Harnessing Islamic Crowdfunding to Advance the Self-Publishing Industry in Malaysia

The potential of Islamic crowdfunding to encourage the development of Islamic fintech globally, even in countries with non-Muslim majority populations, needs to be examined in a literature study on this issue. More extensive research is needed regarding the factors that most reliably predict the success of Islamic crowdfunding, such as compliance with Islamic crowdfunding laws, sustainability, and the potential of Islamic finance. This article describes a comprehensive and systematic Literature Review (SLR) regarding papers published in the field of Islamic crowdfunding. This research aims to contribute to a better understanding of Islamic crowdfunding, provide useful information for practitioners, and stimulate further research in the field to increase the success of Islamic crowdfunding. We conducted a review of selected papers to identify gaps and significant issues in Islamic crowdfunding, providing guidance for future researchers. This article review was based on 704 articles retrieved using the keyword "Islamic crowdfunding" from the Scopus database between 2013 and 2022. To minimize bias, we formulated 5 research questions to guide our analysis: RQ1: How do publication and citation rates vary annually? RQ2: How can we determine the most influential studies based on citation counts for each keyword? RQ3: What are the most common subject areas addressed in Islamic crowdfunding literature from 2013 to 2022? RQ4: What are the most frequently used keywords in Scopus documents? RQ5: How are Islamic values discussed in articles related to Islamic crowdfunding? The findings of this research demonstrate that Islamic crowdfunding, characterized by interdisciplinary scholarship, has emerged as an increasingly significant alternative for aiding society and the economy. It contributes to poverty alleviation and the development of specific sectors through channels such as crowdfunding for small and medium enterprises and social projects tailored to meet the diverse needs of Muslims. However, the challenge facing the future development of Sharia crowdfunding is that, despite its benefit of increasing community participation in projects aligned with religious values, it also carries the potential risk of investment losses and non-compliance with Sharia principles. Ways to address the current scarcity of Sharia fintech are also needed, ensuring its broader acceptance across all societal levels, and enhancing Muslims' understanding of compliance with Islamic religious rules, particularly Fiqh law. Urgently needed are specific fiqh regulatory guidelines to ensure that Sharia-compliant crowdfunding adheres to Islamic principles. Government support, particularly through legislation in countries where the majority of the population is Muslim, is crucial to enhance public participation and trust in Sharia crowdfunding.

PurposeThis paper aims to explore the potential application of mudharabah (silent partnership) as an investment instrument through an Islamic crowdfunding platform.Design/methodology/approachThis is a qualitative study in which semi-structured interviews were carried out with several experts regarding the application of mudharabah in Islamic crowdfunding. To achieve the purpose of this study, the data is analysed based on thematic analysis.FindingsThe findings reveal that even though Islamic crowdfunding could be an efficient platform through financial technology (Fintech), mudharabah is not an entirely ideal instrument, particularly for equity-based Islamic crowdfunding because of its high risk. These include fraudulent projects, insufficient regulations to protect investors’ money and the structure of mudharabah itself in which it is in the form of profit-sharing contract. However, the risk can be mitigated by using Fintech as a way to closely monitor the project, enhancing regulatory aspects to protect investment funds, enhancing mudharabah practice and creating awareness among all involving parties in terms of mudharabah philosophy.Research limitations/implicationsThis study is limited because it focuses on the current practice of Islamic crowdfunding in Malaysia, given that it is still a new industry. Currently, there is only one Islamic registered equity crowdfunding platform. Also, as the number of interviewees in this study is limited because of purposive sampling, the findings may be considered the result of an exploratory study.Practical implicationsAn equity Islamic crowdfunding platform based on mudharabah can be proposed, particularly to support micro enterprises in which they involve small capital. Also, this model can be considered for less risky ventures such as investment in food industries or technology sectors.Social implicationsMudharabah Islamic crowdfunding model could potentially support local businesses, especially for start-ups. By channelling money among society, it is not only creating a wealth circulation among society, which is one of the Sharīʿah objectives in finance, but it also promotes mutual cooperation and kindness among society members.Originality/valueWhile Islamic crowdfunding is not a new topic in research, it lacks empirical studies, particularly qualitative analysis. As this study engages with experts in Sharīʿah and crowdfunding regarding the potential application of mudharabah, it highlights a fresh discussion both in theory and practice.

