AN EMPIRICAL ANALYSIS ON THE OPERATIONAL CHALLLENGES OF INTEREST FREE BANKING WINDOW IN NIGERIA: A CASE STUDY OF KEYSTONE BANK LIMITED IN NASARAWA STATE

Abstract

The main objective of this study is to empirically analyze the operational challenges of Interest-Free Banking Window in Nigeria with particular reference to the Non-Interest Banking (NIB) of keystone Bank limited in Nasarawa State. To achieve this objective, a cross sectional data was generated yielding a sample of 150 respondents, consisting of 30 staff and 120 customers were sourced via structured questionnaires. The data was analyzed using chi-square and binary logit model. The research findings revealed that legal frame work, Manpower, Competition, Financial Literacy, Religion and Moral Hazard constitute significant constraints on the operation of the Interest-Free Window. Therefore, the study recommended for vigorous public enlightenment (sensitization) programme on Interest-Free Banking, intensive manpower training and development, promotional efforts, introduction of innovative services and products, progressive monitoring and supervision of business partners/ clients, co-operation with other interest-free institutions and relevant stakeholders, expansion of the scope of the operational guidelines of Non-interest Banking by the Central Bank of Nigeria and active government participation in Interest-Free Banking at all levels among others as strategies for overcoming these challenges and improving the performance of the Non-interest-Banking system not only in Nasarawa State but Nigeria in general.