Omani SME perceptions towards Islamic financing systems

Yasmeen Al Balushi, Stuart Locke, Zakaria Boulanouar

Research output: Contribution to journalArticlepeer-review

10 Citations (Scopus)


Purpose: This paper aims to investigate small and medium enterprises’ (SMEs) owner–managers’ awareness, willingness and perceptions concerning Islamic financing instruments as an alternative sourcing decision in SMEs’ businesses. Design/methodology/approach: The research employed mixed methods to gather data. A questionnaire survey was conducted via face-to-face interviews with 385 SME owner–managers operating in Muscat, Oman’s capital city, along with face-to-face discussion on Islamic finance with 86 SME owner–managers. Descriptive and thematic analysis were used to analyse the data. Findings: The findings indicate that SME owner–managers are aware of Islamic banking principles and have knowledge of Islamic financial instruments, despite Islamic finance being new to Oman. Interestingly, although the majority of the participants indicated their intention to adopt this new finance method, they were motivated by special requirements other than finance. Their positive perception of Islamic financing methods could play a significant role in developing the Islamic banking industry. Research limitations/implications: The research is limited in that its data came only from Omani SME owner–managers in Muscat. Future research could investigate wider samples. Secondly, the study’s findings lack generalisability to larger and public enterprises, because only SME owner–managers were surveyed. Practical implications: This study will be important for policy makers concerned about SMEs’ financing, Islamic financial institutions and new entrants into the Islamic banking industry, as it provides empirically evidence of Omanis’ views, and more specifically those of Omani SME owner–managers, on the recent introduction of Islamic finance into the country. The insights this study offers should help them to develop the strategies required to attract SMEs and to construct policies and regulations to improve Oman’s Islamic banking industry. Originality/value: The research is significant, as it is the first study to investigate the awareness, willingness and perceptions of Omani SMEs regarding Islamic banking in Oman. Even though all Omanis are Muslims, Oman was the last of the six-nation Gulf Cooperation Council countries to introduce Islamic finance. Thus, this emerging market provides an important basis from which to extend future research on Islamic finance to other potential Islamic finance markets.

Original languageEnglish
Pages (from-to)369-386
Number of pages18
JournalQualitative Research in Financial Markets
Issue number4
Publication statusPublished - Oct 23 2019
Externally publishedYes


  • Awareness
  • Islamic finance
  • Oman
  • Perception
  • SMEs
  • Willingness

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics


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