ADOPTION AND NON-ADOPTION OF ISLAMIC CROWDFUNDING AND PEER-TO-PEER FINANCING AMONG MALAYSIAN SMES: DRIVERS, BARRIERS AND PERCEPTIONS

Shahifol Arbi Ismail; Rohami Shafie; Agoos Munalis Tahir

Authors

Shahifol Arbi Ismail Tunku Puteri Intan Safinaz School of Accountancy (UUM-TISSA), Universiti Utara Malaysia, Sintok, Kedah, Malaysia
Rohami Shafie Tunku Puteri Intan Safinaz School of Accountancy (UUM-TISSA), Universiti Utara Malaysia, Sintok, Kedah, Malaysia
Agoos Munalis Tahir Faculty of Economics and Muamalat, Universiti Sains Islam Malaysia, Nilai, Negeri Sembilan, Malaysia

Keywords:

Financial Technology (FinTech), Small and Medium-Sized Enterprises (SMEs), Islamic crowdfunding, Peer-to-Peer (P2P) financing, FinTech Adoption

Abstract

This study examines the role of Islamic financial technology (FinTech), particularly crowdfunding and peer-to-peer (P2P) financing, in addressing the financing needs of small and medium enterprises (SMEs) in Malaysia. SMEs represent the backbone of the Malaysian economy but continue to face persistent challenges in accessing conventional financing due to stringent collateral requirements, high costs, and bureaucratic barriers. Islamic FinTech offers an alternative that combines technological efficiency with Shariah-compliant financing models. Using a qualitative research design, data was collected through semi-structured interviews with SMEs, FinTech providers, and regulatory stakeholders to explore adoption drivers, barriers, and perceptions. Findings reveal that adoption is primarily driven by the accessibility of capital, faster disbursement processes, and strong alignment with Islamic principles, which fosters trust among Muslim entrepreneurs. However, barriers such as limited awareness, risk perception, and a preference for conventional financial institutions hinder broader acceptance. Non-adopters emphasized concerns regarding platform credibility, regulatory clarity, and potential operational risks. The study highlights significant differences between adopter and non-adopter SMEs in terms of financing experience, trust levels, and perceived usefulness. From a theoretical perspective, the research contributes to understanding FinTech adoption through the integration of technology adoption theories and religious congruence frameworks. Practically, the findings provide insights for policymakers, regulators, and FinTech providers on strategies to enhance market penetration, including targeted outreach programs, trust-building initiatives, and collaborative partnerships with conventional institutions. Overall, the study underscores the potential of Islamic FinTech to promote financial inclusion, strengthen SME competitiveness, and contribute to Malaysia’s broader economic development agenda.

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