IDEAS home Printed from https://ideas.repec.org/p/zbw/kbawps/15.html
   My bibliography  Save this paper

Islamic banking and economic infrastructure development: Kenya's prospects

Author

Listed:
  • Mohammed, Wahida

Abstract

The high profile of infrastructure and access to related services in the communiqués of the World Bank (WB) and the International Monetary Fund (IMF) at their annual meetings of 2014 underscores the importance of infrastructure development worldwide. And nowhere is the lack of adequate infrastructure more crucial and potentially transformational than in Sub-Saharan Africa. A gap of around US$ 31 billion1 exists per year that must be bridged if Africa's infrastructure needs are to be met. Taking into account the resources currently available for infrastructure development to African governments the need for innovative project financing schemes becomes quite apparent. One area of possible innovation is the use of Islamic finance or shariacompliant financing for infrastructure development. Research on this type of financing has been conducted predominantly in Islamic countries and in developed countries. The purpose of this paper therefore is to explore from a non-Islamic developing country's perspective the prospects of using Islamic finance for infrastructure development. It aims to identify the conditions necessary in terms of an analysis current practice, gauge the understanding of Kenyan stakeholders as well as identify possible barriers that may be impeding Islamic infrastructure financing in Kenya. Three case studies of infrastructure projects drawn from Africa that have utilised Islamic financing mechanisms are conducted in order to answer research question one. Two cycles of a Delphi study were also conducted where interviews and questionnaires are used to gather the views and opinions of an expert panel to answer question two and three. This paper presents an overview of both conventional and Islamic project financing in infrastructure development followed by the presentation and discussion of the research findings. Trends to watch and policy recommendation aimed at facilitating the implementation of Islamic project financing in Kenya infrastructure development are also discussed. It is expected that the results of this research will facilitate the harnessing of Islamic financial resources in the development of infrastructure projects not only in Kenya but in Sub Saharan Africa as well.

