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related. The findings of Haron et al. (1994), Gerrad and Cunningham (1997), and Metawaand

Almossawi (1998) arrived at similar conclusions: that the majority of respondents

would consider establishing a relationship with an Islamic bank if they had

substantialun derstanding of its operation. Also, they revealed that Muslims were more aware

of theexistence of Islamic banking than non-Muslims, and that there was no differentiatio

n in bank selection criteria between Muslims and nonMuslims.In 2002, Ahmed

and Haron conducted a similar study focused on the perceptions of Malaysian corporate

customers toward Islamic banking products and services. A majorityof the

respondents said that the main reasons why people select Islamic banking productsare

based equally on religious and economic consideration s. When asked about themarketing

of the products, a majority found it lacking.At the World Islamic Banking

Conference in 2004, a session was held on international media perceptions of the Islamic

finance industry. Khalid Almaeena (2 004), editorin-chief of Arab News, said, media

coverage of Islamic banking has been at best promoti onal and erratic, and at worst

hostile and undermining. During the same session,Jame s Zogby (2004) expanded

upon his previous work, explaining that in the presentclimat e, the onus is on Islamic

bankers to engage with the media and become advocatesfor business in the region (WIBC, 2005)

The lead panelists at the conference came totheir own general consensus on the state

of the industry. They felt that the industry hadgrown up and matured, but that in order to

continue this growth more investment in product development was needed as a way to widen the

reach of the industry, increasehum an capital, and improve reporting.Ha nson (2000) suggested

that organizations should impro ve their services to meet thecustomers ' wants and

requirements . In another study, service quality is considered veryimportan t indicator

towards customer understandin g and satisfaction by deliveringqua lity services

according to customers' expectations. (Spreng and Machoy, 1996).Gouna ris et al. (2003)

explored the service quality in Greek banking industry and found avarie d influence of

each dimensi on of service quality on customer satisfaction. It isreported that service quality is

important for differentiatio n to compete in the market andretain the customers for long-term benefits

(Curry and Penman, 2004). Service quality10 | Page

has positive influence to customers and financial performance (Duncan and Elliott,2004). However,

customers understandin g of changing needs and expectations is anessential prerequisite for the

financial sector (Joseph et al., 2005). Custo mers perceptionof service quality in

developing countries is significantly different from the perception of bank customers in

developed countries like USA (Malhotra et al., 2005). A comparison between Islamic and

conventional banks reflects that four dimensions: Personal skills,reliabilit y, values,

and image were significant in conventional banks. While twodimensio ns of service quality, that

is, values and personal skills are significant in case of Islamic banks (Jabnoun and

Khalifa, 2005). It is reported that provision of better qualityservic es could result into

satisfied customers who understand the product (Gao et al.,2006).Gla vell et al.

(2006) conducted an empirical analysis of bank customers from five Balkancountr

ies and found a significant difference in the customers' understandin g of servicequalit

y in different countries. Greek customers have highest understandin g towardsservi

ce quality. Service quality could be ensured by implementati on of total qualitymanag

ement techniques in the banking sector (AlMarri et al., 2007). It is evident that political,

technological , environment al and socioeconomi c factors influence the servicequalit

y perceptions of customers. It is reported that Greece customers have higher levelsof service

quality perceptions as compared to Bulgarian customers (Petridou et al., 2007).Similar

ly, it is found that dimensions of service quality have a strong positive impact

on bank performance (Akroush, 2008).Boyd et al. (1994) investigated the bank selection

criteria on the basis of demographic characteristic s and found a significant difference between

service quality understandin gof white collar customers and low income custo

mers. It is reported that gender roles andresponsib ilities are shaped due to specific cultural,

social and religious factors. In Muslimcountr ies male is responsible for financial activities

outside the home while female perfor ms domestic activities inside the home (Obbe, 1980; Kinsey,

1988; Ogenyi, 1997;Iheduru , 2002). Due to these factors men have more access to

banking, education andinsurance facilities as compared to women (Ajakaiye and Olomola,

2003). Ayadi (1996)11 | Page concluded that female bank customers

are engaged in lesser banking activities than malecustome rs due to lower

income.It is reported that customers' understandin g of service quality is very important

tocompete in the market (Hoffman and Bateson, 2002). Customers' understandin g of service

quality is strongly dependent on customers' values and beliefs that vary

from oneculture to another (Furer et al., 2002). It is found that gender affect s the service

qualityunders tanding of bank customers and they show a varied response

towards differentdime nsions of service quality (Spathis, 2004). Similarly, a

varied pattern of customer sati sfaction and behavioral outcomes is observed among male

and female bank customers(Ya vas et al., 1997). In another study, findings

showed that there is difference in choicefactors by male and female bank custom ers in

selection of their respective bank (Omar,2008). On the basis of existing literature this

study examines the understa nding of bank custom ers regarding service quality

offered by Islamic banking.

