CFP-A.1.3
Crowdfunding generally involves the raising of funds usually through an online portal or other electronic media from a large number of people who make relatively small financial contributions to the fund raising. The CBB recognises both conventional and sharia complaint crowdfunding business models. The
1. Financing-based crowdfunding: people or businesses (lenders) lend money to businesses (borrowers) hosted on the platform in return for interest/profit and repayment of principal over a pre-specified period.
2. Equity-based crowdfunding: businesses (issuers) raise capital through issuance of ordinary shares, or other equity instruments like preferred shares, and people or business (investors) invest in these instruments in return for dividends, capital appreciation etc.
Added: April 2022