Today, there is an increased need for ethical and socially responsible investment opportunities due to the enhanced globalization process. It is therefore for this reason that the usage of financial models such as Islamic crowdfunding which adhere to Shariah complied models has been noted to be an exciting development. Being a Jordanian Business Leader with interests in ethical finance, Dr. Raed EL Omari concur that Islamic crowdfunding is the social innovation in today’s social investment.
WHAT IS ISLAMIC CROWDFUNDING?
Islamic crowdfunding can be defined as the model which strongly supports the operative methodology of Islamic finance. Unlike the general concept of crowdfunding which may include interest based loans or profit sharing which is prohibited under the Islamic law, Islamic crowdfunding is built on risk sharing and asset based funding. This guarantees that all the transactions to be completed are of high ethical standards and in any way don’t compromise the principle of fairness and social justice.
There are two known types of crowdfunding namely the donation-based and the investment-based. Donation based crowdfunding enables people to give to good causes with the expectation of receiving nothing in return while investment based crowdfunding provides the investors with a chance of getting back their investment through profit making models.
ISLAMIC CROWDFUNDING ETHICAL APPEAL
Without any doubt, one of the most alluring features of the Islamic crowdfunding is the focus on ethical financing. Given the fact that, in many cases, the desire for financial gain seems to be the primary driving force, it is important to be able to invest in projects that are consistent with the investor’s ethic and faith. This ethical foundation fits well the new generation investors who are more environmentally conscious and will avoid projects with negative impact on the environment and the society.
With my experience being in Jordan, Islamic crowdfunding gives people and groups an opportunity to fund projects that will benefit the society such as renewable energy, education, health, and shelter through affordable housing. In this way, it not only becomes a source of profit making but is also constructive in the overall welfare of the society.
UNEARTHING THE ROLE OF TECHNOLOGY IN ISLAMIC CROWDFUNDING
Technology has been a major push factor in the expansion of Islamic crowdfunding. It has never been easier for investors to find and connect with projects that align with their personal ethical compass. Sometimes the opportunities are abundant and people can sit in the comfort of their homes and offices and browse different opportunities, estimate the possible risks and choose values that gage which opportunities to take and which one to let go.
These aspects have made the investing environment more open and less rigid, where people with little capital can invest in otherwise inaccessible projects. I believe this is a very encouraging process towards financing with an emphasis for everyone including those some individuals in this community to be able to support some noble causes.
ISLAMIC CROWDFUNDING: FUTURE PROSPECTS
Indeed, the future of Islamic crowdfunding appears quite bright as the number of specific platforms providing ethically viable solutions is expected to grow steadily. With increasing attention to sustainable finance around the globe, I expect Islamic crowdfunding to expand further and serve as a sound and ethical mode of funding for investors.
Global Islamic crowdfunding will continue to thrive because it aligns investors with the capacity to make a difference in the world with their beliefs and values as investors in Jordan.
CONCLUSION
Islamic crowdfunding is not only revolutionizing investment processes but also imposing ethics, transparency and committing social responsibilities. Being a Jordanian Business Leader, I hope that the idea of Islamic crowdfunding will help make a positive change towards a stronger economy and a better world. This strategy, therefore, provides an avenue to make investments that will not only yield profits but will also benefit society.
Visit my https://drraedelomari.com/ for any queries or insights. As a Jordanian business expert, I am here to help you navigate the complexities of the business world. Contact me today, and let’s work together to achieve sustainable growth in different industries.
