Journal Articles
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Item Role of fintech in fostering innovation and economic resilience within Islamic banking: a bibliometric and systematic literature review(International Journal of Accounting and Finance Analytics, 2026) Njogo, Michael N.; Dallu, Abdallah M.; Korir,Fiona J.In light of growing economic uncertainty, Islamic banking institutions are increasingly adopting financial technologies (Fintech) to enhance economic resilience and sustainability. This study explores the role of Fintech in fostering innovation and economic resilience within Islamic banking through a combined bibliometric and systematic literature review. Guided by the PRISMA framework, 98 peer-reviewed articles from 2019–2025 were analyzed, with bibliometric mapping conducted using VOSviewer. The findings reveal a growing interdisciplinary nexus between Islamic finance, digital innovation, and governance, with key themes including Shariah-compliant innovation, financial inclusion, and crisis resilience. Technologies such as blockchain, AI, and mobile banking have enhanced operational efficiency, customer engagement, and ethical compliance. However, regulatory fragmentation, cybersecurity risks, and Shariah harmonization remain persistent challenges. The study offers strategic recommendations for policymakers, financial institutions, and researchers, emphasizing adaptive regulation, user-centric innovation, and inclusive digital infrastructure. By integrating Islamic ethical principles with digital transformation, this review provides original insights into how Islamic fintech can support sustainable, inclusive, and resilient financial ecosystems globally.Item Liquidity management constraints and operational efficiency in Islamic banking systems in Sub-Sahara Africa(Fakultas Ekonomi dan Bisnis Islam, 2026) Njogo, Michael Njoroge.; Korir, Fiona Jepkosgei.; Dallu, Abdallah Mambo.This study examines whether liquidity management enhances or constrains the operational efficiency of Islamic banks operating in SSA, where Sharīʿah-compliant financial infrastructure remains underdeveloped. Using panel data from 35 fully fledged Islamic banks over the period 2010–2024, the study employs a bias-corrected two-stage Data Envelopment Analysis (DEA) framework with Simar–Wilson bootstrap procedures, followed by fixed-effects regression to ensure consistent inference. The findings reveal that, despite maintaining relatively high liquidity buffers, Islamic banks in SSA operate significantly below the efficiency frontier, with average bias-corrected efficiency levels of 31.8%. Contrary to conventional banking theory, liquidity exhibits only a weak and marginal relationship with efficiency. This result reflects structural features of SSA Islamic financial systems, including shallow sukuk markets, limited Islamic interbank activity, and the absence of effective Sharīʿah-compliant lender-of-last-resort facilities, which collectively constrain the productive deployment of liquidity. By conceptualising liquidity as a binding monetary constraint rather than a discretionary management tool, this study offers a novel contribution to Islamic banking and monetary economics, particularly in the context of institutionally incomplete markets. The results further show that asset quality and institutional maturity play a more decisive role in shaping efficiency outcomes once liquidity constraints bind. The findings highlight that improving efficiency in SSA Islamic banking systems requires system-level reforms, underscoring the need for Islamic monetary authorities to prioritise the development of Sharīʿah-compliant liquidity infrastructure, including active sukuk markets, Islamic interbank facilities, and credible lender-of-last-resort mechanisms.Item Income stability, earnings volatility, and efficiency in Islamic banks: evidence from Sub-Saharan Africa(EJIF, 2026) Njogo, Michael Njoroge.; Dallu, Abdallah Mambo.; Korir, Fiona Jepkosgei.This study examines the relationship between earnings volatility and operational efficiency in Islamic banks in SSA, addressing a key methodological limitation in the Islamic banking efficiency literature. Conventional Data Envelopment Analysis (DEA), widely used in prior studies, produces upward-biased efficiency scores and invalid second-stage inference when efficiency is linked to stochastic variables such as earnings volatility. This limitation is particularly consequential in Islamic banking, where income streams are structurally volatile due to profit-and-loss sharing and asset-backed financing arrangements. Methodologically, this study demonstrates the necessity of bias correction and applies the Simar–Wilson two-stage DEA framework to obtain statistically valid efficiency–volatility estimates. Using a balanced panel of fully-fledged Islamic banks in SSA from 2010 to 2024, operational efficiency is measured as income-generation efficiency based on non-interest revenue streams. First, operational efficiency is estimated under alternative returns-to-scale assumptions using non-interest operating expenses as inputs and Shariah-compliant non-interest income components as outputs. In the second stage, bias-corrected efficiency scores are regressed on earnings volatility—measured as the rolling standard deviation of return on assets (ROA), which captures earnings volatility relative to asset utilization and aligns with operational efficiency—using truncated regression with bootstrapping. The results reveal a statistically significant negative relationship between earnings volatility and operational efficiency, indicating that earnings volatility weakens Islamic banks’ capacity to efficiently transform operating costs into Shariah-compliant income. Robustness checks confirm the stability of the findings across efficiency specifications. Beyond its empirical contribution, the study shows that efficiency levels reported in prior Islamic banking studies relying on conventional DEA may be systematically overstated in volatile-income environments, with important implications for supervision and policy in emerging Islamic finance markets.Item Prudential calibration and regulatory