Comparision between Islamic and conventional banking and financial services in the Maldives / Sodiq Ahmed

ABSTRACT
The purpose of this research is to investigate the comparison between Islamic and conventional banking
and financial services in the Maldives. In this study, I will focus my questions based on four main areas,
such as business model, demand level, customer service and economic benefits. Based on these four areas
I will present the results I have founded.
The financial sector in the Maldives is very narrow. According to Maldives Monetary Authority (MMA)
there are only eight banks currently were operating in the Maldives. There is one locally owned
commercial bank, branches of five foreign banks, one locally incorporated subsidiary of a foreign bank
and an Islamic bank. Most of the banks are providing conventional banking services. Recently only two
banks are providing Islamic banking facilities in the Maldives. However, Housing Development Finance
Corporation Plc. (HDFC) provides Sharia compliant financing facilities to construct a house or an apartment
for the purpose of residential or rental to be occupied by owners, co-owner or tenants.
Like other countries, Islamic banking and Financial services are expanding speedily in the Maldives.
However, there is no available study on comparison between Islamic and financial services with
conventional banking and financial services in the Maldives. So, there is a debate among public, some
people saying conventional banking better than Islamic banking, most of people argue Islamic banking is
better than conventional banking in the Maldives. So, public need to understand with one is providing
better services to them.
A qualitative study was carried out with the involvement of three different groups of people such as the
Banking Authorities, the Customers of Islamic banking and conventional banking and financial institution.
The interviews are based on contracts used, price of facilities offered, fairness level and consumer
protection available in the differences in Islamic and conventional banking and financial services in the
Maldives. Furthermore, it determines public knowledge, demand for Islamic and conventional banking
plus financial products, types of services provided, service speed and the benefits and harms to the
economy and the differences in Islamic and conventional banking and financial services in the Maldives.
Islamic banking, Islamic finance, Muslim population, Muslim scholars, Islamic banking growth in the
Maldives and Islamic banking challenges are the keywords in this research.