Islamic banks financing of FinTech start-ups in Oman: An exploratory study

Abstract

This study mainly aims to explore the current practice and prospects of FinTech start-ups financing in Oman, particularly the IFIs (Islamic Financial Institutions) financing practices and the challenges faced by these start-ups in obtaining it. The study applies qualitative methods in procedures of in-depth interviews with eight Islamic banks’ managers in Oman. The findings revealed that the financing of the FinTech start-ups in Oman still in the infant stage and below its potential. This might be due to the general lack of interest in this area by the Omani start-up businesses. This situation might be due to the lack of clear strategic vision of Omani financial institutions, including both Islamic and conventional financial institutions with regards the Fintech start-ups. The findings also showed that the start-ups in Oman prefer long term financial schemes, while the Islamic financial institutions (IFIs) generally prefer to offer short term financing on Musharakah and Ijarah contracts. Lastly, the findings showed that the IFIs are positive regarding the prospects of growth and success of FinTech in Oman. It is noteworthy that this is one of the early studies that addresses the FinTech start-ups financing from an Islamic perspective, and hence places the ground for the future studies to be conducted in this area.

The Impact of Financial Technology on Banking Performance: A study on Foreign Banks in UAE

“…In this area, the use of Internet banking, credit cards and alternative payment systems is reasonably popular, but studies indicated that 85% of consumers in Middle East still prefer to pay through cash on delivery (Gai, Qiu & Sun, 2018). The Central Banks ensures to encourage emerging companies and entrepreneurs to innovate and introduce modern financial technologies to serve the consumer while ensuring the security of his or her personal information and money (Echchabi, Omar, Ayedh & Sibanda, 2021). Is to encourage innovative financial solutions while maintaining the security and confidentiality of the information of users or customers.…”