Crowd-funding is an innovative concept. The online nature and the usually small size of investments of crowd-funding makes it different from private placement or other similar activities. Crowd-funding is still infant industry but growing fast, including Islamic crowd-funding. Islamic crowd-funding is the platform designed to comply with the sharia. Considering as the most populous Muslim in the world, the third largest democracy, and the biggest Muslim nation in the world, with favorable demographics and transition to a middle-income country, Indonesia will mean eventually become the biggest market for Islamic finance. Hence, the coming era of Islamic crowd-funding in Indonesia is also underway. However, there is still lack of awareness and understanding about Islamic crowd-funding including its prospects and challenges. There is also no specific regulation on Islamic crowd-funding yet. In near future, regulation must also be put in place for crowd-funding. Regulator needs to create frameworks that provide sufficient structure and protections while allowing enough space for an orderly and robust market to grow. It is incumbent on Indonesia to ensure the groundwork in its place. Otoritas Jasa Keuangan (OJK) has shown resolve and determination to ensure the requisite infrastructure and regulations needed. Sharia and crowd-funding have similar goal and philosophical foundation. Our paper suggests that crowd-funding and Islamic finance are inherently compatible and mutually reinforcing. Islamic crowd-funding may also help Islamic finance to play more important roles with more significant market share in the Indonesian economy. Our paper also describes possible anticipated regulations for crowd-funding in Indonesia.

<p>Islamic crowdfunding is a crowdfunding platform designed to comply with Islamic principles, a collective effort to collect/raise funds to fund projects (including startups), provide financing for personal or business, and other needs through an internet platform following Islamic principles. As a country with the largest Muslim population globally, Indonesia sees this as an excellent opportunity to support its economic development. In this regard, the purpose of this article is to find out how the Islamic Crowdfunding opportunity is an alternative solution to Islamic funding in support of the Indonesian Islamic Economic Masterplan (MEKSI). Based on data from the Ministry of Finance (Kemenkeu) through the 5th Annual Islamic Finance Conference (AIFC), Islamic Fintech assets in Indonesia grew to reach 134 billion rupiahs in June 2021, representing 3 percent of total fintech assets in Indonesia. From this data, it can be interpreted that the opportunity for Islamic Crowdfunding, which is one of the products of Islamic Fintech as alternative funding, is still very wide open. Using SWOT analysis, we find in this paper that Islamic Crowdfunding could be an alternative to Islamic funding in Indonesia. Therefore, it is expected that the government and related agencies, especially the Financial Services Authority (OJK), can take the right steps in managing Islamic crowdfunding. It is also expected that Muslims can participate in campaigning or supporting the Indonesian Islamic Economic Masterplan (MEKSI) through Islamic Crowdfunding.</p>

Background The potential of Islamic crowdfunding to encourage the development of Islamic fintech globally, even in countries with non-Muslim majority populations, needs to be examined in a literature study on this issue. More extensive research is needed regarding the factors that most reliably predict the success of Islamic crowdfunding, such as compliance with Islamic crowdfunding laws, sustainability, and the potential of Islamic finance. This article describes a comprehensive and systematic Literature Review (SLR) regarding papers published in the field of Islamic crowdfunding. This research aims to contribute to a better understanding of Islamic crowdfunding, provide useful information for practitioners, and stimulate further research in the field to increase the success of Islamic crowdfunding. Methods We conducted a review of selected papers to identify gaps and significant issues in Islamic crowdfunding, providing guidance for future researchers. This article review was based on 704 articles retrieved using the keyword “Islamic crowdfunding” from the Scopus database between 2013 and 2022. To minimize bias, we formulated 5 research questions to guide our analysis: RQ1: How do publication and citation rates vary annually? RQ2: How can we determine the most influential studies based on citation counts for each keyword? RQ3: What are the most common subject areas addressed in Islamic crowdfunding literature from 2013 to 2022? RQ4: What are the most frequently used keywords in Scopus documents? RQ5: How are Islamic values discussed in articles related to Islamic crowdfunding? Results The findings of this research demonstrate that Islamic crowdfunding, characterized by interdisciplinary scholarship, has emerged as an increasingly significant alternative for aiding society and the economy. It contributes to poverty alleviation and the development of specific sectors through channels such as crowdfunding for small and medium enterprises and social projects tailored to meet the diverse needs of Muslims. However, the challenge facing the future development of Sharia crowdfunding is that, despite its benefit of increasing community participation in projects aligned with religious values, it also carries the potential risk of investment losses and non-compliance with Sharia principles. Ways to address the current scarcity of Sharia fintech are also needed, ensuring its broader acceptance across all societal levels, and enhancing Muslims’ understanding of compliance with Islamic religious rules, particularly Fiqh law. Conclusion Urgently needed are specific fiqh regulatory guidelines to ensure that Sharia-compliant crowdfunding adheres to Islamic principles. Government support, particularly through legislation in countries where the majority of the population is Muslim, is crucial to enhance public participation and trust in Sharia crowdfunding.