infrastructure in emerging Islamic banking systems: evidence and policy implications from Sub-Saharan Africa(AREBUS Journal, 2026) Njogo, Michael Njoroge.; Dallu, Abdallah Mambo.; Korir, Fiona Jepkosgei.This study addresses the prudential calibration challenge in emerging Islamic banking systems by examining whether prevailing capital, liquidity, and governance thresholds are proportionately aligned with operational productivity. Focusing on Sub-Saharan Africa (SSA), it reframes financial soundness indicators as regulatory design variables rather than isolated performance determinants. The study employs a bias-corrected two-stage Data Envelopment Analysis (DEA) on a balanced panel of 35 fully fledged Islamic banks in SSA over the period 2010–2024. Efficiency scores are estimated under variable returns to scale and subsequently analysed using truncated regression against CAMELS-based prudential indicators. The findings are interpreted through a regulatory calibration framework grounded in efficiency–stability trade-off theory. Results reveal persistent inefficiencies primarily driven by scale constraints rather than managerial deficiencies. Capital adequacy does not exhibit proportional efficiency gains, liquidity strength shows only modest productivity alignment, and asset quality demonstrates a more consistent association with operational performance. The evidence suggests that mechanical prudential reinforcement in structurally shallow markets may yield diminishing productivity returns. The study proposes a proportional prudential calibration approach integrating capital design, liquidity infrastructure development, and governance strengthening to align stability objectives with productive intermediation better. This paper advances Islamic banking research by positioning operational efficiency as a regulatory diagnostic tool and introducing an empirically grounded prudential calibration framework for emerging financial systems.Item Asset quality, non-performing financing, and early-warning indicators of operational stress in Islamic banking systems: evidence from SSA(Journal of Islamic Economic Studies, 2026) Njogo, Michael Njoroge.; Dallu, Abdallah Mambo.; Korir, Fiona Jepkosgei.This study examines whether Non-Performing Finance (NPF) functions as an early-warning indicator of operational stress in Islamic banks operating in SSA. Departing from conventional efficiency-determinant approaches, the study conceptualises operational efficiency as a diagnostic manifestation of internal stress transmission rather than a measure of managerial performance. The analysis employs a Simar–Wilson two-stage Data Envelopment Analysis framework to generate bias-corrected efficiency scores for a balanced panel of fully fledged Islamic banks over the period 2010–2024, followed by two-way fixed-effects panel regression to assess the early-warning role of lagged NPF. The results show that increases in NPF systematically precede subsequent declines in operational efficiency, indicating that asset quality deterioration is transmitted internally through higher monitoring, restructuring, and Sharīʿah governance costs. The findings further reveal that such asset-quality-induced operational stress is persistent and more pronounced in structurally constrained banking environments. By reframing NPF as a forward-looking supervisory trigger and efficiency as a stress indicator, the study provides novel evidence for regulators and monetary authorities seeking to enhance early-warning frameworks in Islamic banking systems globally today.Item Financial soundness and operational efficiency of Islamic banks in Sub-Saharan Africa: evidence from a bias-corrected DEA and panel regression framework(Emerald Publishing., 2026) Njogo, Michael Njoroge.; Dallu, Abdallah Mambo.; Korir, Fiona Jepkosgei.Purpose This study examined the effect of financial soundness on the operational efficiency of Islamic banks operating in Sub-Saharan Africa (SSA), a region characterized by emerging Islamic banking systems and constraints. It focused on how capital adequacy, asset quality, earnings quality and liquidity management influence efficiency outcomes. Design/methodology/approach The study applies a Simar–Wilson two-stage data envelopment analysis framework to a balanced panel of 35 fully-fledged Islamic banks in SSA from 2010 to 2024. Bias-corrected efficiency scores are estimated under variable returns to scale and subsequently analyzed using a panel regression framework with two-way fixed effects and robust standard errors to control for unobserved heterogeneity across banks and time. Findings The findings revealed a heterogeneous relationship between financial soundness and operational efficiency: asset quality was positively and significantly associated with efficiency, whereas earnings quality exhibited a negative relationship, indicating a profitability–efficiency trade-off. Capital adequacy showed no direct effect, while liquidity management demonstrated a weak and context-dependent influence. Practical implications The analysis is limited to fully-fledged Islamic banks with complete data. The findings suggest that regulators and managers should prioritize asset quality improvement and efficiency-oriented strategies over balance-sheet expansion. Originality/value The study provides one of the first ever comprehensive, bias-corrected DEA empirical assessments of operational efficiency in Sub-Saharan Africa in Islamic banking. By distinguishing operational efficiency from traditional profitability measures, it challenges the assumption that improved financial soundness inherently enhances efficiency in emerging Islamic banking markets.Item Bank size as a mediating mechanism between financial soundness and operational efficiency: evidence from Islamic banks in sub-Saharan Africa(Emerald Publishing., 2026) Njogo, Michael Njoroge.; Dallu, Abdallah Mambo.; Korir, Fiona Jepkosgei.Purpose This study examines whether bank size mediates the relationship between financial soundness and operational efficiency of Islamic banks in sub-Saharan Africa (SSA), where the sector remains small despite growing policy relevance. Design/methodology/approach Panel