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The potential impact of Islamic banks on economic growth in Somalia

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Date
2023
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Abstract
This study examined the potential impact of Islamic banks on the economic growth in Somalia. The research design used in the study was quantitative. The study utilized annual time series data on the GDP growth rate, gross domestic saving, and net financial acquisitions. Correlations analysis and simple OLs method were used for the multiple regression model of the study. The results of the study could not establish any statistically significant relationship between net financial acquisitions and GDP growth rate in Somalia and this might be due to the ineffectiveness of private commercial banks to allocate resources including credit facilities between savers and borrowers and play the role of intermediation. Similarly, domestic saving does not exert any significant effect on GDP growth in Somalia since domestic saving is very low compared to other financial flows such as remittances which are considered one of the key variables that ignite the economic growth rate in the country. The study's main limitation was the data availability problem on our variables of interest namely GDP growth rate, net financial acquisitions, and gross domestic savings because only 9 observations of data could be gathered from the World Bank which represents a very small sample size and that might be the reasons, we couldn't have established any statistically significant relationship between the dependent and independent variables.
Keywords
Islamic banks , Economic growth , Multiple Linear Regression Model , Somalia , Project paper (eMIF)
Citation
Mustafa Bare Yusuf, M. B. (2023). The potential impact of Islamic banks on economic growth in Somalia (Master dissertation). INCEIF, Kuala Lumpur. Retrieved from https://ikr.inceif.org/handle/INCEIF/3941
Publisher
INCEIF

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