The Impact of Islamic Banking Awareness and Shariah Compliance on Economic Development

Authors

  • Mohammadullah Khalid Department of Banking and Finance Affairs, Faculty of Economics, Paktia University, AFGHANISTAN. https://orcid.org/0009-0001-6576-3661
  • Abdulqayoum Arif Department of Banking and Finance Affairs, Faculty of Economics, Kabul University, AFGHANISTAN.
  • Shafiullah Ghausee Department of BBA, Faculty of Economics, Paktia University, AFGHANISTAN. https://orcid.org/0009-0001-6576-3661
  • Shahidullah Safi Department of Law, Law and Political Science Faculty, Paktia University, AFGHANISTAN. https://orcid.org/0009-0000-9372-6983

DOI:

https://doi.org/10.55544/ijrah.6.4.22

Keywords:

Islamic Banking, Public Awareness, Shariah Compliance, Economic Development, Afghanistan

Abstract

Islamic banking is a Shariah-based financial system that promotes economic development by adhering to the principles of justice, transparency, and ethical finance. Despite the growing recognition of Islamic banking worldwide, limited empirical evidence exists regarding its role in fostering economic development in Afghanistan. This study therefore examines the impact of public awareness of Islamic banking and the Shariah compliance of Islamic banking services on economic development in Afghanistan.

A quantitative research design was employed, and data were collected from 176 respondents using a standardized questionnaire. The collected data were analyzed using STATA software through descriptive statistics, Pearson correlation analysis, and multiple linear regression techniques to test the proposed hypotheses.

The empirical findings indicate that both public awareness of Islamic banking and the perceived Shariah compliance of banking services have positive and statistically significant effects on economic development. The results confirm both research hypotheses (H1 and H2), suggesting that greater awareness and stronger adherence to Shariah principles contribute significantly to promoting economic development.

The study concludes that enhancing public awareness, strengthening Shariah governance and supervisory mechanisms, and improving the quality of Islamic financial services can increase public trust, encourage the wider adoption of Islamic banking services, and contribute substantially to sustainable economic development in Afghanistan. These findings provide valuable insights for policymakers, Islamic financial institutions, and regulatory authorities seeking to strengthen the Islamic banking sector and support the country's long-term economic growth.

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Published

2026-07-28

How to Cite

Khalid, M., Arif, A., Ghausee, S., & Safi, S. (2026). The Impact of Islamic Banking Awareness and Shariah Compliance on Economic Development. Integrated Journal for Research in Arts and Humanities, 6(4), 169–181. https://doi.org/10.55544/ijrah.6.4.22

Issue

Vol. 6 No. 4 (2026): July Issue

Section

Articles

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Copyright (c) 2026 Mohammadullah Khalid, Abdulqayoum Arif, Shafiullah Ghausee, Shahidullah Safi

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

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