FACTORS AFFECTING THE ADOPTION OF INTEREST-FREE BANKING SERVICES (AWASH BANK ETHIOPIA)

Abstract

The global financial sector is becoming more aware of the rise of interest-free banking services based on Shariah, or Islamic law. The study is interested in examining the factors that influence the adoption of interest-free banking services, using Awash Bank as an example in Ethiopia. Even while previous studies have looked at the elements that influence the acceptance of Islamic banking in different countries, there is a noticeable lack of information about the particular circumstances surrounding Awash Bank in Ethiopia. Studying the factors that encourage and hinder the use of Awash Bank's interest-free banking services has received little attention. Descriptive and explanatory research designs are combined in this study's mixed-methods methodology. To guarantee the representativeness of the sample, which included 800 bank employees and 24 bank employees, a probability sampling technique was applied. Questionnaires were used to collect data, and statistical techniques were then used for analysis. The study identifies the main determinants of interest-free banking service uptake, including customer engagement, religious beliefs, service complexity, and awareness. Importantly, the findings show clear connections between these variables and the uptake of interest-free banking services, which has useful ramifications for Awash Bank as they modify their products to better suit the requirements and tastes of their target market. Understanding Ethiopia's unique sociocultural, economic, and legal environment will help Awash Bank increase the uptake and sustainability of its interest-free banking offerings.