Obstacles to the Development and Performance of Para-Islamic Financial Institutions in Ondo and Lagos States of Nigeria

Abstract

The study examined the obstacles to the development and performance of Para-Islamic Financial Institutions in Ondo and Lagos State of Nigeria. It also recommended suitable remedies to overcome these obstacles. The study explored both primary and secondary sources of data collection. For primary data, a non-probability sampling technique was adopted in selecting 150 respondents for the study because it provided a better opportunity for administering questionnaires directly and individually to the respondents. The study employed both descriptive and inferential methods of analysis. The secondary data were sourced from quranic commentaries, books, journals and the internet. The findings revealed that inadequate legal framework, lack of sharia courts to settle disputes , paucity of reliable operation template, poor financial literacy, lack of profit sharing finance, competition, inadequate human resources, religious differences, lack of trust, sincerity and discipline, myopic and monotonous goals, unreliable feasibility study, people’s attitude towards Para-Islamic financial institutions and inadequate enlightenment and awareness programme on interest-free financial institutions constitute obstacles to the development and performance of these institutions in the two states. The study concluded that suitable measures should be taken in order to overcome these obstacles.