Introduction of Islamic Banking and Finance in Ghana: Opportunities and Challenges

Abstract

This paper presents a general review of opportunities and challenges of Islamic banking and finance (IBF) introduction in Ghana. It relies on existing literature, especially from Islamic banking and finance, and positional views of the authors. The paper identifies key factors in Ghana’s economy that present prospects for the introduction and adoption of IBF in Ghana by policy makers and consumers. These include opportunity for employment, democratic political system of governance, flexible industry regulatory framework, existing agrarian sectors, high demand for banking products, high interest rate, Muslim population, and quest for sound business practices. It also discusses the potential challenges that are likely to face full-fledge IBF products and institution in Ghana in terms of IBF governance, consumer behaviour and performance of IBF institution. Finally, the paper proposes strategies for overcoming the potential challenges for the effective introduction of IBF in Ghana. Managerially, this paper puts together a rich blend of objective appraisal of IBF from many perspectives and serves as an important source of information on IBF in Ghana for stakeholders, especially the Bank of Ghana, policy makers, and IBF practitioners. Theoretically, this paper provides valuable source of literature for academics and practitioners interested in IBF research and business in Ghana Banking Industry.