Effects Of Islamic Financial Products On The Profitability Of Selected Women Entrepreneurs In Nigeria

Despite the growing importance of Islamic finance and women's entrepreneurship in developing economies, there is limited empirical evidence on how Sharia-compliant financial products impact the profitability of women-led businesses. This research addresses this gap by employing a Tobit regression analysis on data collected from 357 women entrepreneurs across five Nigerian states. The findings reveal a significant positive relationship between the utilization of Islamic banking products and business profitability. Women entrepreneurs who engage with a wider range of Islamic financial products demonstrated higher profits. Specific products such as Takaful, Ijarah, Murabahah, and Musharakah showed strong positive impacts on profitability, underscoring the potential of these Sharia-compliant instruments in supporting business growth and risk management for women entrepreneurs. Interestingly, the study found that patronizing multiple Islamic banks was negatively associated with profitability, suggesting that women entrepreneurs might benefit more from concentrating their banking activities with a single Islamic financial institution. The study found a strong positive correlation between engagement with Islamic financial products and business success, suggesting sustained access to Islamic finance could be crucial. It also highlighted geographical variations and its recommends the need for regulatory body diversify Sharia-compliant financial products for women entrepreneurs, aligning with their religious beliefs. Government agencies should promote financial literacy, strengthen banking relationships, and support women-led businesses through collaboration with Islamic banks and ongoing research for increased economic participation and women's empowerment.