Shariaventure capital as financing alternative of Muslim entrepreneurs

Ah. Fathonih, Grisna Anggadwita and Sadudin Ibraimi

Journal of Enterprising Communities: People and Places in the Global Economy, 2019, vol. 13, issue 3, 333-352

Abstract: Purpose - Muslim entrepreneurs face various obstacles when starting their business, especially in gaining access to financing. Some financing practices have someShariaviolations, so this paper tries to explore the opportunities and challenges of one financing alternative for Muslim entrepreneurship development in Indonesia that fully complies withShariaprinciples. This paper aims to further understand the concept of venture capital and how it relates to Islamic teachings, and the paper ends with the suggestion for future research direction. Design/methodology/approach - This study uses qualitative methods with descriptive and exploratory analysis. A case study approach using semi-structured in-depth interviews with several key informants were conducted to identify the opportunities and challenges for Muslim entrepreneurs in gaining access to Islamic financing. Various literary syntheses are also provided to better understand alternative financing for business development of Muslim entrepreneurs. Findings - Muslim entrepreneurship, depending on their goals and needs in obtaining financing, uses different models in the process of agreements with capital-funding institutions based onShariaprinciples.Shariaventure capital is one alternative financing that gives freedom for Muslim entrepreneurs to develop their business based on the Islamic system, without thinking about the requirements that must be met in obtaining access to the financing. However, it seems that this scheme still has relatively low interest, especially from Muslim entrepreneurs because they do not know the information and procedures ofShariaventure capital. Practical implications - Some policy implications include increasing capital fromShariaventure capital institutions, the role of the government in providing adequate policy support and incentives and broader socialization and education about the existence and importance of developingShariaventure capital. Practical implications include useful information for Muslim entrepreneurs to address financing issues in their entrepreneurial activities and suggest insights for future research. Originality/value - This study provides the link of financial access for Muslim entrepreneurs toShariaventure capital as a new financing business innovation. Thus, it contributes to the literature onShariaventure capital and Muslim entrepreneurship. The authors also propose some useful recommendations for further research in this field.

Keywords: Business value; Business development; Muslim entrepreneurs; Financing alternative; Sharia venture capital (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jecpps:jec-11-2018-0090

DOI: 10.1108/JEC-11-2018-0090

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