Blockchain Proposal for Productive Zakat to Boost the Performance of SMEs in Buraimi, Sultanate of Oman: An Exploratory Study

Fintech is not only applied in the banking industry, but also in zakat institutions. Many Islamic countries, including Oman and other Gulf Cooperation Council (GCC) countries, have digitalized their Islamic finance industry, including Islamic institutions such as zakat and waqaf. Nowadays, zakat can also be used to finance small and medium-sized enterprises (SMEs), a process known as productive zakat. This study proposes a blockchain to finance SMEs in Buraimi, Oman, through productive zakat. Such enterprises play an important role in the Omani economy. Their performance has well developed notably in recent years. However, the contribution of the SME sector to the national economy of Oman remains lower than that of other sectors, particularly oil and gas. This indicates that many improvements are needed to enhance SME performance in the country, including in Buraimi. SMEs face many challenges and obstacles in Oman, one of which is financing. Even though the Omani government has supported the financial sector for SMEs, further financing is needed to boost SME performance, particularly in Buraimi. The proposal for a blockchain through productive zakat is expected to be an effective solution for overcoming the financing issues faced by SMEs in Buraimi. It is also expected to become one of the tools used by the Omani government to provide more financing for SMEs in Buraimi, particularly unbanked ones.