The need for Shariah governance framework for Islamic crowdfunding

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The concept of crowdfunding entails the process of financing an idea, a project, a person or a cause through the collection of small amounts of money from a large number of providers. There are four types of crowdfunding namely lending or P2P crowdfunding, donation-based, reward-based and equity-based. Islamic crowdfunding provides an opportunity for investors, donors and entrepreneurs to support the socio-economic development of the micro and small enterprises sector in Islamic countries. In the absence of a proper Shariah governance framework applicable for Islamic crowdfunding, there could be cases in which Shariah non-compliance circumstances could occur, and without the implementation of a proper internal Shariah governance framework, it may not be detected within the service provider. For any country that is planning to establish Islamic Banking and a financial structure, the key objectives which they have to follow are systematic stability, an adequate level of compliance with Shariah rules, and an international acceptance of the Islamic banking operations. Malaysia has an Islamic as well as a conventional banking system, and they share the same governance structure and legal framework. With regards to Islamic crowdfunding, it is imperative to determine a proper Shariah governance framework.
Islamic crowdfunding , Shariah governance framework , Islamic finance
Zubair, Ahmed Aban and Muneeza, Aishath. (2021). The need for Shariah governance framework for Islamic crowdfunding. The Halal Journal (July 2021).
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