FAIRNESS AND DISPUTE AVOIDANCE IN ISLAMIC BANK FINANCING

The purpose of this paper is to examine whether and how fairness influences dispute avoidance in Islamic bank financing process. The approach used is exploratory qualitative research, based on semi-structured interview. Data were gathered from small scale entrepreneurs operating an account with Islamic bank, which previously used or are using Islamic financing products in northern Nigeria. The findings from participants show that; fairness has tremendous influence on customers' perception of disagreements and disputes, as fair treatment leads to dispute avoidance. Fair treatment in determining prices and terms during negotiations, as well as transparency, determines action of Jaiz Islamic bank as fair or not fair. It is recommended that; due to customers' high expectation for farness from Islamic bank, a little misunderstanding may lead to disagreement that leads to conflict. Islamic bankers therefore, should be innovative in conflict management through fairness in all customer related issues. The study contributes to literature of fairness, as making fair treatment a fundamental issue in conflict avoidance process. Particularly in northern Nigeria, where fairness is based on perception.