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Purpose The purpose of this study is to investigate and discuss the viability of Islamic crowdfunding (ICF) as an alternative form of financing small and medium enterprises (SMEs) in the Middle Eastern and Islamic business environment. This study raised essential questions: what is the perception of ICF in the Middle East? Does the Middle East region really need an Islamic crowdfunding model to support SMEs? Is it possible to create a crowdfunding platform complaint with Sharia? What are the requirements for developing an Islamic crowdfunding model? Design/methodology/approach The methodology followed to answer these questions is a qualitative research design depends on in-depth interviews, literature review, historical analysis and critical discussion. Data analysis was conducted using NVivo to analyze 25 in-depth interviews with Islamic scholars, Sharia board members and Islamic finance experts from different Middle East countries such as Saudi Arabia, Kuwait, Egypt, Iraq, UAE and Bahrain. In addition, more than 115 transcriptions, memos and research articles were used. Findings The study provides a new Islamic Sharīʿah-compliant crowdfunding model as the main outcome of this study. In addition, the content analysis revealed four main themes to be the essential pillars to develop the ICF model. These provisions of Islamic Sharia are: Project Idea (Halal) (28.5%), Funding Goal (36%), Return and Risk (14%) and Funding Commitments (21.5%). The findings also revealed that the four types of crowdfunding (reward-based crowdfunding, donation-based crowdfunding, loan-based crowdfunding and equity-based crowdfunding) are legal and supported by evidence from Quran and Sunnah. Originality/value Despite the critical development in Islamic finance and the expanding number of young Muslims slanting digital Islamic services, empirical studies exploring this issue in the Middle East is still inadequate. Further, ICF has increased attention and there is an urgent need for financing new SMEs in the Middle East.
Abdeldayem et al. (Mon,) studied this question.