CAN ISLAMIC CROWDFUNDING UNLOCK NEW OPPORTUNITIES FOR ISLAMIC BANKING IN MALAYSIA?

Muhammad Shahrul Ifwat Ishak; Abdulmajeed M. R. Aderemi; Nur Syahirah Mohammad Nasir

doi:10.33102/mjsl.vol12no3.725

Authors

Muhammad Shahrul Ifwat Ishak Faculty of Business and Management, Universiti Sultan Zainal Abidin (UniSZA), Terengganu, Malaysia https://orcid.org/0000-0002-9763-5154
Abdulmajeed M. R. Aderemi Head of Research, Islamic Finance Connect, Manchester, United Kingdom https://orcid.org/0000-0002-2176-315X
Nur Syahirah Mohammad Nasir Faculty of General Studies and Advanced Education, Universiti Sultan Zainal Abidin (UniSZA), Terengganu, Malaysia https://orcid.org/0000-0002-8985-3135

DOI:

https://doi.org/10.33102/mjsl.vol12no3.725

Keywords:

Islamic crowdfunding, crowdfunding, digital crowdfunding, Islamic banking, Islamic finance

Abstract

In recent times, digital crowdfunding has become a popular financial platform for funding thanks to financial technology and globalization through the internet. These platforms have become a viable financing alternative for so-called unbankable groups, including micro and semi-medium enterprises (SMEs). It is argued that crowdfunding can become a practical alternative to the role of banks as financial intermediaries. This study therefore analyses the potential prospects of Islamic crowdfunding in Malaysia as a complement to the Islamic banking sector. Through a qualitative design, this study utilises semi-structured interviews with experts and practitioners in the field of Islamic banking and crowdfunding. The data were then analysed thematically. Although the future relationship between Islamic crowdfunding and the Islamic banking sector is not clear, this study argues that Islamic crowdfunding will not be a substitute for the Islamic banking sector, but rather could be a complement to Islamic banks. In this regard, it makes sense to build a strategic partnership and co-operate with each other to provide benefits to both sides. Future research is recommended to further advance the exploration of Islamic crowdfunding, as there is still much to improve and this new industry faces issues and challenges of potential significance. At the same time, both institutions can enter into a strategic partnership and work together to achieve benefits for both sides. Even though the result of this research does not reflect the whole country, it contributes to a better practise of both Islamic crowdfunding and Islamic banking.

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