ADOPTING QARD AL-HASAN AND MUDARABAH CROWDFUNDING FOR MICRO ENTERPRISE

Abstract

This paper aims to explore the viability of Qard al-Hasan and Mudarabah as crowdfunding instruments to support microenterprise. It is learned that microenterprise have experienced challenges in terms of funding their project as well as to expend their operations, due to strict procedures from traditional financial institutions. Also, the current practices of crowdfunding are not fully Shari’ah compliant, thus alternative is needed. However, the study utilizes secondary data with descriptive and comparative approaches. The findings indicate that both models could be an alternative Shari’ah financing for entrepreneurs. While Qard al-Hasan can focus on business start-up, Mudarabah can play more significant in expending the current business to be more competitive. Though both models are associating with several risks including risk of non-payment, risk of miss-management, and inflation risk, these risks can be mitigated through proper reviewing of the proposal by crowdfunding platforms before the campaign is launched as well as closely monitoring the project.