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Determinants of Viability of Islamic Banking Products: A Case Study of Jaiz Bank Plc

Author

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  • Malanta S. Abdullahi

    (Economics Department, Yobe State University Damaturu, Nigeria)

  • Adamu Kuku Usman

    (Economics Department, Yobe State University Damaturu, Nigeria)

  • Nuraddeen M. Lawal

    (Economics Department, Yobe State University Damaturu, Nigeria)

Abstract

This paper investigates the long-term prospects of Islamic banking products in Nigeria amidst the rising popularity/acceptability of non-interest banking, especially the Islamic banking system. The rationale is to examine how the products of Islamic Banks contribute to the banks’ level of profitability and to also find out what factors affect the viability of Islamic banking products. Jaiz Bank Plc being the first official Islamic bank to be introduced into the Nigerian banking sphere is considered as a case study. The range of products/services offered by the bank are investigated in detail as well as their viability, keeping in mind the socio-economic and demographic factors prevailing in the environment. Data were sourced primarily with the help of a structured questionnaire. Discrete choice models were used as the econometrics tools of data analysis and the impact of seven variables was assessed on the viability of Islamic banking products. Also, Heteroskedasticity, Multicollinearity and F. tests were all conducted to ascertain the validity of the analysis. Six independent variables were found to be statistically significant at 1% levels and conform to a priori expectations. While the remaining variable even though it conformed to a priori expectations; was not found to be statistically significant. The research discovered that Islamic banking products are viable enough to add to the bottom line/profitability of Islamic financial institutions.

Suggested Citation

  • Malanta S. Abdullahi & Adamu Kuku Usman & Nuraddeen M. Lawal, 2021. "Determinants of Viability of Islamic Banking Products: A Case Study of Jaiz Bank Plc," International Journal of Research and Scientific Innovation, International Journal of Research and Scientific Innovation (IJRSI), vol. 8(10), pages 58-67, October.
    • Handle: RePEc:bjc:journl:v:8:y:2022:i:10:p:58-67
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    References listed on IDEAS

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    1. Sehrish Rustam & Saiqa Bibi & Khalid Zaman & Adeela Rustam & Zahid-ul-Haq, 2011. "Perceptions of Corporate Customers Towards Islamic Banking Products and Services in Pakistan," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 14(41), pages 107-123, September.
    2. Paul Asquith & Robert Gertner & David Scharfstein, 1994. "Anatomy of Financial Distress: An Examination of Junk-Bond Issuers," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 109(3), pages 625-658.
    3. Mohammed Obaidullah, 2005. "The Islamic Financial Services الخدمات المالية الإسلامية," Books published by the Islamic Economics Institute, KAAU., King Abdulaziz University, Islamic Economics Institute., edition 1, number 40, July.
    4. Yvonne Saini & Geoff Bick, Loonat Abdulla, 2011. "Consumer awareness and usage of islamic banking products in South Africa," South African Journal of Economic and Management Sciences, University of Pretoria, Faculty of Economic and Management Sciences, vol. 14(3), pages 298-313, September.
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