Crowdfunding Models And Methodology For Crowdfunding

841 Words Feb 24th, 2016 4 Pages
The [American] borrower and lender have embraced the above crowdfunding models and methodology as evident by the numbers; 2014 crowdfunding totals nearly $9.5B in America [over $16.2 globally], with business and entrepreneurship claiming 65% and social causes at 32%. Total figures for 2015 are estimated to be over $34B increasing at a steady compound annual growth rate [CAGR] of over 130%.

The pairing of Islamic Finance and crowdfunding could quite possibly evolve the current American Islamic mortgage product from that whose emphasis is almost solely focused on interest aversion into a product that embraces Islamic fundamentals. Such an Islamic finance vehicle, consistent with the sharing economy methodology, would conform with ALL
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An additional attribute of the short-term model was that the borrower typically had to come up with a sizable down payment, which was indicative of lower default rates.
Remove all traces of ambiguity and deception. Current bank financing agreement can be in excess of ten pages. As a result, banks have capitalized on the opportunity to bury details and practices that are deceptive and illegal, e.g., Countrywide’s Option ARM.
Not necessarily competitive. Competitive products pose an interesting dilemma; How can you compete with a product that incorporates forbidden Islamic elements? More importantly, should you attempt to compete with such a product? Consumers who are in search of more money to borrow will base their product choice on ease of access and amount of funds. As a result, Muslims have obtained conventional financing ‘against their will.’ When presented with an Islamic option, not all consumer would opt for it due to the ease of access of the conventional. The current driving factor behind product development has shifted towards capitalization of market share in lieu of the development of an organic Islamic product. The result of the market share increase comes at the expense of regressing toward the conventional counterpart, as noted in the prior section. Correspondingly, the detrimental effects of the conventional products ensue.

Notwithstanding the hindrances of changing an industry fully entrenched in the

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