| dc.description.abstract | Islamic Banking has become ever popular in the last three decades, not only in Arab and
Islamic world but also in other parts of the World. However, despite over four decades of
experience of Islamic banking and finance, the industry has its critics, both Muslim and
non-Muslims. Islamic finance products and services are often accused of mimicking
those of the conventional financial system, while some criticisms consider the Islamic
financial system as window dressing. Thus, this study sought to examine the role of
Islamic banking on economic growth in Kenya. The study adopted a quantitative research
design. The population of interest comprised of two fully-fledged Islamic banks in Kenya
and four other banks that offer Islamic banking services in Kenya. The study utilized
secondary data from financial statements of the Islamic for a period of six years from
2008-2014. The data collected was analyzed using the Karl Pearson correlation and
multiple linear regression using the statistical package for social studies. The study
findings established that the level total savings had a positive relationship with economic
growth while total advances have a negative relationship with economic growth. The
study conclude that an increase in savings in Islamic banks stirs economic growth while a
decrease in lending inversely affects economic growth while increase in lending by
Islamic banks stirs economic growth. The study recommended that Islamic banks should
develop effective policies on deposit mobilization as this would increase their total
deposit hence more funds which they can advance inform of credit. | en_US |
