INFLUENCE OF LOAN ACCESSIBILITY ON ADOPTION OF ISLAMIC BANKING IN CONVENTIONAL COMMERCIAL BANKS IN KENYA
Abstract
The study looked at the influence of loan accessibility on adoption of Islamic banking in conventional commercial banks in Kenya. The study looked at commercial banks in the Mombasa CBD that offer Islamic financial services. Transaction Costs Economics Theory was used in the study. The study used descriptive survey research. The study used the census method, which meant that all of the 62 people who took part were used. Close-ended questions were used in the study to keep the respondents' answers focused on a single topic for easier analysis. The researcher visited 31 traditional banks that offer Islamic banking services and asked for permission to do the research privately for a scholarly reason. The information was put together and changed to make sure it was correct, complete, and consistent. The information obtained was organized and rearranged to ensure accuracy, confluence, and consistency in the final product. The findings showed that before giving out a loan to a consumer, the bank looks at their bank statement to determine their financial capability. Before granting a loan, the bank considers the investment's viability. Immediately after a loan is granted, a bank's relationship officers are tasked with keeping track of the borrower and offering investment recommendations. When it came to handling non-performing loans, the bank scored well on the test. With regard to other banks, this bank had the best lending regulations in place. The study found that there is a significant relationship between loan accessibility and adoption of Islamic banking by conventional. Excessive competition in the banking sector may be reduced by implementing measures that decrease the lending rates of conventional commercial banks. The study suggested that conventional commercial banks providing Islamic banking services should design lending policies that enable them to build client connections while also leveraging lending policies as a competitive edge over their rivals in the market.
Key Words: Loan Availability, Islamic Banking, Commercial Banks
CITATION: Sameer, M., Egondi, P., & Muli, S. (2022). Influence of loan accessibility on adoption of Islamic banking in conventional commercial banks in Kenya. The Strategic Journal of Business & Change Management, 9 (3), 368 -377.
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DOI: http://dx.doi.org/10.61426/sjbcm.v9i3.2376
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