An Assessment of the Intention to Accept Shariah Compliant Crowdfunding Mode of Financing in Borno State, Nigeria

Abstract

Micro-, small and medium-sized enterprises (MSMEs) face numerous obstacles, such as a lack of funding, which hinder their growth and expansion. They must have access to long-term funding to improve and modernise their operations competitively. This study aims to incorporate Shariah-compliant crowd funding among MSMEs in Borno state of Nigeria. It applies partial least squares structural equation modelling (PLS-SEM) on a sample of 341 MSMEs and recommends the need to educate and enlighten them about the benefits of Islamic crowdfunding. The study also recommends the need to produce guidelines that will help in developing a legal and regulatory framework for the incorporation of crowdfunding into corporate financing structures. Finally, it is recommended that religious leaders at various levels organise educational programmes on the importance of Shariah-compliant crowdfunding.
 

MSMEs and Islamic Securities Crowdfunding: The Importance of Financial Literacy

“…These results are interesting for the SCF industry as a whole, because previous studies regarding motivation to utilize Islamic fintech products and services, such as Majid (2021), Darmansyah et al (2020), Purwantini et al (2020), andNiswah et al (2019), found that ATB had no significant effect on BI. In fact, Majid & Nugraha (2022) tested the intention of potential investors to invest through SCF in Indonesia and found the same result, as did Sulaiman et al (2021) when testing the intention to employ syariah-compliant crowdfunding in Nigeria. However, the results of this study align with and support what was obtained by Aji et al (2020) and Kasri & Chaerunnisa (2020).…”

“…In Nigeria, the intention of SMEs to implement Islamic crowdfunding is investigated by Kazaure, Abdullah, Zawawi, & Hamzah (2021). Furthermore, the intention to use crowdfunding in Bangladesh is carried out by Munim, Shneor, Adewumi, & Shakil (2020); in China by Kang, Gao, Wang, & Zheng (2016) and Wang, Li, Kang, & Zheng (2019); in Malaysia by Wasiuzzaman, Chong, & Ong (2021); in Brunei Darussalam by Wasiuzzaman, Hj Pungut, & Md Don (2021); in Nigeria by Sulaiman, Muhammad, & Abdulaziz (2021); and in Italy by Troise & Tani (2020) in relation with the equity crowdfunding.…”

“…Research conducted by Niswah, Mutmainah, & Legowati (2019) and Kasri & Chaerunnisa (2020) prove that PBC can influence BI regarding intentions to donate online through fintech platforms. In more detail, Sulaiman et al (2021) argue that users in Nigeria have the control to accept syariah-compliant crowdfunding modes.…”

Determinan Niat Menggunakan Crowdfunding Syariah Sebagai Solusi Permodalan Umkm (Studi Kasus Generasi Milenial Di Pulau Jawa)

“…Crowdfunding dalam berbagai bentuk (donasi, penghargaan, hutang dan ekuitas) merupakan model baru pembiayaan untuk kegiatan usaha mikro, kecil dan menengah (UMKM) dalam solusi mengatasi kesenjangan permodalan dan implikasi risiko yang dihadapi oleh lembaga keuangan. Bentuk ekuitas dari Crowdfunding telah mendapatkan momentum sebagai sumber pendanaan alternatif bagi wirausahawan, terutama bagi perusahaan start-up (Sulaiman et al, 2021). Crowdfundingyang sesuai syariah memberikan peluang bagi para donatur dan investor UMKM untuk mencapai pembangunan sosial ekonomi dengan pelarangan segala bentuk transaksi berbasis riba.…”

“…Crowdfundingyang sesuai syariah memberikan peluang bagi para donatur dan investor UMKM untuk mencapai pembangunan sosial ekonomi dengan pelarangan segala bentuk transaksi berbasis riba. Pembiayaan hendaknya berkaitan dengan sektor riil perekonomian dengan memperhatikan prinsip risiko dan bagi hasil (Sulaiman et al, 2021).…”