Developing a Shariah Governance Framework for Crowdfunding Platforms in Malaysia

Abstract

Abstract

The rapid growth of crowdfunding platforms in Malaysia has created new opportunities for alternative financing while raising concerns about Shariah compliance. Unlike Islamic banking and takaful, which operate under well-established Shariah governance frameworks issued by Bank Negara Malaysia (BNM), Islamic crowdfunding platforms lack a standardized governance model. This study aims to develop a conceptual Shariah governance framework tailored for crowdfunding platforms in Malaysia. Adopting a qualitative research design, the study employs document analysis of existing regulatory guidelines, including the Securities Commission Malaysia’s (SC) Recognized Market Guidelines, the Shariah Governance Policy Document (SGPD) by BNM, and relevant academic literature sourced from indexed journals. The findings highlight five essential components of a Shariah governance framework: (i) legal and regulatory compliance, (ii) Shariah supervisory oversight, (iii) financial management and risk control, (iv) technological integration to enhance transparency, and (v) stakeholder engagement through education and trust-building measures. The proposed framework emphasizes the establishment of a Shariah Supervisory Board (SSB), standardized Shariah contracts such as mudarabah and musyarakah, and the adoption of fintech solutions, including blockchain, to ensure transparency and accountability. This study contributes to bridging the governance gap in Islamic crowdfunding by providing a structured framework that can guide platform operators, regulators, and policymakers. The findings also offer practical implications for enhancing public trust and investor confidence in Malaysia’s Islamic fintech ecosystem.

Keywords: Shariah governance, crowdfunding, Islamic fintech, mudarabah, Malaysia.