| dc.description.abstract | Kenya’s Islamic finance business is rapidly developing, getting well incorporated and
mainstreamed into the worldwide financial architecture, nonetheless, not well comprehended by
the majority of Kenyans. Islamic banking provides for financing instruments where profits and
losses are equally shared by the bank and the customers in equitable proportion. They provide
better opportunities for the business to share the actual proceeds received by the investments to
the depositors. Islamic windows have become the stepping stones by providing opportunities to
build capacity at the minimal overheads while the conventional banks are re-structuring for
conversion. However, the Islamic windows are faced with growth challenges that need to be
addressed. This study looked at regulatory and Institutional frameworks; availability of Islamic
market and tradable financial instruments; competition from fully-fledged Islamic banks; and
socio-cultural factors and how they affect the growth of the Islamic windows. Descriptive and
Cross-section Survey Design was used for the study where questionnaire and interviews was the
instrument for data collection. A target population of 32respondentswasused comprising of (18)
bank management officials and (14) Sharia’h board members drawn from all the conventional
banks with Islamic windows in Nairobi. Descriptive statistics including arithmetic mean,
standard deviation, percentages and frequencies was used to analyze responses to the
questionnaires. Inferential statistics including multi-collinearity, regression, correlation analysis,
ANOVA model, and T-test will be used as significance test and specification tests. The results
were tabulated or presented in charts. The study showed that only regulatory framework was
significant in explaining the growth of Islamic windows. However the availability of Islamic
tradable instruments affected growth positively while competition from fully fledged bank and
socio-cultural factors affected growth negatively even though not significantly. The study
recommended for clear regulatory framework that will help conventional banks realize there
objectives of making profit as they embrace Islamic windows. There was a need to have
variation of products in the market so that customers’ expectations are met. Finally further
studies need be conducted to identify the other determinants of growth of Islamic windows. | en_US |