Investment decisions in Islamic Crowdfunding have many determinants, including: project quality, creator abilities, social network creators, reputation and entrepreneur experiences. This study examines the influence of significant and insignificant determinants of investment in Islamic Crowdfunding. It uses a random sampling technique with Structural Equation Modeling Partial Least Square (PLS) as the analysis model. The results show that social creators and entrepreneur experiences have a significant effect on investment in Islamic Crowdfunding. Contrastingly, project quality, creator ability, and reputation have insignificant influences. Entrepreneur experiences and reputation of the platform have dominant and least influence on investment in Islamic crowdfunding, respectively. Creator’s ability has a dominant-negative effect on Islamic Crowdfunding, and therefore, it requires special attention. The sharia values contained in all investment determinants are the primary consideration by investors. Therefore, increasingly inevitable sharia compliance is a necessity from time to time.

Islamic Crowdfunding: Principles, Practices, and Impact on Business Management

The COVID-19 pandemic has triggered one of the worst jobs crises by causing the rise in unemployment, loss of income and businesses. Islamic social finance mechanism should address the massive socio-economic challenges caused by the COVID-19 pandemic. In addition, Islamic social finance instruments also should assist those affected by the pandemic. Among the instruments to achieve this objective are zakat, waqf, and Islamic crowdfunding, which have been adopted and applied in Malaysia. This study aims at examining the role of Islamic social finance instruments, specifically zakat, waqf, and Islamic crowdfunding, in assisting those affected by the COVID-19 pandemic. This study employs library research and interviews to collect data to achieve research objective. The findings reveal that Islamic social finance institutions in Malaysia have used the instruments, especially zakat, waqf, and Islamic crowdfunding to assist those affected to recover from the crisis. The proposed solutions include: save lives, including medical assistance and health care using zakat, waqf, and Islamic crowdfunding. In addition, the Islamic social finance instruments could save households who have lost their jobs and struggle to survive by creating mechanisms to assist them to survive during this crisis by utilizing zakat, waqf, and Islamic crowdfunding. By understanding the role of zakat, waqf, and Islamic crowdfunding, this study could significantly contribute to a broader understanding of the Islamic social finance instruments. This study could shed some lights on how Islamic social finance institutions could plan, strategize and implement suitable measures in the future to assist those affected by the pandemic.

The aim of this study is to explore the determinants of start-ups’ intentions to adopt Islamic crowdfunding models in Mogadishu, Somalia. This study employs a cross-sectional survey and gathers quantitative data from a sample of 384 start-up owners and managers in Mogadishu. The results revealed that perceived usefulness and ease of use are the two most prominent determinants affecting the intention to adopt Islamic crowdfunding. Despite being positively related, awareness of Islamic crowdfunding did not significantly influence the adoption of Islamic crowdfunding. Social influence has a negative significant impact on Islamic crowdfunding adoption in Mogadishu. The implication of this study emphasizes that, despite the perceived benefits of Islamic crowdfunding, adverse social perceptions and cultural bias may inhibit its adoption. It uniquely contributes to the literature on Islamic crowdfunding adoption among start-ups in Somalia, a context rarely explored, by utilizing both the technology acceptance model and unified theory of acceptance and use of technology to discover technological and sociocultural determinants.

