The Role of Perceived Benefits in Formation of Intention to Use Islamic Crowdfunding Platform Among Small and Medium Enterprises in Malaysia

Abstract

Crowdfunding has become a global phenomenon due to its possible role in providing equity funding to small and medium enterprises. Numerous benefits of crowdfunding have been identified. This paper investigated whether three factors - economic benefit, convenience and transaction process are important in influencing the perceived benefits of Islamic crowdfunding platforms and whether perceived benefits affect small and medium enterprises’ (SMEs) intention to use the platform. Self-administered questionnaires and structured online surveys were distributed to SMEs in Selangor, Malaysia using the purposive sampling technique. SmartPLS was used to analyze the data. This paper found that economic benefit has a positive and significant relationship with perceived benefits, and the transaction process has a negative and significant relationship with perceived benefits, while convenience was found to have an insignificant relationship with perceived benefits. This paper also found that perceived benefits were found to have a significant relationship with intention. The significance and contribution of this paper were also discussed.

The influence of potential outcome on entrepreneurs' decisions to participate in Crowdfunding in Pakistan (Karachi)

“…Perceived economic benefit was formed to have a positive or significant relationship with the entrepreneur's Intention to use a crowdfunding platform, meaning that more entrepreneurs perceived that crowdfunding platforms offer a low capital cost or transaction cost as compared to conventional financing, and hence perceived that using the crowdfunding platform would have economic benefits. However, this result is also persistent and predictable in another research by (Husin et al, (2019). Perceived convenience benefits were formed to have an insignificant relationship with the entrepreneur's Intention to use a crowdfunding platform.…”

“…In recent years, these technologies have exploded in popularity to unprecedented levels. One of the most promising developments in financial technology, Crowdfunding has quickly become a preferred method by which small and medium-sized businesses (SMEs) can raise capital (Husin, Haron, & Aziz, 2019). Crowdfunding is a new technology that permits innovative processes to raise funds for an innovative idea, product or attractive business model.…”

“…This supplementary information might be a reason behind boosting the eagerness to finance a new project and lowering the capital cost (Matthias, 2015). As stated by a researcher, the construct "intension to use crowdfunding" has been used to forecast the actual usage behavior of a person toward the adoption of crowdfunding platforms or new technologies (Husin, Haron, & Aziz, 2019). The Technology Acceptance Model has widely supported the Attitudes and behavioral intentions toward the usage of online environments (Zafar, D., et al, 2022).…”

“…Miao, M., et al (2021) positively correlated online platforms' economic and perceived benefits. Consequently, the more entrepreneurs consider the economic benefits of using investment account platforms, the higher their perceived benefits will be (Husin, Haron, & Aziz, 2019). Many researchers have identified economic benefits as the most common and reliable factor for adopting financial technologies that depress transactions and capital costs compared to old-style financial services, thus helping customers better .…”

“…Traditionally, entrepreneurs used to exhibit their ideas to a limited pool of well-off individuals or institutions, and those few funding players typic ally include banks, venture capital firms and angel investors. However, this traditional concept of financing is being modernized to develop more un-traditional financing avenues advancing technological platforms such as Crowdfunding (Husin, Haron, & Aziz, 2019). The advances in information technology (IT) have led/driven the expeditious development and enlargement of new and innovative financial services.…”