ISLAMIC BANKING SYSTEM LOANS (QARD HASSAN) OF AMAL BANK BOSASO AND ECONOMIC GROWTH IN SOMALIA; A CROSS-SECTIONAL STUDY.

Background This study aims to establish the relationship between Islamic Banking System loans (Qard Hassan) of Amal Bank Bosaso and the economic growth of Somalia.  Methodology This study adopted a correlation research design based on a quantitative research approach. Quantitative research involves the generation of data in quantitative form, which can be subjected to rigorous quantitative analysis formally and rigidly. The study population was composed of Islamic Banking System service providers in this case Amal Bank, Bosaso, and the Islamic Banking System service beneficiaries (Poor or low-income earners) living in Bosaso officials. The target population is 96 respondents and among these are 25 Amal Bank, Bosaso employees, and 71 Customers / Islamic banking system beneficiaries (poor and low-income earners).   Results Findings on the relationship between Islamic Banking System loans (Qard Hassan) revealed that there is a strong positive significant relationship between Islamic Banking System loans (Qard Hassan) of Amal Bank Bosaso and the economic growth of Somalia since (r=.951, p<0.05). This is indicated by Pearson Correlation co-efficient of 0.979 and significance of 0.000 which rejects the hypothesis and thus shows that there is a strong positive significant relationship between Islamic Banking System loans (Qard Hassan) of Amal Bank Bosaso and the economic growth of Somalia.   Conclusion The role of Islamic banking systems, with an emphasis on the effect of the Islamic banking system on economic growth, has been discussed. They showed how banking system systems can affect economic growth.  Recommendations The study recommends that bankers should promote these products intensively via advertising and effective marketing strategies to increase the market share. The service quality of Islamic banking is an important factor driving bank customers.