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The purpose of this thesis was to provide insights into the consumer's perception of the risk of Riba (the Islamic prohibition of baking interest) and its influence on consumer's bank patronage. In Bahrain, the Conventional and the Interest-free banks operate side by side representing different philosophies of business and operation. Selecting a conventional bank requires Muslim customers to negotiate the risk of jeopardizing religious convictions, and selecting an Interest-free bank requires customers to adjust to possibilities of losing some of their convenience, time, services quality, and perhaps their money. Specifically, this study explored the interaction of risk perception (ethical and performance) with the banking patronage and a host of attitudinal and behavioural correlates in banking among the Bahraini customers. The study surveyed a random sample of customers from the population of Muslim teachers by means of Questionnaires. Risks of ethical, ideological and religious nature were identified These were new risks that extended the perceived risk research. Findings were reported about the public reaction to Riba as a threat and customers' concerns about it. The analysis also used attitudes, beliefs and world views, worrying, sin perception, religious orientation, Riba charactenstics, banking knowledge, social relations and contexts, as well as the risk handling activities to explore their influences on the perceived risks and banking patronage.

Islamic finance is rapidly gaining momentum around the world. Interpretations of Shari'ah, or Islamic law, state that investments must be free from elements of riba (interest), gharar (uncertainty), maysir (speculation) and haram (unethical) business activities. Islamic equity investing, therefore, utilizes a set of business activity screens and accounting-based screens to exclude firms considered non-permissible under Shari'ah. Despite increased academic interest, there is still much uncertainty surrounding the financial implications of these investment principles. This Ph.D. thesis, comprised of three empirical essays, aims to contribute to this debate. The first essay offers a comprehensive examination of Islamic equity index performance. The findings show that Islamic equity indices have exhibited abnormal returns on a global and developed market level, primarily due to their exclusion of stocks in the financial services sector. The second essay attempts to study the determinants of Islamic investments' financial performance, with a particular focus on the role of country-level factors. The third essay studies performance related issues associated with the accounting-based screening process. A significant proportion of these screens are documented to contribute positively to risk-adjusted performance, most notably in periods of financial market turmoil.

The resurgence of Islam across the globe combined with the resilience that Islamic financial assets have shown against the onslaught of the current financial crisis, make Islamic finance an attractive alternative financial system. Over the past decade, the Islamic finance sector have shown double digit growth rates beyond the traditional areas of the Gulf Cooperation Council (GCC) regions of Asia as well as other parts of the Middle-East and North Africa (MENA) regions. Research suggests that the future of Islamic finance in Africa depends on business opportunities in South Africa, Kenya, Nigeria and Senegal. The South African government, in conjunction with the national finance authorities, have made their intention clear to position the country as the Islamic finance hub for the rest of the African continent. Despite various marketing campaigns over the past decade to convince the public that Islamic banking and finance is for everyone, non-Muslims generally view Islamic banking as being for Muslims alone. Scepticism towards Islamic finance has resulted in a mere 15 per cent of the estimated 1.5 million South African Muslims currently making use of the sector’s banking and retail instruments. This lack of interest is impacting negatively on the country’s aspirations to establish itself as the gateway of Islamic finance to the rest of Africa. Generally, people’s attitudes toward utilising Islamic finance are regarded as a key obstacle to the development of the Islamic banking and finance system in Muslim minority countries. A Kuwait Finance House research report (2012) highlighted a lack of awareness and knowledge of Islamic finance products and services as key factors stifling the growth of the Islamic finance sector in South Africa. In this context, it was deemed necessary to analyse how knowledge, awareness, expectations, beliefs, perceptions and ancillary external factors impact on potential users’ attitude and decision to adopt or reject Islamic finance.By means of adapting Fishbein’s (2000; 2008) Integrative Model of Behavioural Prediction, a universally-acceptable behavioural-change model, this research explains in a holistic manner how cognitive, affective and environmental measures impact on a Port Elizabethan Muslim’s attitude and eventual decision to accept (or reject) Islamic finance. This study has found that knowledge was the most important variable influencing attitude and intention to use (or reject) Islamic finance. Consequently, this thesis proposed that Islamic institutions should focus their efforts on promoting knowledge and awareness of their products among the South African Muslim and non- Muslim population. As the global Shari’ah finance industry continues its positive growth trajectory, it is imperative that Islamic finance stakeholders in South Africa ensure that they exploit the benefits derived from online learning platforms and assist, by means of cross-border collaborations, more students to have greater access to Islamic finance courses. Furthermore, universities and training institutions are encouraged to offer courses and qualifications in Islamic finance to close the talent gap that currently exist in this particular field of study.

