An Assessment of Patronage of Islamic Banking Products among SMEs in South West, Nigeria

Abstract

The viability and profitability of Islamic banks depend on how well their products are being patronized. This study assesses the level of patronage of Islamic banking products by SMEs in Southwest Nigeria. Primary data were collected through the administration of one hundred and fifty (150) questionnaires to various SMEs across Southwest Nigeria. Descriptive analysis was used to analyze the collected data. The study found that there is significantly low patronage of Islamic banking products among SMEs in Southwest Nigeria, as only about 21% of respondents have a thorough awareness of Islamic banking products. Factors discovered to have hindered the patronage of Islamic banking products are low awareness of the existence of Islamic banking products, wrong perception of SMEs about Islamic banking products and proximity of Islamic banks to SMEs. Others are: unwillingness of SMEs to share profit and lack of proper understanding of the operations of Islamic banking products.