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Section III: Opportunities nearby IFB system in Ethiopia
Table 4.2.1 IFB used for mainstreaming unbanked community
IFB used for mainstreaming unbanked community (N=79) Frequency Percent Mean SD
Strongly disagree 7 8.9 3.48 1.309
Disagree 14 17.7
Neutral 14 17.7
Agree 22 27.8
Strongly agree 22 27.8
TOTAL 79 100.0
Source: Own Survey, 2019
IFB used for mainstreaming unbanked community
Above table 4.2.1 shows statement to understand the position of respondents on the statement whether IFB has the potentials for mainstreaming the large number of unbanked Muslim community in Ethiopia. The results revealed that 9% (N=79) and 18% of the respondents strongly disagree and disagreed respectively with the statement.
On the other side 55% respondents agreed & considerable number of respondents (18%) did not provide their position on the issue. The average of the sample which is 3.48(SD=1.309) this implies most of respondents agreed on this statement. According to Nuruddeen Abba Abdullahi(2016) the Islamic banking has the potentials for mainstreaming the large number of unbanked Muslim community in Nigeria as they may be attracted to this type of specialized banking system and get bankable.
Even non-Muslims may be attracted by the business nature of the Islamic banking activities which provide investment resources rather than fixed interest facilities to customers. Islamic banking is interest (riba) free and trade oriented banking system, and it is based on profit and loss sharing mechanism. The Islamic banking system also has the potential to provide greater access of financial services to all segments of society. Accordingly, Islamic banks would meet the differential demands of low income communities and provide support to entrepreneurial activities. Therefore, it can promote greater financial inclusion in line with the current goal of the Central Bank of Nigeria. More significantly, mainstreaming the unbanked or the unnerved communities into the economic mainstream through the financial intermediation process would contribute towards poverty alleviation, job creation and more equitable economic growth
Table 4.2.2 High demand in services of IFB
high demand in services of IFB (N=79) Frequency Percent
Mean
SD
Strongly disagree 9 11.4 3.27 1.251
Disagree 12 15.2
Neutral 21 26.6
Agree 22 27.8
Strongly agree 15 19.0
TOTAL 79 100.0
Source: Own Survey, 2019
There is a high demand in services of IFB
Above table 4.2.2 show the respondents were also asked they supposed a high demand in services of IFB by the Ethiopian society. The results exposed that at least 46% (N=79) agree with the statement. Nonetheless, a considerable proportion of 27% did not give their opinion on the issue. Taking into consideration the number of respondents perceptions, there was a potential demand for the IFB services in Ethiopia because of interest exclusion in their religion.
Table 4.2.3 Positive effects from global financial trends on IFB
Positive effects from global financial trends on IFB Frequency Percent Mean SD
Strongly disagree 13 16.5 3.27 1.421
Disagree 12 15.2
Neutral 15 19.0
Agree 19 24.1
Strongly agree 20 25.3
TOTAL 79 100.0
Source: Own Survey, 2019
Supportive Global financial trends on IFB
A declaration to know the situation of respondents on the table 4.2.3 statement whether positive global financial trends would affect IFB in Ethiopia. These Global trends include for example technological advancements, economic growth in Ethiopia and in IFB expansion. The results exposed that 16.5% (N=79) and 15% of the respondents strongly disagree and disagreed respectively with the statement. On the other side a substantial number of respondents (59%) are agree & 19% did not provide their position on the issue. The average of the sample which is 3.27(SD=1.421) also shows that the trend of the sample is geared towards disagreeing with the statement.
Table 4.2.4 IFB leads to business expansion and investment
IFB lead to business growth and investment (N=79) Frequency Percent Mean SD
Strongly disagree 10 12.7 3.34 1.376
Disagree 14 17.7
Neutral 15 19.0
Agree 19 24.1
Strongly agree 21 26.6
TOTAL 79 100.0
Source: Own Survey, 2019
IFB leads to business expansion and investment
Above Table 4.2.4 shows respondents thought that IFB favored the expansion of business and investments, the majority of respondents 24% and 27% agreed and strongly agreed respectively. The average of the sample which stood at 3.34 (SD=1.376) itself shows that there is a tendency to agreeing with the statement by respondents we conclude that IFB has opportunity to expand business and investments the Ethiopian unbanked community.
Table 4.2.5 Interest free banking system is flexible and easy to adopt
IFB is flexible and easy to adopt (N=79) Frequency Percent Mean SD
Strongly disagree 10 12.7 2.67 1.152
Disagree 28 35.4
Neutral 30 38.0
Agree 5 6.3
Strongly agree 6 7.6
TOTAL 79 100.0
Source: Own Survey, 2019
Interest free banking system is flexible and unproblematic to adopt
Above table 4.2.3 on the views of respondents concerning the implementation of IFB system in the commercial banks of Ethiopia. It was indicate that 6.3% (N=79) and 7% agreed, strongly agree with the statement that IFB was flexible and easy to adopt, despite 38% holding their opinions. The average of 2.67 (SD=1.152) also shows a tendency of the sample towards neutral with the statement.
Table 4.2.6 IFB is not for Muslims only
IFB is not for Muslims only (N=79) Frequency Percent Mean SD
Strongly disagree 24 30.4 2.76 1.478
Disagree 12 15.2
Neutral 15 19.0
Agree 15 19.0
Strongly agree 13 16.5
TOTAL 79 100.0
Source: Own Survey, 2019
Interest free scheme is not for Muslims only
On the above table 4.2.6 to confine the views of the respondents on whether they thought that the interest free banking system was not for Muslims only. It was indicated that 46% (N=79) agree not only for Muslims and 30% disagree IFB system is only for Muslims. This implies that more than 46% of the respondents disagreed with the statement. Furthermore, the mean of the sample also indicated a tendency to not agreeing with the statement that IFB was for Muslims only. As a matter of fact, this adds to the potentials of IFB as this service can benefit both Muslims and non-Muslim customers especially in a country like Ethiopia where Muslims and Christians live together in peace and harmony we concluded that IFB system not only for Muslims.
