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Customer Adoption of Islamic Banking in Non-Islamic Countries: Empirical Evidence from Uganda
Subject area: Management and Commerce · Area of research: Banking
Abstract
Islamic banking has gained global recognition as an alternative financial system that adheres to Sharia principles, avoiding interest-based transactions. Despite its growing presence, adoption in non-Islamic countries remains relatively low. This study investigates the factors influencing customer adoption of Islamic banking services in Uganda, a predominantly non-Islamic country. The research employed a cross-sectional survey design, collecting data from 95 respondents predominantly in urban areas using structured questionnaires. The study explores levels of awareness, perceived benefits, socio-economic influences, and barriers to adoption of Islamic banking. Specifically, findings revealed that limited awareness, accessibility, and trust are key challenges hindering widespread acceptance. Based on these findings, the study recommends increased public education, regulatory support, and tailored financial products to enhance adoption.
Keywords
Customer Adoption, Islamic Banking, Non-Islamic Countries, Uganda
References
[1] Afuah, S. (2023). Islamic banking's global expansion and potential in Uganda.
[2] Burhanur, R. (2021). Islamic banking in India: Challenges and prospects.
[3] Ibrahim, A., Yusoff, W. S. W., & Jusoh, W. N. H. W. (2018). Conflicts facing Islamic banking in Malaysia: Dual banking system versus dual legal system. Journal of Islamic Finance, 7(1), 1–10.
[4] Lujja, S., Tumwine, S. K., & Mbaziira, C. (2015). Legal feasibility of implementing Islamic banking in Uganda. International Journal of Islamic and Middle Eastern Finance and Management, 8(2), 246–258. https://doi.org/10.1108/IMEFM-04-2014-0035
[5] Mutebile, E. T. (2017). Islamic banking, emerging markets, and Uganda’s economic progress. Bank of Uganda Occasional Paper Series.
[6] Raqeeb, M. (2020). Problems and prospects of Islamic banking: Road map ahead. International Journal of Research and Analytical Reviews, 7(2), 921–926.
How to cite this paper
@article{1708199,
author = {Niringiye Sam},
title = {Customer Adoption of Islamic Banking in Non-Islamic Countries: Empirical Evidence from Uganda},
journal = {Iconic Research And Engineering Journals},
year = {2025},
volume = {8},
number = {11},
pages = {22-30},
issn = {2456-8880},
url = {https://www.irejournals.com/formatedpaper/1708199.pdf},
abstract = {Islamic banking has gained global recognition as an alternative financial system that adheres to Sharia principles, avoiding interest-based transactions. Despite its growing presence, adoption in non-Islamic countries remains relatively low. This study investigates the factors influencing customer adoption of Islamic banking services in Uganda, a predominantly non-Islamic country. The research employed a cross-sectional survey design, collecting data from 95 respondents predominantly in urban areas using structured questionnaires. The study explores levels of awareness, perceived benefits, socio-economic influences, and barriers to adoption of Islamic banking. Specifically, findings revealed that limited awareness, accessibility, and trust are key challenges hindering widespread acceptance. Based on these findings, the study recommends increased public education, regulatory support, and tailored financial products to enhance adoption.},
keywords = {Customer Adoption, Islamic Banking, Non-Islamic Countries, Uganda},
month = {May},
}