLC. (2023). Sector Industry Study Small Medium Enterprises (SME’s) SECTOR IN GHANA. https://www.gcbbank.com.gh/research-reports/sector-industry-reports/361-sme-sector-in-ghana-2023-v1/file
Ghana Statistical Service. (2021). About the 2021 Population and Housing Census. www.census2021.statsghana.gov.gh
ICD - Refinitiv Islamic Finance Report. (2022). Islamic Finance Development Indicator Report 2022. http://bit.ly/IFDI2022.
Ikra, S. S., Rahman, Md. A., Wanke, P., & Azad, Md. A. K. (2021). Islamic banking efficiency literature (2000–2020): a bibliometric analysis and research front mapping. International Journal of Islamic and Middle Eastern Finance and Management, 14(5), 1043–1060. https://doi.org/10.1108/IMEFM-05-2020-0226
Institute Of Chartered Accountants Ghana (2019). Paper 2.4 - Financial Management. Emile Woolf International Bracknell Enterprise & Innovation Hub Ocean House, 12th Floor, The Ring Bracknell, Brekshire, RG 12 1AX.
Kitamura, H. (2021). Journal of Current Southeast Asian Affairs Policymakers’ Logic on Islamic Banking: Islamic Banking as an Ethno-Political Tool in Malaysia. In Journal of Current Southeast Asian Affairs (Vol. 40, Issue 2).
Mbawuni, J., & Nimako, S. G. (2017). Determinants of Islamic banking adoption in Ghana. International Journal of Islamic and Middle Eastern Finance and Management, 10(2), 264–288. https://doi.org/10.1108/IMEFM-04-2016-0056
McNett, M., Tucker, S., Zadvinskis, I., Tolles, D., Thomas, B., Gorsuch, P., & Gallagher-Ford, L. (2022). A Qualitative Force Field Analysis of Facilitators and Barriers to Evidence-Based Practice in Healthcare Using an Implementation Framework. Global Implementation Research and Applications, 2(3), 195–208. https://doi.org/10.1007/s43477-022-00051-6
Meisamy, H., & Gholipour, H. F. (2020). Challenges Facing Islamic Banking In Iran: Evaluation And Policy Implications. Journal of Islamic Monetary Economics and Finance, 6(3), 621–640. https://doi.org/10.21098/jimf.v6i3.1241
Maccido, M. (2021). Islamic Finance International Conference -Personal Communication.
Mooneeram-Chadee, V. (2020). The regulation of Islamic banking in Mauritius. ISRA International Journal of Islamic Finance, 12(2), 265–280. https://doi.org/10.1108/IJIF-09-2019-0139
Nantogmah, I. (2017). Accessing Potentials of Islamic Banking in Ghana [Masters]. University For Development Studies.
Ogunbado, A. F., Ahmed, U., & Abubakar, Y. S. (2017). Islamic Banking and Finance in Nigeria: Exploration of its Opportunities and Challenges. In International Journal of Innovative Knowledge Concepts (Vol. 5, Issue 8). www.worldometers.info
Opara, V., Spangsdorf, S., & Ryan, M. K. (2023). Reflecting on the use of Google Docs for online interviews: Innovation in qualitative data collection. Qualitative Research, 23(3), 561–578. https://doi.org/10.1177/14687941211045192
Possumah, B. T., Karikari Appiah, M., & Hilmiyah, N. (2018). Determinants of islamic banking adoption across different religious groups in Ghana: A panoptic perspective. Journal of International Studies, 11(4), 138–154. https://doi.org/10.14254/2071
Riaz, U., Burton, B., & Monk, L. (2017). Perceptions on the accessibility of Islamic banking in the UK—Challenges, opportunities and divergence in opinion. Accounting Forum, 41(4), 353–374. https://doi.org/10.1016/j.accfor.2017.10.002
Rizvi, S. A. R., Narayan, P. K., Sakti, A., & Syarifuddin, F. (2020). Role of Islamic banks in Indonesian banking industry: an empirical exploration. Pacific Basin Finance Journal, 62. https://doi.org/10.1016/j.pacfin.2019.02.002
Selvanathan, M., Nadarajan, D., Zamri, A. F. M., Suppramaniam, S., & Muhammad, A. M. (2018). An Exploratory Study on Customers’ Selection in Choosing Islamic Banking. International Business Research, 11(5), 42. https://doi.org/10.5539/ibr.v11n5p42
Sguazzin, A. (2022, December 2). Next Africa: Groundhog Day as Ghana Seeks IMF Help a 17th Time. Bloomberg Newsletter.
Shabbir, M. S., & Rehman, A. (2019). Layers of misconceptions about Islamic banking: Are Islamic banks threats, challenges and opportunities for investors? Journal of Islamic Marketing, 10(3), 874–892. https://doi.org/10.1108/JIMA-02-2018-0026
Sudarsono, H., Tumewang, Y. K., & Kholid, M. N. (2021). Customer Adoption of Islamic Banking Services: Empirical Evidence from Indonesia. Journal of Asian Finance, Economics and Business, 8(3), 1193–1204. https://doi.org/10.13106/jafeb.2021.vol8.no3.1193
Swanson, D. J., & Creed, A. S. (2014). Sharpening the Focus of Force Field Analysis. Journal of Change Management, 14(1), 28–47. https://doi.org/10.1080/14697017.2013.788052
Taherdoost, H. (2016). Sampling Methods in Research Methodology; How to Choose a Sampling Tech-nique for Research. International Journal of Academic Research in Management (IJARM). https://hal.science/hal-02546796
Usmani, K. K. (2021). Islamic Finance International Conference. Islamic Finance International Conference.
Volk, S., & Pudelko, M. (2016). Challenges and Opportunities for Islamic Retail Banking in the European Context: Lessons to be Learnt from a British-German Comparison. In Islamic Finance (pp. 157–173). Springer International Publishing. https://doi.org/10.1007/978-3-319-30918-7_10
Wilmot, A. (2017). Patronage Prospects of Islamic Banking and Finance in Ghana [Ashesi University College]. https://air.ashesi.edu.gh/server/api/core/bitstreams/e26c0abe-26f5-43fb-be87-ec1f9ec32410/content
Zouari, G., & Abdelhedi, M. (2021). Customer satisfaction in the digital era: evidence from Islamic banking. Journal of Innovation and Entrepreneurship, 10(1). https://doi.org/10.1186/s13731-021-00151-x
DOI: https://doi.org/10.24815/jaroe.v7i3.37011
Article Metrics
Abstract view : 0 timesPDF - 0 times PDF - 0 times
Refbacks
- There are currently no refbacks.
Published by:
Department of Accounting
Faculty of Economics and Business
Universitas Syiah Kuala
Kopelma Darussalam, Banda Aceh, Indonesia - 23111
E-ISSN: 2621-1041
Journal of Accounting Research, Organization and Economics by the Department of Accounting, Faculty of Economics and Business, Universitas Syiah Kuala is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
Based on a work at http://www.jurnal.usk.ac.id/JAROE/index.