| Abstract: |
Over the past decades, Islamic banking has emerged as a viable alternative to
conventional banking, gaining recognition in both Muslim-majority and
non-Muslim countries. continues to face persistent challenges including
liquidity pressures, rising non-performing loans, fiscal instability and
regulatory concerns that constrain credit expansion, weaken investor
confidence and impede sectoral growth. These systemic weaknesses have prompted
policymakers and financial institutions to consider Islamic finance as a
complementary model to strengthen the country's financial architecture. This
study therefore explores the potential adoption of Islamic banking in Ghana
and identifies its opportunities, challenges and relevant policy
considerations. A systematic literature review was undertaken using a content
analysis approach. Out of seventy-five (75) initial publications, thirty (30)
were selected based on methodological rigor and thematic relevance. Findings
indicate that Islamic banking could enhance financial inclusion, provide
alternative financing mechanisms, support economic growth, attract foreign
direct investment, promote infrastructure development and contribute to a more
diversified financial market. However, barriers such as limited public
awareness, regulatory gaps, misconceptions about Islamic financial principles,
competition from conventional banks and inadequate professional expertise may
hinder its successful adoption. The study also recommends that, if
implemented, Islamic banking should be strategically aligned with Ghana's
macroeconomic and fiscal objectives. Specifically, it should be leveraged to
finance large-scale infrastructure projects including roads, industrial
facilities, agricultural ventures, housing and other capital-intensive
initiatives, thereby complementing fiscal policy and supporting long term
national development. |