Promoting Retail Sukuk Using Blockchain Technology

Access to financial services is just one of the challenges faced by the poor, but if achieved it can help address some of the other development challenges they face. Addressing the challenges to financial inclusion requires innovative approaches. This paper studies two innovative concepts which are retail sukuk and blockchain and explores how they can be used together to promote Islamic finance and financial inclusion. The objective of the paper is to provide an overview of sukuk and how it can address financial inclusion and provide an overview of Blockchain technology. The paper also presents blockchain use cases in the financial sector and Sharia perspective on using the technology. Indonesia experience in retail sukuk is reviewed to understand the required framework and process of issuance. The study also suggests a blockchain platform for retail sukuk subscription. The study concluded that for the presented solution to succeed in addressing financial inclusion, efforts need to be exerted to raise the retail customer financial and technology literacy. Moreover, the blockchain platform proposed has the potential to eliminate intermediaries but with minimum cost reduction.