data from 35 Islamic banks (2010–2024) were analysed using bias-corrected Variable Returns to Scale scores from the Simar–Wilson two-stage Data Envelopment Analysis. A panel-based mediation model with two-way fixed effects was employed, with bank size (log of deposits) as the mediator. Findings Financial soundness significantly improves operational efficiency, with asset quality exerting a negative effect and earnings stability a positive effect. However, financial soundness does not significantly influence bank size, and bank size does not significantly affect efficiency once soundness is controlled for. Consequently, the mediation hypothesis is not supported, indicating that scale does not function as a transmission mechanism in SSA Islamic banking. Research limitations/implications The findings caution against consolidation-led efficiency strategies and support policy emphasis on governance, regulatory infrastructure and operational capacity building to enhance inclusive and sustainable Islamic banking development. Originality/value This study provides one of the first empirical assessments from SSA that explicitly tests the mediating role of bank size in the soundness–efficiency relationship. The findings show that scale expansion does not operate as a transmission mechanism, suggesting that scale-driven efficiency strategies may have limited applicability.Item Debt recovery practices and loan performance of deposit-taking microfinance banks in Kenya(IJSSME, 2024) Ondabu, Ibrahim Tirimba.; Kamanda, Cynicah Nyaboke.; Teimet, Paul.; Matanda, Joshua.This study explored the relationship between debt recovery practices and loan performance for deposit-taking microfinance banks in Kenya. The study is guided by agency theory and risk shifting theory. The objectives of this study include determine the effect of third-party credit and analyze the effect of collection agencies on loan performance. This research adopted a descriptive approach, the research meticulously captured numerical data for rigorous statistical analysis, aligning with the study’s objective. This study used census survey, all 14 microfinance banks licensed and operational by the Central Bank of Kenya were included. This study used self-administered questionnaires. In this study diagnostic tests were performed to validated the robustness of statistical analysis using SPSS. Validity and reliability were ensured through content validity guidelines and expert assessments where reliability has shown an average Cronbach alpha of 0.7 for all the variables. The study conducted a detailed analysis of the relationships between various elements related to loan performance surveyed microfinance banks. In this study the correlation matrix revealed strong positive correlations between third-party credit guarantees, and collection agencies. Regression analysis showed a significant impact of these factors on loan performance, with an R Square of 0.416. The study’s hypotheses regarding the influence of third-party credit guarantees, and collection agencies on loan performance were tested and supported. This study concluded that effective debt recovery practices significantly enhance loan performance in MFBs. Recommendations included reassessing debt policies, focusing on equity policies, and streamlining policy implementation concerning loan defaulters. The study also identified areas for further research to deepen understanding of loan performance dynamics in the microfinance sector. The study highlighted the importance of proactive debt recovery strategies and risk mitigation measures in enhancing the financial sustainability of MFBs in Kenya.Item Key drivers of public sector audit effectiveness in Kenya and lessons for developing economies.(IISTE, 2024) Ondabu, Ibrahim Tirimba.; Kanini, Joyce Mueni.; Njuguna, Peter.; Kithuka, Geoffrey.This study explores the key factors influencing the effectiveness of public sector audits (PSA) within Kenya's national government and affiliated entities. Focusing on the role of institutional corporate governance, professional and technical competence, resource availability, and internal control processes, this research analyzes data from the Office of the Auditor General's 2021/2022 audit reports. Using a descriptive design and content analysis, 43 financial statements were examined to assess how these determinants impact audit outcomes. Findings indicate that professional and technical competence has the most significant positive impact on PSA effectiveness, followed by strong corporate governance and robust internal controls. Interestingly, resource availability showed a negative correlation, suggesting that merely increasing resources without strategic allocation may not enhance audit performance. These insights highlight the need for targeted training and improved governance structures to strengthen Kenya's audit capabilities and enhance public accountability.Item Government funding, institutional size, and student enrolment in public TVET institutions: evidence from Nairobi Metropolitan, Kenya(African Development Finance Journal, 2025) Ondabu, Ibrahim Tirimba.; Macharia, Alice N.This article examines the influence of government funding, specifically Higher Education Loans Board (HELB) loans and capitation, on student enrolment in public Technical and Vocational Education and Training (TVET) institutions in Nairobi Metropolitan, Kenya. Using longitudinal panel data from 2019–2023 across 12 institutions, the study analyzes how institutional size moderates the relationship between funding and enrolment. Results show that HELB, capitation, and institutional size jointly explain 66.9% of the variance in enrolment rates, with all predictors exerting significant positive effects. Larger institutions benefit disproportionately due to economies of scale and stronger absorptive capacity. The findings highlight the centrality of coordinated demand- and supply-side financing models in promoting equitable access to technical education. Policy recommendations include strengthening funding frameworks, expanding capacity in smaller TVETs, and improving administrative efficiency to maximize the impact of public financing.