Abstract:

This study investigates perceptions of Muslim and non-Muslim citizens with respect to Islamic banking in Tanzania. We also attempt to measure the awareness regarding Islamic banking products and services as well as the factors which influence citizens of Tanzania in choosing Islamic banking. We explore if there are any similarities and differences between Muslim and non-Muslim citizens. By using snow ball sampling technique, a sample of 660 citizens (50% Muslim and 50% non-Muslim) was surveyed. Chi-square test was used to test if there is any significant difference between perceptions of Muslim and non-Muslim toward Islamic banking in Tanzania. Our findings imply that there a significant difference between perceptions of Muslims and non-Muslims with respect to Islamic banking in Tanzania. Furthermore, with respect to level of awareness of Islamic banking our findings reveal that nearly two thirds of Muslim respondents are aware of Islamic banking whereas only one third of non-Muslim citizens are aware of Islamic banking. Respondents claim that they learn about Islamic banking products and services mostly through friends or Islamic banks. Moreover, Muslim and non-Muslim citizens tend to have different factors which may encourage or discourage them to use Islamic banking.

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