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Challenges in Introducing Islamic Insurance (Takaful) into the Tanzania Financial Market: A case of Zanzibar

Received: 19 February 2021    Accepted: 19 March 2021    Published: 30 March 2021
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Abstract

Since Zanzibar it has 99% of Muslims populations; Islamic Insurance (Takaful) seems to be the best alternative to increase financial protection. The main objective of this study was to examine challenges facing insurance operators in introducing Islamic insurance (takaful) in Zanzibar. Quantitative approach was adopted in this study and data was analyzed through descriptive statistical techniques such as frequencies, mean and standard deviation. Simple Random and purposive sampling were used to select 90 respondents. The data were collected through open ended questionnaires. The study found that most of the respondents almost (60%) replied negative perception of Islamic religion as the great challenge that affects the establishment of Takaful insurance in Zanzibar. In addition to that, Lack of capacity from Zanzibar Insurance Company affect the establishment of Takaful insurance in Zanzibar, since majority of the respondents almost more than 60% replied by large extent. The study concludes that lack of innovative and flexible products to cater for Muslim needs affect the establishment of Islamic insurance. Apart from that, the study indicated that, Shortage of skilled man-power to drive Takaful insurance has the great impact to the establishment of Takaful insurance. Therefore, the study recommends that, the concept of Takaful should be disseminated among the masses of Zanzibar; this will further result in enlarging the customer base of Takaful companies in Zanzibar.

Published in Research & Development (Volume 2, Issue 1)
DOI 10.11648/j.rd.20210201.14
Page(s) 20-26
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Islamic Insurance (Takaful), Tanzania Financial Market, Descriptive Statistics

References
[1] Talah, J. H (2009). Takaful in Status Sudan. Journal of Risk and Insurance 63, no. 41: 532-564.
[2] Jaffer, S. (2006). Global Takaful Review: Evolving Trends, Opportunities and Challenges. Islamic Finance News, pp 86-91.
[3] Fisher, O. S. (2008). Takaful Markets and Products: A Training and Reference ManualInstitute of Business administration, Karachi, Pakistan, August Pg 14-22 41.
[4] Ali, K. M. (2008). Islamic Jiban Bima: Bartoman Prekhhpot. Bangladesh Institute of Islamic Life Insurance Limited, Bangladesh Pg 28-31.
[5] Kamsam, T. (2006). Regulatory impediments faced by Market players in Takaful Industry. Islamic Finance news. 31st March (Vol. 3 Issue 8).
[6] Noordin K., Fares D. (2016) Issues and Challenges in Introducing Islamic Insurance (Takaful) into the Algerian Financial Market: Lessons from Malaysia. In: Ab. Manan S., Abd Rahman F., Sahri M. (eds) Contemporary Issues and Development in the Global Halal Industry. Springer, Singapore.
[7] Nabi, G. and Rahman, M. (2019). Exploring Potentials and Challengesof Takaful in Bangladesh. The Quarterly Journal of Islamic Economics Research Bureau, 29 (01 & 02).
[8] Anand, M. (2014). Islamic Insurance in Malaysia: Insights For The Indian Insurance Industry. Singapore Journal of Legal Studies, 1-23.
[9] Wahab, A. A., Lewis, M. K. and Hassan, M. K. (2007). Islamic takaful: Business models, Shariah concerns, and proposed solutions. Thunderbird International Business Review.
[10] Zaki, Z. and Alok, S. (2013). A Comparison of the Efficiency of Islamic and Conventional Insurers. Towers Watson Technical Paper No. 2100531.
[11] Yusop et al. (2011). Risk management efficiency of conventional life insurers and Takaful operators. Insurance Markets and Companies: Analyses and Actuarial Computations, Volume 2, Issue 1.
[12] Al-Amri et al. (2014). Economies of Scope, Organizational Form, and Insolvency Risk: Evidence from the Takaful Insurance Industry. SSRN Electronic Journal.
[13] COMCEC Annual Progress Report 2019.
[14] Khan, I., Rahman, N. N. B. A., Yusoff, M. Y. Z. B. M. et al. (2016). History, problems, and prospects of Islamic insurance (Takaful) in Bangladesh. SpringerPlus 5, 785.
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  • APA Style

    Saadat Imam Makame, Mohammed Hafidh, Abdalla Ussi Hamad. (2021). Challenges in Introducing Islamic Insurance (Takaful) into the Tanzania Financial Market: A case of Zanzibar. Research & Development, 2(1), 20-26. https://doi.org/10.11648/j.rd.20210201.14

