Factors Influencing Adoption of Interest Free Banking Products and Services in Ethiopia (PDF)

Master's Thesis from the year 2020 in the subject Business economics - Banking, Stock Exchanges, Insurance, Accounting, , language: English, abstract: The main objective of this study is to identify the major factors influencing the adoption of Interest free banking products and services among customers in Bale Robe town. The research employs decomposed theory of planned behavior to investigate the influence of customer's behavior towards adoption of interest-free banking product and services by using customers attitude attribute social influence and perceived behavioral control. Both qualitative and quantitative research approach were applied in the study. The target populations were 13050 customers of four banks in Robe town and the total sample size were 388. A purposive sampling technique was applied. Primary and secondary data were used with five point liker scales to collect data from respondents. Both descriptive and inferential statistics analysis were employed to analyze the data.

Interest free banking is inseparable of Islamic economics which aimed at realization of a greater justice in human endeavor, which is achievable only with participation of all human institution inclusive of financial system. On the principle that prohibits interest and other unethical and non shariah compliant activities, Islamic banking set to achieve this gigantic objective. In addition, it strive on increasing all Halal aspect of business through provision of products and services base on shariah principle with implementation of legitimate profit and loss sharing, paying Zakah, prohibition of interest, monopoly and other forms of unethical trade and transaction such as dealing with pork, alcohol and gambling. Hence, Islamic banking method of financing and or products structure is based on the tract to redress the inherent injustice tied with interest based dealing.