Obstacles to Implementing the Commission-Based Reward System in Libyan Banks. "A Descriptive Study of Banks Operating in the Eastern Region"

Abstract

The study examines the Ju‘ālah contract as one of the flexible instruments of Islamic finance that can be utilized by Islamic banks to meet the needs of individuals and institutions, with a particular focus on its application within Libyan banks. Despite its significant jurisprudential and operational advantages, Libyan Islamic banks have not yet adopted Ju‘ālah as part of their financing products. The study aims to identify the obstacles and challenges that hinder the adoption of this financing tool, which include sharia-related, legal, regulatory, administrative, and social dimensions. The researcher adopted a quantitative methodology, employing a questionnaire distributed to a sample of employees and banking executives across several Libyan banks. The collected data were analyzed using the SPSS software. The findings revealed a notable lack of awareness and understanding of the Ju‘ālah contract, as well as insufficient legislative and regulatory support from the Central Bank of Libya. Additionally, the study identified a shortage of qualified personnel and weaknesses in electronic systems that facilitate the implementation of such contracts. The study concludes that the Ju‘ālah contract has the potential to diversify Islamic financing products and enhance banking performance, provided that a supportive regulatory and legal environment is established. It further recommends the development of sharia and administrative guidelines for implementing Ju‘ālah, integrating it into the Islamic financing policies of Libyan banks, developing human capital, and strengthening coordination between sharia supervisory boards and the Central Bank of Libya.