A research report submitted In partial fulfilment of the requirements for the degree of Master of Commerce University of the Witwatersrand / The purpose of this study is to analyse the operational economics of Islamic banking transactions in South Africa and to understand how the economics of these transactions lead to the IFRS accounting. The study also aims to highlight the similarities and differences of accounting for these transactions using IFRS, across the different South African banks. The transactions analysed are deposit products of qard and mudaraba and financing products of murabaha, ijarah and diminishing musharaka. The study was conducted through interviews with representatives from each of the four South African banks which offer Islamic banking products. Interviews were semi-structured and allowed for interviewees to voice their perspectives increasing the validity of the interviews. The study found that the specific Shariah requirements of Islamic banking transactions are considered and included in the structure of the contracts by all four banks offering Islamic banking products. However, the economic reality of these transactions closely resembles conventional banking transactions. The study also found that all four banks account for Islamic banking transactions using IFRS but the accounting does not match the Shariah requirements of each transaction, creating a cognitive dissonance between the accounting and the contractual form of the transactions. This study is the first of its kind in South Africa. The study adds to the IASB Consultative Group discussion on accounting for Islamic banking transactions under IFRS. Key words: Conceptual Framework, diminishing musharaka, IFRS, ijarah, Islamic banking, mudaraba, murabaha, qard / MT2017

Thesis (MBA (Business Management))--Stellenbosch University, 2008. / ENGLISH ABSTRACT: The South African retirement fund industry, financially sound and well regulated includes a private savings sector and government employees provided for with a near fully-funded retirement arrangement, but approximately three-quarters of the population reach retirement without adequate savings and are dependent on a government social assistance grant programme. One of the broad objectives of government retirement policy is to encourage individuals to provide adequately for their retirement needs and that of their dependents. The retirement funding system has been codified in the Pension Funds Act of 1956. The only investment guidelines that trustees of retirement funds had to follow was Regulation 28 of the Pension Funds Act, which prescribed maximum limits for investments of funds in the various asset classes but provided very little guidance on appropriate investment strategies. The new draft Regulation 28 compels trustees to draw up carefully considered investment strategies. The South Africa Muslim population, though two percent in number has a significant impact on the economy. This report investigates how Regulation 28 collectively with the new draft regulation can be modified to comply with the tenets of the Muslim faith i.e. Shari'ah (Islamic law) requirements. Perhaps the most significant distinction is investment in equity instruments are the main avenue available to Muslim investors for wealth creation, as Islamic law forbids interest. Islamic Commercial Law differs from conventional Western Finance, the most significant difference being the prohibition of riba (interest), commonly equated to interest in conventional finance. However, there are Muslim scholars and thinkers who are not convinced about equating interest with riba with some challenging the riba interest equation. / AFRIKAANSE OPSOMMING: Die finansieel sterk en goed gereguleerde Suid-Afrikaanse Aftreefondsindustrie sluit 'n privaat spaarsektor in en voorsien aan staatsdienswerknemers 'n aftreeplan wat byna ten volle befonds word. Ongeveer twee derdes van die populasie bereik egter aftrede sonder voldoende fondse en is van die regering se Sosiale Bystandsfondsprogram afhanklik. Een van die bree doelwitte van die regering se aftreefondsbeleid is om individue aan te moedig om voldoende aan hulle en hulle afhanklikes se afreebehoeftes te voorsien. Die aftreefondstelsel is in die Pensioenfondswet van 1956 gekodifiseer. Die enigste beleggingsriglyne wat deur trustees van afreefondse gevolg moes word is Regulasie 28 van die Pensioenfondswet. Hierdie riglyne het maksimum limiete vir die belegging van fondse in verskillende bate kategoriee voargeskryf, maar het baie min leiding ten opsigte van die geskikte beleggingstrategiee voorsien. Die nuwe Regulasie 28 konsep verplig trustees am weldeurdagte beleggingstrategiee op te stel. Die Suid-Afrikaanse Moslem populasie, alhoewel net 2% van die totale populasie, het 'n beduidende impak op die ekonomie. Hierdie verslag ondersoek hoe Regulasie 28 in samewerking met die nuwe Regulasie 28 konsep verander kan word am aan die Moslem geloofsleerstellings, bv. Shari'ah (Islam wet) se vereistes te voldoen.

Thesis (MBA)--Stellenbosch University, 2011. / The Islamic Banking industry has been one of the fastest growing industries worldwide with a compound annual growth rate of 28% between 2006 and 2009(Reuters, 2010). These growth rates were experienced amidst the worst economic meltdown the world has seen in decades. This is a clear indication that there is a high level of confidence in the industry. Although the industry has existed for centuries, the past few decades have brought about a revival in Islamic banking. Many Western countries are recognising the industry’s importance and have taken various steps in supporting the establishment of it. South Africa has also taken such steps and has a vision of becoming a hub for Islamic banking on the African continent. This mini thesis examines the differences in nature of the underlying principles of Islamic and conventional banking which then brings to the fore the various challenges that exist in the unhindered functioning of Islamic banks within Western countries. These challenges revolve around institutional and legal frameworks, regulatory and supervisory bodies, South African Reserve Bank requirements, interest, taxation and conceptual understandings. In order to provide recommendations to address these challenges, case studies of Islamic banking in both, Islamic and Western countries were conducted. These case studies provided insight into how countries have addressed similar challenges and to what degree were they successful. This provided the basis from which recommendations were made for Islamic banking to function efficiently and effectively in South Africa and for the country to achieve its goal of becoming a hub of Islamic banking on the African continent.