Suggested Citation

  • Mohammed, Wahida, 2015. "Islamic banking and economic infrastructure development: Kenya's prospects," KBA Centre for Research on Financial Markets and Policy Working Paper Series 15, Kenya Bankers Association (KBA).
    • Handle: RePEc:zbw:kbawps:15
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/249516/1/WPS-15.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Jasim Al‐Ajmi & Hameeda Abo Hussain & Nadhem Al‐Saleh, 2009. "Clients of conventional and Islamic banks in Bahrain," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 36(11), pages 1086-1112, September.
    2. Patel, Urjit R. & Bhattacharya, Saugata, 2010. "Infrastructure in India: The economics of transition from public to private provision," Journal of Comparative Economics, Elsevier, vol. 38(1), pages 52-70, March.
    3. Chen, Andrew H., 2002. "A new perspective on infrastructure financing in Asia," Pacific-Basin Finance Journal, Elsevier, vol. 10(3), pages 227-242, June.
    4. Torrisi, Gianpiero, 2009. "Public infrastructure: definition, classification and measurement issues," MPRA Paper 12990, University Library of Munich, Germany.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ram Sahi & Najib Khan, 2011. "Evolution of India’s Electricity Market Deregulation and Private Sector Investment in the Power Sector(withdrawn for review)," Carleton Economic Papers 11-08, Carleton University, Department of Economics.
    2. Antonio Estache & Caroline Philippe, 2012. "The Impact of Private Participation in Infrastructure in Developing Countries: Taking Stock of about 20 Years of Experience," Working Papers ECARES ECARES 2012-043, ULB -- Universite Libre de Bruxelles.
    3. Zhang, Yijia & Cheng, Lu, 2023. "The role of transport infrastructure in economic growth: Empirical evidence in the UK," Transport Policy, Elsevier, vol. 133(C), pages 223-233.
    4. Muhammad Y. Khan & Shahab Ud Din & Majid J. Khan & Anam Javeed, 2021. "Dynamics of selecting Islamic home financing," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(4), pages 5005-5016, October.
    5. Mitra, Arup & Sharma, Chandan & Véganzonès-Varoudakis, Marie-Ange, 2014. "Trade liberalization, technology transfer, and firms’ productive performance: The case of Indian manufacturing," Journal of Asian Economics, Elsevier, vol. 33(C), pages 1-15.
    6. Surbhi Gupta & Anil Kumar Sharma, 2022. "Evolution of infrastructure as an asset class: a systematic literature review and thematic analysis," Journal of Asset Management, Palgrave Macmillan, vol. 23(3), pages 173-200, May.
    7. Willem H. Buiter & Urjit R. Patel, 2010. "Fiscal Rules in India: Are They Effective?," NBER Working Papers 15934, National Bureau of Economic Research, Inc.
    8. Vu, Khuong & Hartley, Kris, 2022. "Effects of digital transformation on electricity sector growth and productivity: A study of thirteen industrialized economies," Utilities Policy, Elsevier, vol. 74(C).
    9. Idrovo Aguirre, Byron, 2012. "Inversión en infraestructura pública y crecimiento económico, evidencia para Chile [Public infrastructure, investment and economic growth in Chile]," MPRA Paper 39857, University Library of Munich, Germany.
    10. Roberto Cellini & Gianpiero Torrisi, 2013. "Regional Public Spending for Tourism in Italy: An Empirical Analysis," Tourism Economics, , vol. 19(6), pages 1361-1384, December.
    11. Shehriyar Khalil & Liaqat Ali, 2015. "Risk Management Practices in the Conventional Banks Working in Peshawar," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 5(2), pages 53-58, April.
    12. Abdullah Mesut UÇAR, 2020. "A Research on Consumer Behavior Towards Interestfree Financing with Special Reference to Planned Behavior Theory: An Empirical Analysis," Journal of Economic Policy Researches, Istanbul University, Faculty of Economics, vol. 7(1), pages 69-88, January.
    13. Richter, Sylvia & Heyde, Frank & Horsch, Andreas & Wünsche, Andreas, 2021. "Determinants of project bond prices – Insights into infrastructure and energy capital markets," Energy Economics, Elsevier, vol. 97(C).
    14. Ibrahim Idris & Samirah Ibrahim Jibril & Hadiza Tijjani Bello & Muhammad Usman Adekunle, 2020. "Public Infrastructure Provision in Bauchi Metropolis, Nigeria," Traektoriâ Nauki = Path of Science, Altezoro, s.r.o. & Dialog, vol. 6(9), pages 1001-1005, September.
    15. Broni, Mohammed Yaw, 2018. "Challenges in Establishing an Islamic Banking and Finance System: Evidence from Ghana," MPRA Paper 89136, University Library of Munich, Germany.
    16. Jiayuan Cai & Zilin Deng & Linna Li, 2024. "The spatial impact of high bridges on travel accessibility and economic integration in Guizhou, China: a scenario-based analysis," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-17, December.
    17. Matti Siemiatycki, 2011. "Urban Transportation Public–Private Partnerships: Drivers of Uneven Development?," Environment and Planning A, , vol. 43(7), pages 1707-1722, July.
    18. Manisha Jain, 2018. "The effect of distance on urban transformation in the Capital Region, India," International Planning Studies, Taylor & Francis Journals, vol. 23(1), pages 37-50, January.
    19. Ayesha Hamid & Omar Masood, 2011. "Selection criteria for Islamic home financing: a case study of Pakistan," Qualitative Research in Financial Markets, Emerald Group Publishing Limited, vol. 3(2), pages 117-130, June.
    20. Sedlmeir, Joachim & Hopf, Stefan & Neuburger, Rahild & Picot, Arnold, 2017. "Convergent Digital Infrastructures and the Role of (Net-)Neutrality," 28th European Regional ITS Conference, Passau 2017 169497, International Telecommunications Society (ITS).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:kbawps:15. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://www.kba.co.ke/about_research_center.php .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.