Mudharabah Instrument Via an Integrated Waqf–Equity Crowdfunding Model For Sustainable Blended Financing In Malaysia

This study aims to develop a new model of mudharabah blended financing through integration between waqf fund and equity-based crowdfunding in Malaysia. Since this study is exploratory in nature, it is designed based on qualitative research methodology. The data is based on semi-structured interviews with related experts and practitioners in Shariah, crowdfunding, and State Religious Islamic Councils (SRICs). The findings reveal that mudharabah might be risky as the crowdfunding instrument and waqf-based financing. Nevertheless, both can be integrated as a blended instrument to enhance the efficiency of mudharabah and minimize its risks. Through this model, the waqf fund and investors can join to support potential business projects through an equity-based crowdfunding platform. Through the platform, business owners can convince investors and waqf fund managers about their projects, and their progress can be efficiently monitored to minimize the risk. This study proposes a new working model of mudharabah blended financing through an integration between waqf fund and equity-based crowdfunding. This model can empower entrepreneurs to operate their businesses with greater autonomy, creativity, and accountability as well as contributes to the sustainability of waqf fund. While this study is an exploratory on a potential model from Shariah's perspective, its findings may not be generalized into other aspects. Moreover, this study is limited to Malaysia, which has a unique legal framework on waqf administration. Nevertheless, a new practical model of mudharabah blended financing is proposed through the findings and discussion of this study. This model can be applied with a strategic collaboration between the Security Commission as a regulator for the crowdfunding market and SRICs as the sole authority on waqf in Malaysia.