Factors Influencing the Adoption of Islamic Banking in Afghanistan

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Published Mar 12, 2025
https://doi.org/10.70436/nussj.v2i01.28
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Vol. 2 No. 01 (2025): January-March

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Naqeeb Ullah Atal
Department of Business Administration, Faculty of Economics, Nangarhar University, Jalalabad Afghanistan.
Abdul Rahman Dard
Department of Business Administration, Faculty of Economics, Kabul University, Kabul, Afghanistan
Sayed Kifayatullah Fazlly
Department of National Economics, Faculty of Economics, Nangarhar University, Jalalabad Afghanistan

Abstract

Islamic banking is a banking system that is established on the doctrines of Islamic law, in which Islamic banks are forbidden to engage in interest or Riba. The banking sector of Afghanistan incorporates both conventional and Islamic banks that offer various types of products for the purpose of catering to the varied needs of Afghan citizens and businesses alike. Bank-e-Millie Afghan was the first bank that introduced Islamic banking in Afghanistan by launching an Islamic banking window in 2008 to meet the varied and distinct financial needs of such Afghan citizens who were hesitant and reluctant to patronize interest-based banking products. The main purpose of this study is to investigate those factors that affect the intention to adopt Islamic banking in Afghanistan. The study used primary data that was gathered through a self-administered questionnaire from 384 respondents selected through a non-probability convenience sampling technique in Kabul and Jalalabad cities of Afghanistan, and the data was analyzed using the partial least squares technique. The findings of the study show that attitude, social influence, awareness, Islamicity of products, trust, and accessibility are significant determinants that affect the intention to patronize Islamic banking in Afghanistan. Awareness, however, was found to be the most instrumental of all the factors effecting the intention to patronize Islamic banking. As the results of this study provide insights into those factors that can assist in promoting Islamic banking in Afghanistan, it will greatly help managers and policymakers of Islamic banks in developing such strategies that can be executed for attracting a large number of customers to utilize Islamic banking.

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This work is licensed under a Creative Commons Attribution 4.0 International License.

How to Cite
Atal, N. U., Dard, A. R., & Fazlly, S. K. (2025). Factors Influencing the Adoption of Islamic Banking in Afghanistan. Nangarhar University Social Science Journal, 2(01), 35–47. https://doi.org/10.70436/nussj.v2i01.28

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