Crowdfunding Framework in Islamic Finance

Abstract

Crowdfunding has been a topic in limelight for the last few years. Crowdfunding platforms are the intermediaries which connect the contributors with fundraisers. Crowdfunding has started its journey in traditional finance however; its attributes and characteristics are much alike with Islamic financing. While the same concept will be applied to Islamic finance, there must be a proper framework which will guide the Islamic crowdfunding platforms to raise funds for Shari'ah complaint projects as per Islamic laws and regulations. This chapter provides different outlooks of crowdfunding and illustrates how different Islamic finance instruments and products can be used in Crowdfunding. The chapter provides framework for process of crowdfunding campaigns which will be complaint with Shari'ah regulation under the supervision of the Shari'ah body. At the end of chapter, two crowdfunding platforms are discussed which does not claim to be Shari'ah complaint but can be roadmap for Islamic crowdfunding platforms.