Factors Influencing Islamic Banking In Kenya

10073 Words 41 Pages
AN ASSESSMENT OF THE FACTORS INFLUENCING THE UPSURGE OF ISLAMIC BANKING SERVICES IN KENYA.

A Thesis Submitted to the University of Eastern Africa, Baraton, School of Business, Department of Management

In Partial Fulfillment of the Requirements for the Degree of Master of Business Administration (Finance)
Wilson Mauti Ogonda

June, 2015

APPROVAL
This thesis entitled “An Assessment of the Factors Influencing the Upsurge of Islamic Banking in Kenya” written and submitted by Wilson M. Ogonda, in partial fulfillment of the requirements for the degree of Master of Business Administration – Major in Finance is hereby accepted and approved: _______________________________ ______________________________
Mr. Richard Omondi
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This is according to an Islamic Finance Marketplace – Enterprise Innovation Deal Flow (2014).
Growth of Islamic Banking
The global Islamic finance industry reached approximately US$1.9 trillion in assets as at the end of first half of 2014. The industry’s assets have grown at sustained double digit compounded annual growth rate of 16.94% in the last five years (2009-2013). Islamic banking and sukuk sectors continue to dominate the industry, with respective 80% (US$1.53 trillion – estimated) and 15% (US$286.4 billion) shares in aggregate assets as at first half of 2014. This is according to Islamic Finance and The Real Economy
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L, Executive Director – International Shari’ah Research Academy for Islamic Finance (ISRA) (2013) Kuala Lumpur, Malaysia - It is believed that Islamic Finance began its modern history some 40 years ago. Since then, it has achieved impressive results and made inroads into conventional financial systems. During this period, Islamic finance has demonstrated its ability to compete with mainstream economic and financial systems. This was even more transparent during the recent financial crisis of 2007 – 2009 when Islamic finance showed a certain degree of resilience to the financial shocks and credit crunch. The financial landscape, in the wake of the most recent global financial crisis, is indeed in need of appropriate reforms. There is a general consensus that we need to return banking to its basic functions, i.e to provide financial services that add value to the real economy. This, in fact, represents the very essence of Islamic finance. The principles of the shari’ah which underpin Islamic finance help explain its resilience during the global

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