Exploring the Potential of Islamic Crowdfunding as an Alternative Financing Source for Entrepreneurs in Bangladesh

Biplob Hossain, Gazi Md. Shakhawat Hossain, Sagar Kumar and Rabin Mridha
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Biplob Hossain: Department of Business Administration, Faculty of Business and Economics, University of Global Village (UGV), Barishal, Bangladesh.
Gazi Md. Shakhawat Hossain: Department of Business Administration, School of Management, Huazhong University of Science and Technology (HUST), Wuhan, China.
Sagar Kumar: Department of Management Studies, Faculty of Business Studies, University of Barishal, Barishal, Bangladesh.
Rabin Mridha: Department of Management Studies, Faculty of Business Studies, University of Barishal, Barishal, Bangladesh.

International Journal of Science and Business, 2024, vol. 41, issue 1, 56-68

Abstract: Islamic crowdfunding has emerged as a recent phenomenon in many Muslim countries, including Malaysia, Indonesia, and Pakistan. It affords entrepreneurs with a Shariah-based option of raising funds for their business. Although Bangladesh has a few crowdfunding platforms, their activities are limited. Despite being a predominantly Muslim country, Bangladesh has yet to establish a significant crowdfunding platform. However, several earlier studies have indicated that Islamic crowdfunding has substantial growth potential in Bangladesh. Therefore, this study aimed to explore the potential of Islamic crowdfunding as an alternative funding source for entrepreneurs in Bangladesh. A qualitative approach was employed, gathering data through semi-structured interviews with experts and consultants in Islamic Shariah and entrepreneurship in the crowdfunding industry. The data was then analyzed by means of a thematic technique. The study reveals that Islamic crowdfunding has significant potential in Bangladesh but faces numerous challenges. Overcoming these challenges could make lending (asset-based) and reward-based models effective and productive sources of funding for the entrepreneurs. The findings can contribute significantly to the standing literature in the ground of crowdfunding. Officials can use these findings to make innovative policies and rulings for the crowdfunding sector. Entrepreneurs can utilize these insights to boost their knowledge and understanding of crowdfunding functions and processes.

Keywords: Entrepreneur; Finance; Islamic crowdfunding; Challenges; asset-based model; reward-based model (search for similar items in EconPapers)
Date: 2024
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