Awareness and perception towards Islamic Crowdfunding as a financing mechanism among start-ups

Start-up companies have difficulties in accessing finance from the financial institutions due to lack of collateral, lack of credit history and high-interest rate. Islamic crowdfunding is one of the alternative financing that can be considered to increase the financing options available. In considering Islamic crowdfunding, it is important for entrepreneurs to have awareness and knowledge on the existence of this alternative financing. This study was conducted to examine the level of awareness and perceptions of start-up companies in Malaysia towards Islamic crowdfunding. In addition, the study also aims to identify the relevant models that entrepreneurs of startup companies would like to engage. Data is analysed using descriptive and Structural Equation Model, (SEM). This study was carried out by using primary data, a survey questionnaire was distributed to 396 start-up companies in Malaysia. The results indicate that most respondents show low level awareness of Islamic Crowdfunding as an alternative financing mechanism. However, based on perception results, most respondents have a positive perception in considering Islamic crowdfunding to finance their business. These results suggest that there is a need and opportunity to raise awareness among start-up companies by authorised government-related body