PurposeThe purpose of this study is to analyse potential models of Islamic crowdfunding as an alternative financing option for micro-entrepreneurs in Malaysia. While crowdfunding has gained traction as an alternative funding source for businesses, it is unclear how far this concept can benefit a group of micro-entrepreneurs in Malaysia.Design/methodology/approachThis study uses a qualitative research approach by using data collected through semi-structured interviews with several experts and practitioners in crowdfunding, Shariah and entrepreneurship. Prior to discussing the facets of the findings, the data were analysed based on a thematic approach.FindingsThe findings reveal that while previous works of related literature suggest crowdfunding as a viable alternative financing option for entrepreneurs and their businesses, in reality, its practical implementation presents challenges. Numerous micro-entrepreneurs need more training in the areas of management and marketing. Such concerns raise questions about their ability to attract potential project backers. With the proper selection of Shariah contracts and several approaches to risk management, Islamic crowdfunding can potentially become an alternative funding source for microbusinesses.Research limitations/implicationsGiven the exploratory nature of this study regarding the applicability of Islamic crowdfunding as an alternative fund for micro-entrepreneurs, its findings may not fully encompass Malaysia’s context because of the limited number of participants involved.Practical implicationsThe findings of this study offer guidelines on how to implement Islamic crowdfunding for micro-entrepreneurs. Consequently, Islamic crowdfunding has the potential to alleviate the government’s burden of providing funds for micro-enterprises and enhance their skills and mentality to be more independent, creative and able to promote their products.Social implicationsWhile Islamic crowdfunding can be an alternative opportunity for business enterprises and community-based projects, it promotes the spirit of cooperation and collaboration within society.Originality/valueAlthough Islamic crowdfunding is a topic that has been discussed previously, empirical investigations in this area remain scarce, mainly through qualitative approaches. Distinguishing from prior literature, this study analyses several potential models of Islamic crowdfunding from the perspectives of experts, practitioners and related agencies for micro-entrepreneurs. Moreover, this study bridges insights from related literature so that they offer practical applications to support micro-entrepreneurs in Malaysia.

Small and Medium Enterprises (SMEs) is taking role as the backbone for sustained economic growth, particularly in developing countries. However, SMEs might not easily get the financing from the banking institution due to the lack of financial history and collateral. Islamic crowdfunding has become a solution to deliver accessible financial services to the unbanked SMEs in the countries, especially in Indonesia. Islamic crowdfunding impacts the SMEs in regard to the ease of obtaining capital access, improving the welfare of SMEs, and creating growth for the national economy in the long-term. By using literature review, this study aims to show how the Islamic crowdfunding develops and how it affects the SMEs in Indonesia. The result shows that Islamic crowdfunding potentially benefits the SMEs in capital access, improving the welfare and economic growth.

The emergence of financial technology, known as fintech, has altered the landscape of traditional financial institutions. Broadly defined, fintech is the application of technology in finance. Conventional and Islamic crowdfunding platforms are fintech innovations that offer a great alternative to traditional financial lenders like banks. This paper aims to provide insights regarding crowdfunding as an alternative fundraising source for entrepreneurs, especially start-ups, who usually face financial challenges. This paper uses a deskresearch methodology to review the extant literature on crowdfunding as an entrepreneur's funding source. Findings show that crowdfunding adoption is rapidly increasing and is embraced by many underserved entrepreneurs. As a promising alternative, it offers excellent potential by providing services at a lower transaction cost and greater efficiency. It also covers a broader market penetration. Islamic crowdfunding benefits even more, as the nature of Islamic financing helps to curb excessive credit expansion, thus helpingto stabilise the economy. The application and importance of Islamic crowdfunding are in line with the three classes of Maqasid-Shariah, which are darūrāt (necessities), ḥājīyāt (needs), and taḥsīnīyāt (luxuries). Nevertheless, crowdfunding is not without problems and challenges. Major problems usually arise from regulatory and fraud issues, such as stolen ideas and lack of proper regulations. This paper may help create awareness about crowdfunding, its potential, and its challenges to entrepreneurs. The findings may alsoserve as reference points for future researchers to examine further the issues and challenges in the crowdfunding industry, especially Islamic crowdfunding, in promoting competency and sustainability for entrepreneurs' interests.

