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Islamic Crowd-funding as The Next Financial Innovation in Islamic Finance: Potential and Anticipated Regulation in Indonesia

European Journal of Islamic Finance

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Title Islamic Crowd-funding as The Next Financial Innovation in Islamic Finance: Potential and Anticipated Regulation in Indonesia
 
Creator Achsien, Iggi Haruman
Purnamasari, Dien Lukita
 
Description Crowd-funding is an innovative concept. The online nature and the usually small size of investments of crowd-funding makes it different from private placement or other similar activities. Crowd-funding is still infant industry but growing fast, including Islamic crowd-funding. Islamic crowd-funding is the platform designed to comply with the sharia. Considering as the most populous Muslim in the world, the third largest democracy, and the biggest Muslim nation in the world, with favorable demographics and transition to a middle-income country, Indonesia will mean eventually become the biggest market for Islamic finance. Hence, the coming era of Islamic crowd-funding in Indonesia is also underway. However, there is still lack of awareness and understanding about Islamic crowd-funding including its prospects and challenges. There is also no specific regulation on Islamic crowd-funding yet. In near future, regulation must also be put in place for crowd-funding. Regulator needs to create frameworks that provide sufficient structure and protections while allowing enough space for an orderly and robust market to grow. It is incumbent on Indonesia to ensure the groundwork in its place. Otoritas Jasa Keuangan (OJK) has shown resolve and determination to ensure the requisite infrastructure and regulations needed. Sharia and crowd-funding have similar goal and philosophical foundation. Our paper suggests that crowd-funding and Islamic finance are inherently compatible and mutually reinforcing. Islamic crowd-funding may also help Islamic finance to play more important roles with more significant market share in the Indonesian economy. Our paper also describes possible anticipated regulations for crowd-funding in Indonesia.
 
Publisher European Journal of Islamic Finance
European Journal of Islamic Finance
 
Contributor —
 
Date 2016-07-23
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Format application/pdf
 
Identifier http://www.ojs.unito.it/index.php/EJIF/article/view/1771
10.13135/2421-2172/1771
http://www.ojs.unito.it/index.php/EJIF/article/download/1771/1611
 
Source European Journal of Islamic Finance; No 5 (2016): EJIF - European Journal of Islamic Finance, 5, 2016
European Journal of Islamic Finance; No 5 (2016): EJIF - European Journal of Islamic Finance, 5, 2016
 
Language eng
 
Relation http://www.ojs.unito.it/index.php/EJIF/article/view/1771/1611
 
Rights Copyright (c) 2016 European Journal of Islamic Finance