BARRIERS AND PATHWAYS FOR ENHANCING ISLAMIC BANKING ADOPTION IN AFGHANISTAN: A QUALITATIVE STUDY

<p>This study, explores the critical factors affecting the growth of Islamic banking in Afghanistan and the purpose is to explore the barriers and potential pathways for its enhanced adoption. With a qualitative research methodology, data is collected from 10 in-depth interviews with Islamic banking professionals and twenty-five survey responses<span> </span>from<span> </span>consumers.<span> </span>The<span> </span>analysis,<span> </span>guided<span> </span>by<span> </span>thematic<span> </span>coding<span> </span>and<span> </span>supported<span> </span>by NVivo, focused on identifying the barriers to and the enablers of Islamic finance adoption. The findings show that the key obstacles includes Operational and Product Limitations, Lack of Awareness and Misconception, Regulatory and Legal Challenges, Sharia-Compliance and Governance Issues, and Economic and Political Instability. Conversely, the participants also identified opportunities that can lead to improvement in the adoption and enhanced implementation of the Islamic Banking<span> </span>in Afghanistan, this includes but not limited to, Education and awareness strategies, Innovation and product development or tailoring the products to the current market need, Strengthening regulation and oversight through a harmonized board, Digitalization and operational efficiency and Institutional capacity building. This study offers invaluable contribution to Afghanistan’s financial sector and specifically to the Islamic Banking sector, this also includes actionable recommendations or strategies of enhanced adoption that aligns with the religious and ethical values of Afghans. Adoption of these strategies will lead to greater financial inclusion and a sustainable banking sector that will benefit government and<span> </span>consumers.</p>