Factors influencing the acceptance of Islamic crowdfunding in Malaysia: A study of youth entrepreneurs

Abstract

Youth entrepreneurs in Malaysia are getting very little financial assistance despite the various funding options available for small and medium enterprises (SMEs). While financial institutions are the main sourceof external finance to SMEs, this financingoption is often not readily accessible to youth entrepreneurs due to the latter's high-risk profile. Islamic crowdfunding, which offers access to financing that conforms to Shari'ah principles, has the potential to significantly change the financing landscape for youth entrepreneurs. To enable this, it is crucial to examine factors influencing an entrepreneur's intention to accept the Islamic crowdfunding as an alternative financing mechanism. This research aims to identify factors influencing the intention to accept Islamic crowdfunding among youth entrepreneurs in Malaysia. The data were collected based on a sample of 260 youth entrepreneurs in Malaysia through adoptedquestionnaires. The data were analysed using the Partial Least Squares-based StructuralEquation Modelling (PLS-SEM). The results revealed that perceived usefulness, perceived ease of use, self-efficacy, Islamic platform, and financial accessibility have positive influences on youth entrepreneurs' intention to accept the Islamic crowdfunding, but it was not the case for social influence. The findings for perceived risk, however, show a positive influence on intention instead of negative influence. Perceived usefulness significantly mediates the relationship between perceived ease of use and intention as suggested by the Technology of Acceptance Model (TAM). The findings of this study will help crowdfunding platform providers and policymakers have a better understanding of Islamic crowdfunding acceptance by youth entrepreneurs thus enhancing the growth of the crowdfunding sector in Malaysia.