Potential use of Islamic finance among Muslims in Port Elizabeth

The resurgence of Islam across the globe combined with the resilience that Islamic financial assets have shown against the onslaught of the current financial crisis, make Islamic finance an attractive alternative financial system. Over the past decade, the Islamic finance sector have shown double digit growth rates beyond the traditional areas of the Gulf Cooperation Council (GCC) regions of Asia as well as other parts of the Middle-East and North Africa (MENA) regions. Research suggests that the future of Islamic finance in Africa depends on business opportunities in South Africa, Kenya, Nigeria and Senegal. The South African government, in conjunction with the national finance authorities, have made their intention clear to position the country as the Islamic finance hub for the rest of the African continent. Despite various marketing campaigns over the past decade to convince the public that Islamic banking and finance is for everyone, non-Muslims generally view Islamic banking as being for Muslims alone. Scepticism towards Islamic finance has resulted in a mere 15 per cent of the estimated 1.5 million South African Muslims currently making use of the sector’s banking and retail instruments. This lack of interest is impacting negatively on the country’s aspirations to establish itself as the gateway of Islamic finance to the rest of Africa. Generally, people’s attitudes toward utilising Islamic finance are regarded as a key obstacle to the development of the Islamic banking and finance system in Muslim minority countries. A Kuwait Finance House research report (2012) highlighted a lack of awareness and knowledge of Islamic finance products and services as key factors stifling the growth of the Islamic finance sector in South Africa. In this context, it was deemed necessary to analyse how knowledge, awareness, expectations, beliefs, perceptions and ancillary external factors impact on potential users’ attitude and decision to adopt or reject Islamic finance.By means of adapting Fishbein’s (2000; 2008) Integrative Model of Behavioural Prediction, a universally-acceptable behavioural-change model, this research explains in a holistic manner how cognitive, affective and environmental measures impact on a Port Elizabethan Muslim’s attitude and eventual decision to accept (or reject) Islamic finance. This study has found that knowledge was the most important variable influencing attitude and intention to use (or reject) Islamic finance. Consequently, this thesis proposed that Islamic institutions should focus their efforts on promoting knowledge and awareness of their products among the South African Muslim and non- Muslim population. As the global Shari’ah finance industry continues its positive growth trajectory, it is imperative that Islamic finance stakeholders in South Africa ensure that they exploit the benefits derived from online learning platforms and assist, by means of cross-border collaborations, more students to have greater access to Islamic finance courses. Furthermore, universities and training institutions are encouraged to offer courses and qualifications in Islamic finance to close the talent gap that currently exist in this particular field of study