Somali Remittance Companies’ Transformation into Islamic Banks ()
ABSTRACT
Somalia’s
financial industry is transforming. Some remittance companies have transformed into Islamic
banks, which was not easy because the remittance companies lacked the technology,
finance, and human capital necessary to make the banks sustainable. Money transfer
operators that transformed into Islamic banks also risk failure due to limited knowledge
of the transformation’s effects. The purpose of this descriptive phenomenological
study was to explore the lived experiences of a sample of leaders of the Somali
remittance companies that transformed into Islamic
banks. A three-step conceptual framework consisting of goal, process, and
outcome guided the inquiry. The research question concerned the lived experiences
of bank leaders who participated in a transformation from a remittance company to
an Islamic bank. In-depth interviews of a purposeful
sample of 10 participants yielded the study data. The results showed that
existing demand was the most significant driver of organizational change. Apart
from the scarce Islamic banking expertise in Somalia, one of the significant challenges
the new banks faced was resistance to organizational change. Further research on
the effectiveness of the new banks and their effect on Somali society is necessary.
This study could contribute to positive social change if other bank leaders who
face the need to change from a remittance company to an Islamic bank use the study
findings to ensure a successful, sustainable transformation, thus providing Somalians
with greater access to Shariah-compliant products and services.
Share and Cite:
Farah, A. and Levasseur, R. (2022) Somali Remittance Companies’ Transformation into Islamic Banks.
Open Journal of Business and Management,
10, 3474-3484. doi:
10.4236/ojbm.2022.106171.
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