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    ACS Style

    Saadat Imam Makame; Mohammed Hafidh; Abdalla Ussi Hamad. Challenges in Introducing Islamic Insurance (Takaful) into the Tanzania Financial Market: A case of Zanzibar. Res. Dev. 2021, 2(1), 20-26. doi: 10.11648/j.rd.20210201.14

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    AMA Style

    Saadat Imam Makame, Mohammed Hafidh, Abdalla Ussi Hamad. Challenges in Introducing Islamic Insurance (Takaful) into the Tanzania Financial Market: A case of Zanzibar. Res Dev. 2021;2(1):20-26. doi: 10.11648/j.rd.20210201.14

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  • @article{10.11648/j.rd.20210201.14,
      author = {Saadat Imam Makame and Mohammed Hafidh and Abdalla Ussi Hamad},
      title = {Challenges in Introducing Islamic Insurance (Takaful) into the Tanzania Financial Market: A case of Zanzibar},
      journal = {Research & Development},
      volume = {2},
      number = {1},
      pages = {20-26},
      doi = {10.11648/j.rd.20210201.14},
      url = {https://doi.org/10.11648/j.rd.20210201.14},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.rd.20210201.14},
      abstract = {Since Zanzibar it has 99% of Muslims populations; Islamic Insurance (Takaful) seems to be the best alternative to increase financial protection. The main objective of this study was to examine challenges facing insurance operators in introducing Islamic insurance (takaful) in Zanzibar. Quantitative approach was adopted in this study and data was analyzed through descriptive statistical techniques such as frequencies, mean and standard deviation. Simple Random and purposive sampling were used to select 90 respondents. The data were collected through open ended questionnaires. The study found that most of the respondents almost (60%) replied negative perception of Islamic religion as the great challenge that affects the establishment of Takaful insurance in Zanzibar. In addition to that, Lack of capacity from Zanzibar Insurance Company affect the establishment of Takaful insurance in Zanzibar, since majority of the respondents almost more than 60% replied by large extent. The study concludes that lack of innovative and flexible products to cater for Muslim needs affect the establishment of Islamic insurance. Apart from that, the study indicated that, Shortage of skilled man-power to drive Takaful insurance has the great impact to the establishment of Takaful insurance. Therefore, the study recommends that, the concept of Takaful should be disseminated among the masses of Zanzibar; this will further result in enlarging the customer base of Takaful companies in Zanzibar.},
     year = {2021}
    }
    

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  • TY  - JOUR
    T1  - Challenges in Introducing Islamic Insurance (Takaful) into the Tanzania Financial Market: A case of Zanzibar
    AU  - Saadat Imam Makame
    AU  - Mohammed Hafidh
    AU  - Abdalla Ussi Hamad
    Y1  - 2021/03/30
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    DO  - 10.11648/j.rd.20210201.14
    T2  - Research & Development
    JF  - Research & Development
    JO  - Research & Development
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    EP  - 26
    PB  - Science Publishing Group
    SN  - 2994-7057
    UR  - https://doi.org/10.11648/j.rd.20210201.14
    AB  - Since Zanzibar it has 99% of Muslims populations; Islamic Insurance (Takaful) seems to be the best alternative to increase financial protection. The main objective of this study was to examine challenges facing insurance operators in introducing Islamic insurance (takaful) in Zanzibar. Quantitative approach was adopted in this study and data was analyzed through descriptive statistical techniques such as frequencies, mean and standard deviation. Simple Random and purposive sampling were used to select 90 respondents. The data were collected through open ended questionnaires. The study found that most of the respondents almost (60%) replied negative perception of Islamic religion as the great challenge that affects the establishment of Takaful insurance in Zanzibar. In addition to that, Lack of capacity from Zanzibar Insurance Company affect the establishment of Takaful insurance in Zanzibar, since majority of the respondents almost more than 60% replied by large extent. The study concludes that lack of innovative and flexible products to cater for Muslim needs affect the establishment of Islamic insurance. Apart from that, the study indicated that, Shortage of skilled man-power to drive Takaful insurance has the great impact to the establishment of Takaful insurance. Therefore, the study recommends that, the concept of Takaful should be disseminated among the masses of Zanzibar; this will further result in enlarging the customer base of Takaful companies in Zanzibar.
    VL  - 2
    IS  - 1
    ER  - 

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Author Information
  • Department of Economic, Zanzibar University, Zanzibar, Tanzania

  • Department of Economic, Zanzibar University, Zanzibar, Tanzania

  • Department of Economic, Zanzibar University, Zanzibar, Tanzania

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