Islamic Crowdfunding Model for Entrepreneurship Development in Developing Countries: The Goals, Opportunities and Challenges

ABSTRACT : Islamic crowdfunding is a fund-raising strategy from the crowd via the social networking websites or internet for entrepreneurship development in line with Islamic principles to finance shariah compliant core business, product or project. Although, it remains new in Islamic financial system, also scanty and sketches in literatures as alternatives sources of finance for entrepreneurs. It seems unpopular and insignificant in developing countries like Nigeria despite large number of Muslim individuals. In addition, knowledge of the concept is lacking among entrepreneurs, academicians, financial experts, and the general public. This calls for better understanding of the goals, models, opportunities, risk elements, and challenges for its implementation and usage by entrepreneurs. Based on this, the study examined Islamic crowdfunding model for entrepreneurship development in developing countries with focus on Nigeria. The study employed an exploratory research design with focus on relevant literatures on Islamic finance, crowdfunding, financial technology, entrepreneurship, and accounting. The study concluded that Islamic crowdfunding will deepen financial market, grow entrepreneurship, support charitable and philanthropy activities, enhances business ideas reality and growth, improve job creation, contributes to nation’s sustainable development, and promote religious brand that aligns with tenet of Islam and value. The study recommends that trust is critical for its success while there is need for the government to provide operational guidelines and regulatory framework. Furthermore, public awareness, efficient and effective internet service, and establishment of shariah board will support the strategy and the interaction between fundraisers and funders.