A survey of customer satisfaction and preferences towards islamic banking. a case of First Community Bank in Kenya
Islamic banking refers to a financial system which is consistent with principles of Islamic law (or 'Shariah') and guided by Islamic economics. In particular, Islamic law prohibits 'riba' or usury, (the collection and payment of interest). In recent years, a number of Islamic banks have been created to cater to the growing demand, driven by globalization and the vast wealth of the Muslim society. Many international conventional banks have started to operate in accordance with the Islamic Shariah principles to offer interest-free financial services in various countries including Kenya. The main objective of this study was to investigate the degree of customer satisfaction and preferences towards Islamic banking. The study looked at the factors that influence customers when choosing to bank with both an Islamic bank as well as a conventional bank, looking at the factors that determine the degree of customer satisfaction of various aspects of an Islamic bank and looking at the level of awareness of activities and facilities offered by an Islamic bank. The researcher reviewed previous studies with a view to establish academic gaps which the present study sought to bridge and the areas to be investigated. This study employed quantitative research as the main approach to guide the study. Focus group discussion guide was used to gather information from the bank branch managers on products and services offered by the bank. The target population included all customers of retail Islamic banks in Kenya. Questionnaires were administered to a sample of 200 randomly selected customers who visited First Community Bank during the last week of March 2010. The analysis of their responses revealed a certain degree of satisfaction of many of the Islamic banks facilities and products. The respondents expressed their dissatisfaction with some of the Islamic banks services. Although the respondents indicated that they are aware of a number of specific Islamic financial products like Murabaha, Musharaka and Mudaraba, they show that they do not deal with them.