Factors Influencing Adoption of Shariah Complaint Products by Commercial Banks in Kenya

Abstract

Banking industry is becoming more competitive these days. As a result of this Commercial Banks in Kenya have to develop relevant products to meet the needs of the clients who are still not served by the Commercial Banks that offer Shariah compliant products and other Commercial Banks that do not offer Shariah Compliant products. Therefore they have to provide the best avenues through which the untapped market may be reached. The fact that most Commercial Banks in Kenya survive in the market with very few products and almost with the same features may suggest a problem in product development. The project entailed the concept of new product development, new product development information involved and being too busy to have time to fill the questionnaires due to heavy workloads at their work place. Based on the findings, the researcher would wish to recommend that banks should minimize their dependency on the use of consultants in new product development and a legislative framework should be put in place to enhance the regulation of the industry. This means that both Central Bank of Kenya as well as Banking Act should be amended to incorporate the Shariah products.