ACCESSING THE POTENTIALS OF ISLAMIC BANKING IN GHANA

Abstract

The purpose of this study was to assess the potentials of Islamic banking in Ghana. Available literature shows that there are efforts to review the Banking Act of Ghana to incorporate the concept and governance of Islamic Banking and Finance aimed at introducing Islamic Banking in Ghana. This move to review the Banking Laws in Ghana for introduction of Islamic Banking; coupled with the differences that exist between Conventional Banking and Islamic Banking according to Joan (2007), formed the bases for the assessment of the potentials of Islamic Banking in the Banking system of Ghana. Islamic Finance dwells on the principles provided by Shariah and other Islamic Jurisprudence. Admittedly, these principles deviate from the laws, practices and principles of conventional banking in Ghana (Joan, 2007). The objectives of the study are: to identify the potential benefits of Islamic banking on economic activities of clientele and the economy of Ghana, to ascertain factors that motivate customers' choice of conventional banking, and as well as to ascertain possible constraints that can hamper the introduction of Islamic banking in Ghana. The study employed descriptive cross-sectional research design using semi-structured questionnaires and interview guide for data collection. A total sample size of 100 was targeted for questionnaire enumeration and 15 interviews with selected banks in the Tamale Metropolis. Data was analysed using SPSS (version 16.0). Fifteen interviews were also conducted for some Islamic scholars and Management staff of the bank of Ghana and the selected commercial banks. The findings of the study indicate that though, they will be some challenges, the introduction of Islamic banking in Ghana will largely be successful. The study, however, concluded among other things that there will be the need for further research in other regions of the country to determine the full potentials of Islamic banking and also changes in the legislature before the introduction.