This research aims to measure public sentiment related to Islamic crowdfunding on the Twitter social media platform. The research method involves the extraction and classification of tweet data using a Python Library called VADER (Valence Aware Dictionary and Sentiment Reasoner). The research utilized tweet data posted in the past one year. The results showed fluctuations and decreases in the number of tweets discussing Islamic crowdfunding. Word cloud analysis on keywords shows that in positive sentiments, words such as "crowdfunding platform," "crowdfunding impact," "crowdfunding," "Islamic finance," and "inclusivity Islamic finance" dominate the visualization. Overall, the majority of tweets expressed a positive attitude towards Islamic crowdfunding, with 44.0% positive sentiment. A total of 47.2% of tweets showed neutral sentiment, while 8.7% showed negative sentiment. These results illustrate that people generally give positive support to the concept of Islamic crowdfunding, although there is still a small proportion of tweets that express less favorable views. This research provides valuable insights into people's perceptions and responses to Islamic crowdfunding in cyberspace.

Islamic crowdfunding has emerged as a recent phenomenon in many Muslim countries, including Malaysia, Indonesia, and Pakistan. It affords entrepreneurs with a Shariah-based option of raising funds for their business. Although Bangladesh has a few crowdfunding platforms, their activities are limited. Despite being a predominantly Muslim country, Bangladesh has yet to establish a significant crowdfunding platform. However, several earlier studies have indicated that Islamic crowdfunding has substantial growth potential in Bangladesh. Therefore, this study aimed to explore the potential of Islamic crowdfunding as an alternative funding source for entrepreneurs in Bangladesh. A qualitative approach was employed, gathering data through semi-structured interviews with experts and consultants in Islamic Shariah and entrepreneurship in the crowdfunding industry. The data was then analyzed by means of a thematic technique. The study reveals that Islamic crowdfunding has significant potential in Bangladesh but faces numerous challenges. Overcoming these challenges could make lending (asset-based) and reward-based models effective and productive sources of funding for the entrepreneurs. The findings can contribute significantly to the standing literature in the ground of crowdfunding. Officials can use these findings to make innovative policies and rulings for the crowdfunding sector. Entrepreneurs can utilize these insights to boost their knowledge and understanding of crowdfunding functions and processes.

PurposeThis paper aims to explore the viability of applying Qard Hasan as an Islamic crowdfunding financial instrument to finance micro-enterprises in Malaysia.Design/methodology/approachThis is a qualitative study in which semi-structured interviews were conducted with several crowdfunding professionals concerning the application of Qard Hasan in Islamic crowdfunding. To realise the purpose of this study, the data is subjected to thematic analysis.FindingsThe finding reveals that though it is often argued that Qard Hasan is basically not a business-oriented instrument, a closer look at the framework reveals the uniqueness and flexibility of this instrument to be adopted as a viable financial instrument for crowdfunding in financing micro-enterprises in Malaysia. Although it is associated with various risks including default risk and the risk of attracting big funds. However, these risks can be managed and overcome by using FinTech mechanisms such as blockchain to carry out due diligence, monitor the project and ensure the repayment in installment.Research limitations/implicationsThe findings of this study may not be suitable for generalisation to all crowdfunding practices as the semi-structured interview is concentrated predominantly in Malaysia. However, it still provides valuable contributions to the Islamic crowdfunding sector in Malaysia between theory and practice.Practical implicationsThe Qard Hasan crowdfunding framework in this study can potentially be applied to help micro-entrepreneurs reach out to financial services within their means. This framework provides means to grow the micro-enterprise sector.Social implicationsQard Hasan crowdfunding will effectively alleviate poverty by creating an avenue of opportunities for business enterprises and close the gap between the wealthy and the poor classes in society, which will eventually bring about more cooperation, more collaboration and cultivate a generous society.Originality/valueIn spite of the fact that Islamic crowdfunding is not a new topic in research, it lacks empirical studies, particularly qualitative analysis. As this study engages with experts in Shari’ah and crowdfunding regarding the potential application of Qard Hasan, it highlights a fresh discussion both in theory and practice.