Enablers and Constraints in the Growth of Islamic Crowdfunding and Peer-to-Peer Financing: Insights from Malaysian FinTech Providers

Ismail, Shahifol Arbi and Shafie, Rohami and Purnamasari, Pupung and Pramono, Irena Paramita and Haryatiningsih, Ria (2025) Enablers and Constraints in the Growth of Islamic Crowdfunding and Peer-to-Peer Financing: Insights from Malaysian FinTech Providers. World Journal of Advanced Research and Reviews, 27 (2). pp. 982-988. ISSN 2581-9615

This study examines the enablers and constraints influencing the growth of Islamic crowdfunding and peer-to-peer (P2P) financing from the perspective of Malaysian FinTech providers. Islamic crowdfunding and P2P platforms have emerged as innovative financing mechanisms that align with Shariah principles, offering alternative capital-raising avenues for small and medium-sized enterprises (SMEs) and individual entrepreneurs. Drawing on qualitative data from in-depth interviews with selected Islamic FinTech firms, the research identifies key drivers of adoption, including technological readiness, niche market opportunities, Shariah-compliant innovation, and supportive regulatory initiatives such as the Securities Commission Malaysia’s regulatory sandbox. The findings also reveal several operational and structural challenges, including regulatory complexity, limited market awareness, liquidity management issues, and high compliance costs. The study contributes to the literature by providing a supply-side understanding of the Islamic alternative financing ecosystem, highlighting how FinTech providers navigate the dual demands of technological innovation and Shariah compliance. Practical implications include the need for more targeted government support, improved public awareness campaigns, and strategic collaborations between FinTech firms, Islamic banks, and regulatory bodies. By focusing on the perspectives of platform operators rather than end users, this research offers nuanced insights into the operational realities of Islamic crowdfunding and P2P financing, thus informing policymakers, regulators, and industry stakeholders on strategies to enhance the scalability and sustainability of this sector. The findings underscore that sustainable growth requires balancing regulatory oversight with innovation incentives to position Malaysia as a global leader in Islamic FinTech.