The role of blockchain technology in enhancing Islamic social finance: the case of Zakah management in Malaysia

Abstract

PurposeThis study aims to explore the perceptions of zakah institutions and the intention of society towards the application of blockchain technology in zakah management.Design/methodology/approachThe nature of this study is qualitative, attempting to indulge into the contribution of Fintech in Islamic social finance. This study uses a mixed-method to gauge the perception of stakeholders. For the quantitative approach, a survey was carried out focussing on zakah receiver and zakah payer. The data then was analysed based on the technology acceptance model. While interview survey with multiple stakeholders (zakah institutions, JAWHAR and university) was conducted to gauge the perception of zakah institutions in using blockchain technology.FindingsThe findings of this study provide a positive view for zakah institutions to embrace the usage of blockchain in its management, however, there are several concern that needs to be addressed.Practical implicationsThis study provides new insights to the body of knowledge especially in the zakah management system and Fintech. Besides, from a managerial aspect, this study contributes to the new practices that could be implemented in zakah institutions.Social implicationsMany people lose jobs and income due to the economic turmoil and COVID-19 pandemic, which makes zakah an important Islamic social finance tool to assist in socio-economic development. It is high time for zakah institutions to implement blockchain especially during this pandemic crisis that requires a more contactless approach to ensure health and safety.Originality/valueThis study is important to encourage Islamic social finance institutions to embrace blockchain technology in providing an efficient service to the development of social and economic.