Home » New report cites potential for crowdfund investing in muslim markets

New report cites potential for crowdfund investing in muslim markets

  • Fajr Capital Advisors and Crowdfund Capital Advisors launch “Crowdfund Investing in Muslim Markets: An Action Plan for Governments”
  • Authors identify Malaysia, UAE, Lebanon, Egypt, Saudi Arabia, Turkey and Indonesia as key opportunity markets

CCA Paper Muslim MarketsDubai, United Arab Emirates | 11 November, 2013 – Fajr Capital Advisors and Crowdfund Capital Advisors have today launched a report to highlight crowdfund investing as a powerful new tool to fuel the development of a vibrant entrepreneurial culture in Muslim majority markets.

The two firms have combined their expertise to explore the potential of crowdfund investing in Muslim markets and its strong synergies with Islamic finance. According to Aamir A Rehman (@Aamir_Rehman), Managing Director at Fajr Capital Advisors and co-author of the report, “Crowdfund investing is both timely and authentic. Timely because it helps address the need for entrepreneurial finance in key Muslim markets. Authentic because it encourages risk-sharing, channels savings to real economic activity, and enhances financial participation—core principles at the heart of Islamic finance.”

The report’s authors identify Malaysia, UAE, Lebanon and Egypt as early movers in this space based on the recent establishment of crowdfund investing platforms in these markets. Jason Best (@CrowdCapAdvisor), Principal at Crowdfund Capital Advisors and a co-author of the report adds, “These are still early days for crowdfund investing. Large economies with high social media penetration such as Saudi Arabia, Turkey and Indonesia may have the most to gain from this opportunity. We hope policy makers, regulators and investors will take note of this opportunity and consider this new asset class to enhance current efforts to train and support entrepreneurs in their markets.”

The report outlines an effective action plan for governments interested in facilitating crowdfund investing in their domestic markets, which includes:

  • Assessing gaps in current job creation and entrepreneurship programmes;
  • Creating an enabling regulatory environment;
  • Co-developing platforms alongside the private sector;
  • Capacity building for crowdfunding, investors and entrepreneurs; and
  • Integrating crowdfunding with existing initiatives and projects.

 

Fajr Capital Advisors and Crowdfund Capital Advisors have initiated discussions with select policy makers, academics and practitioners to build on this research. Commenting on the work, Daud Vicary Abdullah, President of INCIEF (International Centre for Education in Islamic Finance), said: “There is no doubt that crowdfund investing is on the move in Muslim majority markets. This paper both presents a realistic assessment of the market opportunities and describes practical steps that can be taken to develop its full potential.”

Crowdfunding is attracting global interest as a simple but transformative concept. Someone proposes a business, charitable or creative project on a crowdfunding website. If convinced, tens, hundreds or even thousands of individuals commit relatively small amounts of capital to support the idea or business. Taken together, these contributions are significant enough to turn the idea into a commercial reality.

Crowdfund investing is the newest and potentially most powerful model for crowdfunding: instead of donating or lending money, investors receive an equity share in the business.

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Self Assessment Tool – Is Your Country Ready for Crowdfunding?
 
Assessment ToolThis is a high-level self-assessment tool that can provide help in assessing a country’s readiness for crowdfunding.  This is one possible tool to gauge cultural perception from individuals regarding key factors identified as important in the applicability of crowdfunding within a culture or country.  This tool is currently in its validation phase and will be updated as more data becomes available.  While individuals can complete the self-assessment to gauge their own perceptions, it is suggested that more than 20 market participants/actors including policy makters, NGOs, investors, and entrepreneurs complete the self-assessment to gain a wider range of option.  The report is free of charge.  More detailed information about how individual countries rank can be acquired by contacting sherwood@theccagroup.com.  Click on the image to the left to take the self-assessment now.
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