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Publication date: 3 May 2022

Abdulmajeed Muhammad Raji Aderemi and Muhammad Shahrul Ifwat Ishak

This paper aims to explore the viability of applying Qard Hasan as an Islamic crowdfunding financial instrument to finance micro-enterprises in Malaysia.

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Abstract

Purpose

This paper aims to explore the viability of applying Qard Hasan as an Islamic crowdfunding financial instrument to finance micro-enterprises in Malaysia.

Design/methodology/approach

This 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.

Findings

The 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/implications

The 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 implications

The 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 implications

Qard 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/value

In 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.

Details

Qualitative Research in Financial Markets, vol. 15 no. 1
Type: Research Article
ISSN: 1755-4179

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Article
Publication date: 2 June 2021

Muhammad Shahrul Ifwat Ishak, Muhammad Huzaifah Kamaruddin and Abdulmajeed Muhammad Raji Aderemi

This paper aims to explore the applicability of mudharabah (partnership) based crowdfunding as an alternative fund to support the book publishing industry, particularly for…

886

Abstract

Purpose

This paper aims to explore the applicability of mudharabah (partnership) based crowdfunding as an alternative fund to support the book publishing industry, particularly for self-publishers and small publishers.

Design/methodology/approach

This is an exploratory qualitative study whereby the data are obtained from library research and empirical studies. As for empirical data, it is sourced from semi-structured interviews with three types of groups: the book industry, the crowdfunding platform and Shari’ah experts.

Findings

The study found that mudharabah crowdfunding could overcome the book publishing industry’s financial problems. However, this requires special requirements for applicants (writers or publishers) to avoid fraudulent cases, as well as committed management in running the platform and a substantial crowd of loyal funders to maintain the platform. Simultaneously, even though mudharabah is a risky instrument, the risk can be mitigated by closely monitoring the progress of the project. As a result, this study proposes a special framework for mudharabah based crowdfunding to fund self-publishers and small publishers in Malaysia.

Research limitations/implications

This is an exploratory study, in which its findings may not be generalised due to the limited number of participants.

Practical implications

A special model for mudharabah based crowdfunding can be established through an online platform to support book publishing in Malaysia.

Social implications

As this mudharabah crowdfunding model has the potential to support the book industry financially, it could also nurture talented young writers while also preserving knowledge.

Originality/value

This study highlights a fresh and in-depth discussion both in theory and practice in proposing a special Islamic crowdfunding framework based on mudharabah as an alternative fund for the book industry, particularly to support self- and small publishers.

Details

Journal of Islamic Marketing, vol. 13 no. 9
Type: Research Article
ISSN: 1759-0833

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