Waqf-Based Crowdfunding: Proposed Framework for Entrepreneurial Development

Entrepreneurs are essential to economic development. Since entrepreneurial activity mainly comes from the self-employed and creates job opportunities, it can stimulate the economy in many ways. However, lack of financial support for entrepreneurs threatens their growth. Additionally, Muslim entrepreneurs have their own guiding principles based on al-Quran and al-Hadis. They conduct a business consistent with the moral and ethical standards of Islamic practices, and also account for all-inclusive Islamic goals benefitting society as a whole. Therefore, only financial support that adheres to the morals and terms of Islamic practice will become their preference. The objective of this essay, therefore, is to seek a solution to the Islamic mechanism for entrepreneurial development fundraising by utilizing crowdfunding and waqf as Islamic financial instruments or Shari’ah compliance crowdfunding. This study employs library-based research methodology in order to provide a theoretical foundation for the study. The aim of this approach is to reveal various experts and researchers’ opinions in the field pertaining to the issue at hand and deduces the most acceptable solution to fulfill the objectives of the study. This study proposes a framework of a new hybrid product of Islamic crowdfunding in providing solutions to entrepreneurs. The mechanism features a more secure and Islamic way of online fundraising for entrepreneurship that uses the Qur’an, Sunnah, and Islamic scholars’ opinion as guidance.