Fajr Capital Advisors and Crowdfund Capital Advisors have today launched a report (see below) to highlight crowdfund investing as a powerful new tool to fuel the development of a vibrant entrepreneurial culture in Muslim majority markets.
The two firms have combined their expertise to explore the potential of crowdfund investing in Muslim markets and its strong synergies with Islamic finance. According to Aamir A Rehman, Managing Director at Fajr Capital Advisors and co-author of the report, “Crowdfund investing is both timely and authentic. Timely because it helps address the need for entrepreneurial finance in key Muslim markets. Authentic because it encourages risk-sharing, channels savings to real economic activity, and enhances financial participation—core principles at the heart of Islamic finance.”
The report’s authors identify Malaysia, UAE, Lebanon and Egypt as early movers in this space based on the recent establishment of crowdfund investing platforms in these markets. Jason Best, Principal at Crowdfund Capital Advisors and a co-author of the report adds, “These are still early days for crowdfund investing. Large economies with high social media penetration such as Saudi Arabia, Turkey and Indonesia may have the most to gain from this opportunity. We hope policy makers, regulators and investors will take note of this opportunity and consider this new asset class to enhance current efforts to train and support entrepreneurs in their markets.”
The report outlines an effective action plan for governments interested in facilitating crowdfund investing in their domestic markets, which includes:
- Assessing gaps in current job creation and entrepreneurship programmes;
- Creating an enabling regulatory environment;
- Co-developing platforms alongside the private sector;
- Capacity building for crowdfunding, investors and entrepreneurs; and
- Integrating crowdfunding with existing initiatives and projects.
Fajr Capital Advisors and Crowdfund Capital Advisors have initiated discussions with select policy makers, academics and practitioners to build on this research. Commenting on the work, Daud Vicary Abdullah, President of INCEIF (International Centre for Education in Islamic Finance), said: “There is no doubt that crowdfund investing is on the move in Muslim majority markets. This paper both presents a realistic assessment of the market opportunities and describes practical steps that can be taken to develop its full potential.”
Crowdfunding is attracting global interest as a simple but transformative concept. Someone proposes a business, charitable or creative project on a crowdfunding website. If convinced, tens, hundreds or even thousands of individuals commit relatively small amounts of capital to support the idea or business. Taken together, these contributions are significant enough to turn the idea into a commercial reality.