International Journal on Leadership

Dakito Alemu Kesto ¹, Abdulkadir Wolela ²

Affiliations
1 Head, Accounting & Finance Program Unit, School of Commerce, CoBE, Addis Ababa University, NG
2 Addis Ababa University, NG

Abstract

As part of IFBs fast global growth, leaders in Ethiopia are responsible for remaining competent to run shariah-compliant products. In this regard, the research aimed at the assessment of leadership gaps and challenges in the implementation of IFB in Ethiopia. An exploratory research design was applied, with a mixed research approach. Sample units of 75 managers were conveniently drawn, and the content of the responses and documents was thoroughly analysed quantitatively and qualitatively. The findings show perception, knowledge, legal, and project management gaps and challenges: attention given by leaders to IFB was found to be minimal; leaders and employees lack IFB personality and appearance, which happens in some cases due to fear of the unknown tailored to the IFB. Sustainable training and development programmes were not planned properly. There is a lack of adoption of appropriate technology. The legal framework of IFB is viewed through the lens of a typical conventional banking context. Leadership, along with the hierarchy, should cultivate personalities that favour the success of IFB. Perception should be surveyed to rectify and leaders should be involved in IFB decision making to create an IFB-friendly atmosphere that reflects its values. It requires crafting rigorous and diverse training programmes and public awareness. A clear IFB institutional structure with appropriate technology adoption should be established. NBE should look for ways to adopt internationally accepted IFB standards, reinforce, and revisit the current NBE directives and legal framework.

Keywords

Interest-Free Banking, Financing, Leadership, Shariah, Perception, Knowledge Gap, Legal Framework, Project Management

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