Financial Literacy as a Mediator of Young Generation Intention to Invest in Islamic Crowdfunding in Malaysia

Abstract

Islamic crowdfunding, which is a legitimate and halal form of financing, is also increasing in popularity among Malaysian youths because Malaysia has established a very strong infrastructure in the Islamic finance sector. Nevertheless, it has remained low primarily because of low Financial Literacy, awareness, and trust in the digital platform of investing. This research seeks to determine how financial literacy influences the TPB of young Malaysians in its ability to influence the intention of young Malaysians to fund an Islamic crowdfunding platform. A quantitative approach was used, specifically a cross-sectional survey design, with 437 youths from Malaysia’s Klang Valley region. The Partial Least Squares Structural Equation Modeling (PLS-SEM) technique was used to analyze the data. Findings indicated that perceived subjective norms and perceived behavioral control jointly affected intentions to invest and were partially explained by financial literacy. However, there was no main effect of attitude on the dependent variable, although it was inclusively mediated by financial literacy. Implications reveal significant implications for promoting investment intention and heightening financial literacy as a way of reversing barriers to participation that characterize Islamic crowdfunding. Such findings provide significant suggestions to the policymakers and educators, alongside the platform provides for enhancing the ethical Malaysian financial solutions and economic improvement. Thus, this research contributes to knowledge by discussing the moderating role of financial literacy on the TPB constructs in the Islamic crowdfunding context.