Phobia of the Introduction of Ethical Financing through Islamic Banking System in Nigeria: Respondents’ Perceptions on Business and Economic Suitability

Abstract

This research work aimed at studying the business and economic suitability of the introduction of alternative ethical finance through Islamic banking system in Nigeria as being consistent with modern economies. As Islamic banking system is working in a number of countries, then, Nigeria shouldn’t be a battle ground between Muslims and Christians mostly because it carries the toga of Islam thereby ignoring the beneficial social goals inherent in the Islamic alternative modes of ethical financing and investments. The issue of interest is a philosophical question which has to do with the core concept of ‘is money a commodity that can be traded on its own or not? The central issue is that the contemporary financial system is exploitative, unjust,  discriminating, unstable and crisis generating. The sampling method adopted for the study was stratified random sampling technique. The study was conducted with 480 respondents in Abuja and responses elicited from questionnaires administered. The instrument used for data collection was questionnaire and data analysis made used of simple percentage and ANOVA was adopted for hypothesis testing. Data obtained was analyzed with inferential statistical technique. ANOVA was employed to test each hypothesis at 99 per cent confidence level. Results were analyzed through descriptive statistics  and hypotheses tested using ANOVA at 0.01 level of significance. Thus, this paper believes that the Islamic banking provides financial solutions that are not only concerned with the growth of money but the ethical means by which money can be used to generate wealth. The paper also believes that with the establishment of Islamic banking system in Nigeria therefore will relatively remedy the problems of interest banking system that are making unemployment and redundancy to becoming order of the day. This study suggested that the introduction of Islamic banking system in Nigeria might promote a balance between the social and economic aspects of human society, the self and social interests and between the individual, family, society and the State. It can effectively address issues like income distribution and poverty alleviation, which capitalism has not been able to address and at the global level, it will rid the basis of instability, so making the world a happier place with harmony among followers of various religions.