Islamic Banking between Establishment and Decline: An Analytical Study of the Challenges Facing Islamic Banks in Benghazi

Abstract

The study attempts to understand and evaluate the reality of Islamic banking in Libya following the trends towards comprehensive Islamic financial systems. This is accomplished through looking into the foundations and ideas of Islamic banking, studying the impact of developing and innovating Islamic banking products on the performance of the banking sector, and highlighting the current issues encountered by Islamic banking in Libya.

The study was prepared based on data collected from financial institutions through field studies of financial institutions - the Islamic financing bank, the commercial bank, the Republic Bank, and the Libyan Islamic Bank in the city of Benghazi - as well as relying on local and international research and reports, and publications issued by the Central Bank of Libya during the period between 2020-2025. Additionally, workshops on the national strategic features of the financial sector in Libya were conducted, all in an attempt to obtain a set of results that contribute to the advancement of Islamic banking in Libya.

The study's results may confirm that Islamic banks may make a substantial contribution to the banking sector as a whole, establishing a sort of cooperative banking transaction based on the idea of profit and loss sharing through various financing and investment forms instead of debt-based systems.