Adoption of “Shariah” Compliant Financing-Based Crowdfunding Platform by Smes: A Case Study on Beehive

Authors

  • Wajeeha Ali

Abstract

FinTech (Financial Technology) adoption is increasing globally resulting in customers movement away from traditional banks to fulfil their financial needs. These FinTech companies provide financial products and services using different technologies to cover various financial areas including financing for businesses. For instance, financing-based crowdfunding platforms are one of FinTech examples that has been growing rapidly in last couple of years, making the access to finance easier for SMEs.

Globally, many countries have issued number of regulations and licences for FinTech activities including Shariahcompliant financing-based crowdfunding platforms. These types of platforms shall provide Islamic financing solutions for SMEs that are alternative to Islamic banks financing solutions. However, as a new financial solution, it is expected to face some challenges in term of SMEs’ adoption.

Therefore, this research aims at building a strategic framework for FinTechs that provide Shariahcompliant financing-based crowdfunding platforms to ensure SMEs adoption to their platforms. The initial conceptual framework was built based on different sources of academic literature in addition to Unified Theory of Acceptance and Use of Technology. However, the strategic framework was ascertained through a case study on an existing platform called Beehive as well as semi-structured interviews with five SMEs that are using or used Beehive’s platform.

The results consistently indicated that factors like cost, brand image, speed, customer relations management, perceived ease of use, perceived usefulness, and social influence were found to be affecting the SMEs’ behavioural intention to adopt Shariah complaint financing-based crowdfunding platforms. The valid factors collectively formed a strategic framework for FinTechs to follow in order to ensure the adoption by SMEs to their solution.

Keywords: FinTech, Crowdfunding, SMEs, Islamic Finance, P2P Lending, UTAUT

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Published

2020-01-04

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Articles