Sharia crowdfunding in Indonesia: a regulatory environment perspective

Purpose: This study aims to understand the practices and rules of Sharia crowdfunding policies in Indonesia given the rapid growth of financial technology and the increasing importance of crowdfunding as a funding alternative for micro, small, and medium enterprises (MSMEs). Design/methodology/approach: This study used qualitative methods, exploratory methods and literature studies for data collection. The focus is on understanding the regulatory environment and institutional framework that support Sharia crowdfunding in Indonesia. Findings: Despite a specific law regulating Sharia crowdfunding, several authoritative institutions in Indonesia offer FinTech, crowdfunding and Sharia crowdfunding services. Some regulations have been issued, such as Bank Indonesia Regulation Number 19/12/PBI/2017 and Financial Services Authority (OJK) Regulation Number 37/POJK.04/2018, which was later amended to Number 57/POJK.04/2020. This study emphasizes the crucial role of OJK in providing security guarantees for implementing FinTech, including crowdfunding. At the same time, Sharia crowdfunding also follows fatwas issued by DSN-MUI. Research limitations/implications: This study describes Sharia crowdfunding policies in Indonesia and indicates that further research could delve deeper into specific cases and examine the impact of these policies on the growth and sustainability of Sharia crowdfunding. Practical implications: This study underlines the need to enhance Sharia crowdfunding standards and to create rules that explicitly address this issue. This has implications for regulatory authorities, FinTech companies and MSMEs seeking to leverage Sharia crowdfunding. Social implications: This study suggests potential social implications, including a more inclusive financial system that complies with Islamic principles and supports MSMEs' growth. Originality/value: This study is unique in its focus on Sharia crowdfunding policies in Indonesia, providing a comprehensive view of the regulatory landscape and existing institutional framework.