Patronizing Islamic finance services by Cameroonian small and medium-sized entrepreneurs: examining the level and the role of Islamic finance awareness

Armand Mboutchouang Kountchou, Ali Haruna and Paul Tadzong Mouafo

International Journal of Islamic and Middle Eastern Finance and Management, 2025, vol. 18, issue 4, 747-764

Abstract: Purpose - This study aims to analyze the level of Islamic finance awareness by Cameroonian small and medium-sized entrepreneurs (SMEs) on the one hand, and the effects of this awareness on the entrepreneurs’ decision to patronize (adopt) Islamic finance, on the other hand. Design/methodology/approach - This study uses primary data collected from a cross-section of 1,358 SMEs in eight regions of Cameroon using self-administered structured questionnaires. The authors apply mean computation analyses and a binary logistic model to test the study hypotheses. The authors also check for endogeneity and carry out sensitivity analyses. Findings - The results show that the level of Islamic finance awareness among Cameroonian SMEs can be regarded as average. Furthermore, after dividing the sample into two groups based on the religion of the entrepreneur, it is revealed that the awareness level among Muslim entrepreneurs is considered higher than that of the non-Muslims, with a below-average level of awareness, thereby underlying the place occupied by the Islamic religion as a driver of the decision to engage in the Islamic mode of finance. The application of the simple logistic model reveals that awareness enhances the adoption of Islamic finance by Cameroonian SMEs and that these effects are modulated by the Islamic religion and the educational level channels. Practical implications - Policymakers and bank managers are encouraged to prioritize more consumer awareness programs as a means of promoting the adoption of Islamic finance by SMEs in Cameroon. Future research in this area should equally consider the supply-side aspects of Islamic finance such as bank managers whose perception and awareness are equally key toward ensuring a more holistic agenda for the promotion of Islamic finance services. Originality/value - To the best of the authors’ knowledge, this is the first study that analyzes the awareness level of SMEs in the context of a non-Muslim-dominated sub-Saharan African country.

Keywords: Cameroon; Awareness; Islamic finance; SMEs (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eme:imefmp:imefm-02-2024-0076

DOI: 10.1108/IMEFM-02-2024-0076

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