A survey of the challenges of shariah compliant banking in Kenya
Banks face many challenges especially when introducing new concepts and products in to the market so as to achieve a competitive advantage over others. This study is a survey of the challenges ofShariah Compliant Banking in Kenya. The objective of the study was to identify the Shariah Compliant Banking Products offered by banks in Kenya and the challenges faced by these banks in offering Shariah Compliant Banking Products. Data was collected using a semi-structured questionnaire which was dropped and later picked. Census survey was done and one senior employee from every bank responded to the questionnaire. The data was then analyzed and presented using percentages, frequency distributions, tables and charts to get the objectives of the study. The study revealed that the banks mainly offered current and savings accounts for deposit mobilization and majority of the banks did not offer Shariah compliant investments. Very few banks are offering financial intermediation currently while the rest of the banks are in the process of introducing. On the side of challenges faced by these banks, developing money markets, regulation and supervision of Islamic finance, competition, legislation and tax regulations were the most challenging respectively. Data collection, government borrowing and financing were the least challenges. This was because most of the banks did not provide Shariah compliant financial intermediation and so were not experiencing these challenges where as those banks which provided financial intermediations were still at an early stage. This shows that Shariah compliant financial intermediation is at an early stage in Kenya.