Islamic banking services and community welfare improvement in Hargeisa Somaliland
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Date
2016
Authors
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Journal ISSN
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Publisher
Kampala International University(KIU)
Abstract
This study was aimed at establishing the relationship between Islamic banking
services and welfare improvement to the community in Hargeisa Somaliland,
three specific objectives guided this study and these were To establish the
relationship between Islamic banking services and improvement of quality of life
among community members in Hargeisa Somaliland.To examine the relationship
between Islamic banking services and poverty alleviation among community
members in Hargeisa Somaliland. To determine the relationship between Islamic
banking services and improvement of infrastructure in Hargeisa Somaliland.Using
a descriptive correlational design, the researcher administered a questionnaire to
114 respondents; Slovene's formula· was used to arrive at sample size. Data
analysis using means revealed that; the Islamic banking services in Hargeisa
Somaliland was rated satisfactory (mean=2.86), confirming that the Islamic
banking services has provided effective financial services through not charging
interest on loan services, having favourable deposits and withdraw services and
effective financing and investment services to the community members in
Hargeisa Somaliland, whereas the community welfare improvement in Hargeisa
Somaliland was found to be satisfactory (overall mean=3.01), hence confirming
that the Islamic banking services system has contributed to the community
welfare through improving on the quality of life, poverty alleviation and
infrastructural improvement in Hargeisa Somaliland. The researcher concluded
that: effective Islamic banking services highly contribute to the improvement in
quality of life among community members in Hargeisa Somaliland, unfavourable
Islamic banking services increase on the poverty levels and unfavourable Islamic
banking services increase it; and Islamic banking services significantly affect the
community welfare improvement in Hargeisa Somaliland. The researcher
recommended that these Islamic banks to consider past payment history of client
as a means of avoiding occurrence of risk, these Islamic banks should make sure
that during loan payment clients can't take more money on the same loan
(refinance) but a client can take a new loan, these selected Banks in Hargeisa
Somaliland should make sure that they introduce electronic accounts which can
used by clients for payment of the variety of Shari'a compliant finance services,
the Islamic banks should also provide education services to even the
disadvantaged populations in Hargeisa Somaliland as a way of improving the
community welfare, and they should always support research and product design
experiments to encourage poor people to adopt and actively use digital financial
services.
Description
Keywords
Islamic Banking Services, Community Welfare, Somalia