The Examination of Shariah Compliance of Equity Crowdfunding Companies in Indonesia

Abstract

When the economic crisis hit the world from 1997 to 1998, it automatically worsened the economic conditions in Indonesia, only the Small and Medium Enterprises (SMEs) were able to remain strong in the midst of the crisis. This phenomenon points out that SMEs are productive businesses to be developed to support macro- and microeconomic development in Indonesia and influence other sectors to develop. This experience has made many parties aware to give a larger portion to micro, small, and medium-scale businesses. Small and Medium Enter prises (SMEs) are the backbone of the national economy. According to data from Kemenkopukm (2018), the total of SMEs reached 64,194,057 in Indonesia and was able to absorb 120,598,138 workers. SMEs have a very important role in the national economic system because they have a function to accelerate the equitable distribu tion of economic growth as a whole by providing employment and business as well as increasing foreign exchange earnings and strengthening the structure of the national industry. Small and Medium Enterprises (SMEs) are faced with various problems. The issues and constraints faced include aspects of business management capabilities, the quality of human resources, and aspects of capital (Supriyanto, 2012). One of the huge problems is the issue of capital for SMEs to develop their businesses. The matter of capital for SMEs is a very important problem to be solved. Modern banking cannot meet the capital for SMEs, because it is not bankable to decide loans. Accordingly, many SMEs have difficulty developing their business. Along with the development of financial technology in Indonesia, the financial sector has experienced significant development. as a form of application of infor mation technology in the financial sector, currently, fintech is able to serve electronic money, virtual accounts, crowdfunding, and other online financial transactions. As for the fintech that has been operating, some have been founded by conventional or Shariah-based companies, but not a few are start-up companies.