Purpose-Islamic banking is a new concept in Germany. Islamic banks in Germany aspire being the hub for Islamic finance in Europe and see their potential in the growing Muslim population. This paper aims to contribute to the limited literature from the target group's perspective, to analyze their perceptions and to test whether the promised potential exists in reality. Methodology-An online survey with questions developed according to the characteristics of awareness, relative advantage,

more »

... ty, uncertainty and promotion was conducted to Muslims living in Germany. Findings-The results show that there is awareness but little knowledge towards Islamic banking and its' concepts due to insufficient communication. The main reason attracting to Islamic banking is religion. In this regard peer groups play an important role. Furthermore, the findings indicate future potential for Islamic banking Germany. Conclusion-In general there is a positive perception towards Islamic banking. Islamic banks have a rich customer portfolio and have the potential to increase their market share in Germany by offering suitable products and providing easy access to these products.