Islamic banking in Uganda: Prospective benefits, prospective challenges and lessons learned from the Malaysian experience

Islamic banking (IB) is gaining popularity in Uganda, fueled by its feasibility, legal framework, and challenges. In this research, the determinants of Ugandans' intention to use IB are investigated: religiosity, attitude, and subjective norms. This study gives an account of the regulatory framework of Islamic finance in Malaysia by exploring its evolutionary history, which will be of use to IB in Uganda. It explores the potential solutions toward achieving Shariah compliance, increasing consumer satisfaction, and enhancing financial literacy. This study compares IB in East Africa, briefly focusing on Tanzania, Rwanda, Kenya, and Uganda, highlighting the region's regulatory dynamics and prospects for growth. The qualitative inquiry revealed that adopting IB in Uganda will increase financial service alternatives and economic inclusion. It found that numerous challenges await its adoption, like limited Shariah compliance and minimal Shariah training for staff and corruption, etc. On the lighter side for Uganda, it can emulate offering tax incentives embracing service quality, and customer satisfaction, among others, from the Malaysian experience. On a positive note, Uganda can learn from Malaysia by adopting Malaysian practices such as providing tax incentives and customer satisfaction, and service quality. The focus was on the past lessons from the Malaysian experience and how they could be used to advance IB, particularly in Uganda. The recommended solutions include service delivery, SME financing, tax relief, and public education campaigns. The lessons and challenges learned in Malaysia to enhance IB and finance in Uganda are presented in the report.