To read this content please select one of the options below:

Equity-based Islamic crowdfunding in Malaysia: a potential application for mudharabah

Muhammad Shahrul Ifwat Ishak (Faculty of Business and Management, Universiti Sultan Zainal Abidin – Kampus Gong Badak, Kuala Terengganu, Malaysia)
Md. Habibur Rahman (Faculty of Business and Management, Universiti Sultan Zainal Abidin, Kuala Terengganu, Malaysia)

Qualitative Research in Financial Markets

ISSN: 1755-4179

Article publication date: 3 February 2021

Issue publication date: 7 June 2021




This paper aims to explore the potential application of mudharabah (silent partnership) as an investment instrument through an Islamic crowdfunding platform.


This is a qualitative study in which semi-structured interviews were carried out with several experts regarding the application of mudharabah in Islamic crowdfunding. To achieve the purpose of this study, the data is analysed based on thematic analysis.


The findings reveal that even though Islamic crowdfunding could be an efficient platform through financial technology (Fintech), mudharabah is not an entirely ideal instrument, particularly for equity-based Islamic crowdfunding because of its high risk. These include fraudulent projects, insufficient regulations to protect investors’ money and the structure of mudharabah itself in which it is in the form of profit-sharing contract. However, the risk can be mitigated by using Fintech as a way to closely monitor the project, enhancing regulatory aspects to protect investment funds, enhancing mudharabah practice and creating awareness among all involving parties in terms of mudharabah philosophy.

Research limitations/implications

This study is limited because it focuses on the current practice of Islamic crowdfunding in Malaysia, given that it is still a new industry. Currently, there is only one Islamic registered equity crowdfunding platform. Also, as the number of interviewees in this study is limited because of purposive sampling, the findings may be considered the result of an exploratory study.

Practical implications

An equity Islamic crowdfunding platform based on mudharabah can be proposed, particularly to support micro enterprises in which they involve small capital. Also, this model can be considered for less risky ventures such as investment in food industries or technology sectors.

Social implications

Mudharabah Islamic crowdfunding model could potentially support local businesses, especially for start-ups. By channelling money among society, it is not only creating a wealth circulation among society, which is one of the Sharīʿah objectives in finance, but it also promotes mutual cooperation and kindness among society members.


While Islamic crowdfunding is not a new topic in research, it lacks empirical studies, particularly qualitative analysis. As this study engages with experts in Sharīʿah and crowdfunding regarding the potential application of mudharabah, it highlights a fresh discussion both in theory and practice.



This research is fully funded by the Ministry of Higher Education of Malaysia under the Fundamental Research Grant Scheme for Research Acculturation of Early Career Researchers (FRGS-RACER) entitled “Developing ‘FundMyBook’ Model Based on Mudharabah Crowdfunding Platform as a Capital Source for Books Publication”(RACER/1/2019/SS01/UNISZA//3).


Ishak, M.S.I. and Rahman, M.H. (2021), "Equity-based Islamic crowdfunding in Malaysia: a potential application for mudharabah", Qualitative Research in Financial Markets, Vol. 13 No. 2, pp. 183-198.



Emerald Publishing Limited

Copyright © 2021, Emerald Publishing Limited

Related articles