The general aim of the research was to evaluate the challenges faced by Islamic banks in Kenya. The main features of the Islamic Banking:
i. Profit and loss sharing (Musharakah). The Islamic Bank pools investor’s money and assumes a share of losses on a mutual agreed ratio. the profit and losses.
ii.Shared Risk between the parties involved in any financial transaction are shared by both financial institutions and depositors saves on a mutual ratio.
iii.Prohibition of Usury, exploitation gains made in trade or business this include interest.
iv.Prohibition of Gharar. The word Gharar means uncertainty, hazard or risk, Gharar can arise when the claim of ownership is unclear or suspicious. For example, of Gharar in modern finance include futures and options contracts which have dates of delivery in the future.
v.Prohibition of Gambling or speculation behaviors.
vi. No involvement in prohibited industries such as Gambling, alcoholic beverages, pornography and others that are haram
vii.Payment of Zakat (a compulsory charity on wealth and earnings to be distributed to the less fortunate), Waqf (an endowment made by a Muslim to a religious educational or charitable cause) and Sadaqah (voluntarily giving to charity).
