The Impact of Fintech-Based Crowd funding on Small and Medium Enterprises (SMEs) in Islamic Economies

Fintech revolution in the financial services industry has significantly changed the way SME financing works, mainly for the Islamic countries where Shariah compliance is compulsory. This is a research on the influence of fintech-based crowdfunding on SMEs within the Islamic finance industry to demonstrate if indeed it is a better bet than conventional banking. The study uses both primary and secondary methods, involving 200 SMEs from Malaysia, Indonesia, Saudi Arabia and UAE based on survey and focus group discussion, collected data is also supplemented from the fintech platforms and the reports. The analysis shows that FINTECH crowdfunding improves SME funding access, providing an average revenue increase of 15.2 percent and employment increase of 10.4 percent affirming prior studies that has demonstrated the Islamic FINTECH will have ability to spur entrepreneurship (Rashid et al., 2022). But there are: regulations, which received the mean score of 4.3, and Shariah compliance issues, which received the score of 5.5, thus being the main obstacles to SMEs financial stability and, therefore, to their growth. According to prior observational studies, Islamic fintech enables a shariah-compliant method to the interest-based conventional funding, although such funding’s efficiency relies upon the legal consistency, investor trust, and technology advancement. This paper sheds light on the necessity of improving investor protection procedures, the increased transparency regarding the platforms, and the establishment of unified regulations for Islamic fintech crowdfunding. These insights advance knowledge on fintech solutions in Islamic finance and offer practical implications to the stakeholders in the fintech start-ups, regulators, and SMEs that seek to enhance access to financial services in Islamic countries. Further research on the effects of fintech crowdfunding on the sustainability of SMEs and how to address the regulatory and operational challenges affecting Shariah-compliant crowdfunding platforms should be conducted.