What drives prospective investors to support small and medium enterprises via Islamic securities crowdfunding? An empirical evidence from Indonesia

Purpose - The presence of securities crowdfunding (SCF) FinTech in the Islamic financial landscape opens investment opportunities through shares and sukuk (Sharia bond) instruments. This study aims to examine the effect of investment risk (IR), legal risk (LR), product knowledge (PK), Sharia compliance (SC) and subjective norm (SN) on investment decisions in businesses and projects run by small and medium enterprises (SMEs). Design/methodology/approach - The questionnaires were distributed to prospective investors with prior knowledge of SCF and Islamic investment. The data collected was then examined using partial least square-structural equation modeling using SmartPLS 4.0. Findings - The results show that LR has positive and significant implications for supporting investment through SCF, while IR has the opposite. The main findings in this study explain that PK and SC are proven to strengthen the intention to invest in SCF. Meanwhile, SN, which also strengthens intention, is the greatest influence. Therefore, it is highly recommended that SCF organizers collaborate with regulators (OJK), universities, academics and the investor community, as well as Muslim entrepreneurs, to provide education and literacy regarding SCF products and the underlying contracts, along with the consequences and uniqueness of investment vis SCF. Practical implications - From a managerial side, Sharia expert educators can be appointed to increase investors' literacy and confidence to support SMEs' business expansion via SCF. In addition, to minimize investment risk, SCF organizers are also advised to issue sukuk and shares in different low-risk businesses/sectors, followed by investment amounts that are more affordable for novice investors. Originality/value - Research on SCF as an alternative to SME financing is still scarce. To the best of the author's knowledge, this is the first research to empirically test the relationship between risk, SC, PK and SN on potential investors' decisions to support SMEs through the SCF mechanism.