| dc.description.abstract | Previous research shows that Islamic banking adoption is necessary for the growth of the country’s economy; thus, Uganda has enacted laws to provide for the effective adoption and expansion of Islamic banking in the country. However, despite the potential of Islamic banking and the initiatives taken to enhance its adoption, there are still low levels of adoption with only one bank, Salaam Bank, licensed to carry out Islamic banking in the country. This study aimed to establish the opportunities, challenges, and strategies of Islamic banking adoption in Uganda. To achieve these objectives, the study undertook a cross-sectional survey research design and collected data from 98 bank staff who are key decision-makers in Kampala District. The research study revealed that there are a number of opportunities that Islamic banking can bring to the banking industry in Uganda and the economy at large: offering new banking products, which include interest-free banking services, promoting investments as the establishment of full-fledged Islamic banks motivates the society for saving and investment, proving a flexible financial system for the banks, and a good system to manage the risk well among the banks. The study found the perception of Islamic banking to be only for the Islamic community, Islamic banks not investing in industries with products and services involved in alcohol, pork, and gambling, and a lack of supportive and linking institutions such as Shar’iah boards and consultancies for the successful practice of Islamic banking and finance to be among the challenges. And based on the strategies out in this study, the study recommends that the Bank of Uganda should develop the supervisory framework that supports the Islamic banking operations in commercial banks; commercial banks that adopt Islamic banking should embark on advertisement so that customers can understand the products offered; and banks should train their employees to understand Islamic banking as well as align Islamic banking products policy to the overall strategy of the bank since the principles and working procedures of Islamic banks are completely new and different from those of conventional banks. | en_US |
