EFFECT OF SHARI^AH GOVERNANCE ON PERFORMANCE OF FULLY-FLEDGED ISLAMIC BANKS IN AFRICA Aishatu Usman Muhammad and Dr Murni Yusoff
Centre for Islamic Development Management Studies
Universiti Sains Malaysia
11800, Penang
Malaysia
Abstract
Shari^ah governance is believed to influence the performance of Islamic banks in some countries while other countries are not. The performance of Islamic banks has seen an improvement throughout the last three decades- the great concern, however, is about Islamic banks^ adherence to Shari^ah guidelines and procedures. Despite the industry^s growth, Africa has not seen much progress despite having a significant number of Muslim population. Further, the top Islamic banks across the globe presently do not include any of the banks in the whole African continent. Therefore, this study intends to examine the effect of Shari^ah governance on fully-fledged Islamic banks in the African continent by using panel data of 28 Islamic banks across Africa between year of 2015 and 2020 and analysed using STATA. The findings show that Shari^ah board size and Shari^ah audit committee size positively and significantly affect the performance of Islamic banks in Africa. However, board size shows a significant but negative effect on the performance of Islamic banks. The findings also indicate that size and age of banks positively and significantly affect the performance of Islamic banks.
