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Islamic finance has exhibited immense potential to transform the global financial landscape in the recent years. In reaction to the trend, Nigeria introduced Islamic banking system to cater to the need of the teeming population and promote financial inclusion, among other potential benefits. Unfortunately, the notable growth recorded by the banks since the inception of the Islamic banking system is slowing down because of religiously induced sentiments and criticisms championed by certain non-Muslim segments of the society. Interestingly, even with the impish hype and publicity, non-Muslims make a significant customer base of the Islamic banks. Therefore, the current paper aims to investigate the factors influencing the choice of Islamic banking among non-Muslim customers, using the theory of planned behaviour as a conceptual framework.

This research adopts a positivist approach and relies on facts and quantitative data in an objective manner. Positivism emphasizes on using scientific methods to derive factual and quantifiable results.

Based on the regression analysis, subjective norm was found to be the most significant factor influencing the choice of Islamic banking followed by perceived behavioural control and attitude. As a result, it is important for Islamic banking institutions and relevant regulatory agencies to take preemptive measures that may protect and enhance these factors in a bid to promote patronage and eventual success of Islamic banking in Nigeria, especially in the face of growing scepticism.

The existing literature focuses on the choices of either Muslims without due emphasis on the determinant of choice in the case of non-Muslim customers. The growing support of Islamic banking products, cutting across religious divides, compels research on the factors that influence the choice of Islamic banking among non-Muslim customers. Hence, this research seeks to bridge the gap in the existing literature by embarking on an investigation into the factors influencing the choice of Islamic banking among non-Muslim customers in the context of Nigeria.

The purpose of this paper is to review the literature on Islamic finance vis-à-vis legal and Sharīʿah non-compliance risks in its transactions and judicial dispute resolution in Nigeria. This is with a view to putting forward direction for future studies on the duo of legal and Sharīʿah non-compliance risks and their impact in Islamic finance.

This review is designed as an exploratory study and qualitative methodology is used in examining relevant literature comprising of primary and secondary data while identifying legal risk and Sharīʿah non-compliance risks of Nigeria’s Islamic finance industry. Using the doctrinal approach together with content analysis, relevant Nigerian laws and judicial precedents applicable to Islamic finance practice and related publications were examined in determining the identified risks.

Undeveloped laws, the uncertainty of Sharīʿah governance and enforceability issues are identified as legal gaps for Islamic finance under the Nigerian legal system. The gaps are inimical to and undermine investor confidence in Nigeria’s Islamic finance industry. The review reveals the necessity of tailor-made Sharīʿah-based regulations in addition to corresponding governance and oversight for a legally safe and Sharīʿah-compliant Islamic finance practice. It brings to light the imperative for mitigating the legal and Sharīʿah non-compliance risks associated with Islamic finance operations as crucial for Islamic finance businesses, Islamic finance institutions and their sustainable development.

Based on content analysis, the review is wholly doctrinal and does not involve empirical data. Legal safety and Sharīʿah compliance are not to be compromised in Islamic finance operations. The review would assist relevant regulators and investors in Islamic financial enterprises to understand and determine the impact and potential ramifications of legal safety and Sharīʿah non-compliance on Islamic Finance Institutions.

This study provides an insight into the dimensions and ramifications of legal and Sharīʿah non-compliance risks of Nigeria’s Islamic finance industry. This study is premised on the imperative for research studies whose outcome would inform regulations that strike a balance between establishing Islamic financial institution/business and ensuring legal certainty and Sharīʿah compliance of their operations. This study paves way for this kind of research studies.

The findings and discussions provide a guide for regulators and researchers on the identification and mitigation of legal and Sharīʿah non-compliance risks in Islamic finance via a literature review. This study, the first of its kind in Nigeria, advances the idea that research into legal and Sharīʿah non-compliance risks of Islamic financial entities is key to mitigating the risks and fostering the entities and their businesses.