CHAPTE R THREE3.

Methodo logy
3.1 Description of the Study Area

The study will be conducted at Kenya Commercial Bank (KCB) and National Bank

of Commerce (NBC) Morogoro branches which are located at the center of the

regionalhead quarter. The se banks are selected due to fact that t hey are the only financia linstitutions

in this region that provides Islamic banking services. And due to limitedfunds for data

collection this is the suitable area due to fact that less cost will be incurredcom pared to

going in other areas.Also Morogoro as one of the regions which is near to the

coastal regions is believed tohave large number of Muslims, and that is why it is selected

for such studies. 3.2 Research Design In this study a cross section

al design will be used in which data will be collected at three points (locations) at different

time. It has been suggested that a cross sectional design in12 | Page

data collection is considered to be favorable because of the resource and time limitationfor

data collection (Bailey, 1995). 3.3 Sampling Procedures and

Sample Size The sample of 50 customers who have shariah accounts will

be selected from the two banks. From each group of bank (providing Isl amic banking

service), customers wi ll beselected randomly to collect data by selfadministrate d

questionnair es. This study alsowill adop t personal c ontact appr oach, that is , respondent

s will be app roached pers onally. The researcher w ill explain the question naire and the objective

of survey bytelling its purpose, the meaning of the items and what is expected

from the respondents. 3.4 Data Collection3 .4.1 Primary Data Collection

Structured questionnair es will be developed to record the responses of customers of Islamic ba

nking operat ing at Morog oro. These q uestionnaire s will be dist ributedsimult aneously by two trained

administrator s (including me) to 50 respondents after Friday prayers at three different

mosques during AprilMay 2011 at Morogoro town. Thenumber of people available for

the survey and only those meeting specific selectioncrit eria (i.e. Isla mic banking

customers) will be asked to complete the question s.Interviews on key informants and

discussions will be done to supplement information inthe questionnaire .

3.4.2 Secondary Data Collection Secondary data will be obtained using

published and unpublished relevant documentsfr om KCB and NBC and other

information will be obtained from electronic sources suchas internet as

well as documentati ons available from other available Islamic financialinstit

ution sources. 3.5 Data Collection and Analysis The data to be collected

from the bank will be coded and analyzed using a tool known asAmos. Quantitative

information from discussions and reports will be analyzed using13 |

Page content and structuralfunction anal ysis. Percent ages, means , frequencies and other rel

ated statistics will be used to describe the characteristic s of the study area and

sample popul ation. 3.6. Schedule of Activitie s The following are the

table which shows the schedule of activities. Table 1: Schedule of activities from January 2011 to July

2011N u m b erActivitie s J a n u a r y20 11February2 011March20 11April2011 May2011Jun e20111

Titlesubmissi onandliteratu rereview 2 Proposalsub mission 3

Datacollectio n 4 Dataanalysis 5 Reportwriting 6 Submissionth e report

3.7. Budget of Research Sources of fund for this study are The High Education

Student Loan Board (HESLB).Thet otal amount of money to be used is 180,000.The budget

breakdown is shown in Table below. Table2: Budget of the research I t e m s Q u a n t i t y U n i t c o s t

i n T s h s T o t a l i n ( T s h s ) 14 | Page

T y p i n g 2 0 p a g

e s p a g e @ 1 0 0 0 2 0 , 0 0 0 P r i n t i n g 6 0 p a g e s p a g e @ 2 0 0 1 2 , 0

0 0 P h o t o c o p y i n g 6 0 p a g e s p a g e @ 5 0 3 , 0 0 0 Bindin g propos

al3 draf ts@ draf t 2,000 6,000T r a v e l c o s t 2 t r i p s @ t r i p 5 , 0 0 0 1

0 , 0 0 0 M e a l a n d accommodati on6 d a y s @ d a y 1 5 , 0 0 0 9 0 , 0 0 0 C o m m u n

i c a t i o n 1 0 t i m e s @ c a l l 9 0 0 9 , 0 0 0 G r a n d t o t a

l ,

1 0

8 0

0 0

REFERE NCES
Ahmad, Norafifah and Haron, Sudin, 2002.

Perceptions of Malaysian corporatecus tomers about Western perception of Islamic banking

(www.ameinf o.com ),Accessed on 4 February 2011.Alvarez, G. (2002).

Operational Risk Event Classification . Available athttp://www. garp.com Access date:

27th January, 2011.Ariff, M

,

Research Report on Islamic Banking

taken from Asian-Pacific EconomicLite rature, Vol. 2, No. 2 (September 1988), pp. 46-

62http://hara m.wordpress. com accesse d on 24 January 2011Bailey, K.D (1995). Methods of

Social Resear ch, (Fourth Ed). The Free Press, NewYork.15 | Page

Research Proposal on Islamic Banking 2.

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