ISLAMIC SOCIAL FINANCE ECOSYSTEM AND THE ROLE OF CROWDFUNDING: A PROPOSED MODEL

Social finance is a naïve concept in the mainstream of social entrepreneurial and finance literature. Particularly, in Islamic finance environment it could not attract significant attention from the researchers, academicians, and practitioners. Though, some studies have discussed the tools of Islamic social finance, however, the focus on developing a practicable conceptual framework remained least attentive in recent studies. This study aims to fill this gap and attract the attention of all stakeholders to augment the Islamic Social finance theory and provide grounds for practitioners and academicians to implement technological tools to enhance its social impact. This study uses a qualitative library research approach to develop the spectrum of Islamic social finance and identify the issues faced by the key players within the spectrum. Likewise, technological advancement in the form of crowdfunding is exclusively proposed for the Islamic social finance spectrum in order to overcome all related issues and meet the objectives of Shar Ê‘ ah i.e., Maq ÉÎ id al Shar Ê‘ ah which are embedded in its CSR values. This study is envisioned to open the doors of debate for academicians to further enhance the general theory of Islamic


Introduction
In the capitalist economy, mainly, rules are implemented to protect the interests of the rich which results in the rise of income disparity among the masses.The free-market theory has limited its scope to the concept of profit maximization as the primary aspect of human nature.The proponents of this theory consider the profitmaking as the ultimate goal of life, decline the mess created by this system and generally put the blame on market failures.The neoliberal approach captures only a single dimension of human nature i.e., profit-oriented business leaders while ignoring the other perspectives of life such as religiosity, emotion, moral and ethical values, and political and social views 1 .However, Islam categorically rejects profit maximisation in the capitalist sense particularly when the result is super-normal profits.
In Islam, humans are directed to perform multi-dimensional tasks which should be reflected in their character.The values for righteous living that Islam propagates permeate all sectors of human activity.Action in every field of human activity, including economics, finance and others, is spiritual, provided it is in line with the objectives and values of Islam.The primary portion of the objectives of SharÊ'ah (MaqÉÎid al SharÊ'ah) focuses on the preservation of the public good (maÎlaÍah).The concept of maÎlaÍah itself is broad and multi-dimensional which paves the way for a better and useful life for the believers.Therefore, a believer must have a multipurpose nature, specifically, in the context of profit maximisation the focus must be on several factors such as caring for the interests of others, environmental protection, and attaining societal benefits through social investment.Social investment is a broader term which includes human capital, social capital, and financial capital 2 , nevertheless, in this study we focus on the financial perspective.
According to Silvana et.al. (2020), "Investment of capital for social and financial creation has ancient roots 3 .Cooperatives, religious institutions, credit unions and mutual societies have been managing capital for social projects for many years.However, in recent times, new ways of managing finance for achieving positive social impacts have emerged, which have been classified under the term "Social Finance" (SF)." When we talk about social finance, the first thing that comes to our minds is helping the poor through financial means.However, the concept of social finance is broader in its connotation which refers to the investment and financial activities that are deeply rooted with social purpose.Apart from assisting the poor, one needs to look at the social and environmental impact of financial assistance.Grameen Bank is a distinguished example that laid an exemplary foundation by providing solar financing facilities to low-income households.This financing facility not only provided a cheap source of electricity for lower-income class but also helped in reducing the environmental harms 4 .Islamic social finance works on the same parameters besides having complete compliance with the SharÊ'ah rulings.
Despite its importance, Islamic social finance has been paid insignificant attention 5 by scholars, researchers, and practitioners.On the same note, a study clearly highlights the need of research in the field by stating that "many researchers argue that Islamic finance is socially responsible and based on the relationship of moral and ethical principles, however, there are no studies that measure or assess these social components of Islamic finance. 6" This is because of the lack of clarity in defining and structuring Islamic Social Finance activities unlike literature on conventional social finance which has clearly identified the activities and institutions that falls under the umbrella of social finance.Afterward, they were able to develop techniques to measure social impact 7 however Islamic social finance still lacks in this area.To fill this gap, in this study, we aim to build an understanding of Islamic Social finance and vividly draw a line between pure to profit-oriented social finance institutions.This study also emphasizes the existing issues in the operation of social finance instruments.
In the context of Islamic Social Finance many studies have focused on waqf, zakÉt, and microfinance as tools of poverty alleviation 8 9 10 but not explicitly as tools for building the concept of Islamic Social Finance.However, the exceptional work of Ahmed ( 2019) is an exclusive attempt to develop a comprehensive Islamic social finance ecosystem 11 .Likewise, the need for extensive research regarding the inclusion of financial technologies such as crowdfunding platforms and blockchain technology which influence the development and widespread Islamic social finance process 10 .There are some studies on Islamic social finance that highlight the importance of blockchain, however, the focus is either on zakÉt 12 or waqf 13 rather than the potential of Islamic social finance as a whole.Therefore, to fill this gap, this study aims to build a framework that connects the key players of Islamic social finance through crowdfunding platform which can act as a moderator between the players of the Islamic Social finance ecosystem to resolve the prevailing issues.

Islamic Social Finance
To understand the concept of Islamic social finance, we first need to develop an understanding of social finance.Social finance according to Michele-Lee, Frances, and Tim (2012) refers to the utilization of financial resources primarily for social and environmental returns, and in some cases, a financial return.Financial returns are easy to evaluate as compared to social and environmental returns 14 .However, we have limited the scope of this study to financial and social returns.In traditional social finance, the key players are charity institutions, Non-Governmental Organizations (NGOs), and Microfinance institutions.However, this area has been extended to include forprofit enterprises with the aim of generating profit as well as creating social and environmental impact.The portfolio managers of such types of enterprises establish conventional strategies to optimize the portfolio to provide returns up to or beyond the risk-adjusted market rate.The inclusion of such players in the social finance sphere gave rise to 'impact investing' -the models that encourage enterprises/organizations to create social or environmental impact as well as return on the invested capital to the investors 2 .Islamic social finance works on the same principle while aligning with SharÊ'ah principles 15 .Accordingly, Kuanova et.al.  (2021) mention that all Islamic finance principles represent a coherent financial activities system that aims to create wealth and achieve prosperity for the community 6 .In addition, Islamic finance promotes socioeconomic empowerment through social tools, zakÉt (almsgiving), Îadaqah (voluntary), waqf (endowment) and Islamic microfinance, which have been adopted and applied even outside the Islamic world.These tools of Islamic social finance are associated with philanthropic giving but have different forms and definitions.
Based on the above discussion, Islamic social finance can be classified into three categories (see Figure 1).Traditional Islamic social finance revolves around philanthropy (zakÉt, waqf, Îadaqah), and cooperatives (qarÌ and kafÉlah) 8 .These types of institutions are only concerned with the social impact of their investments.Not-forprofit Islamic microfinance is also part of the contemporary Islamic social finance sphere 6 16 17 18 .This type of institution has social value creation as a primary objective and financial value as a secondary.We categorize these institutions under the umbrella of revenueoriented institutions.Such institutions generate revenues from social activities to cover their costs only.The third type of institution is those with the primary objective of financial value first and social value later.This category includes for-profit microfinance institutors, Islamic Banks, Takaful, Islamic mutual funds, and corporations.These institutions may align their investment strategies in such a way that the financial value creation and social value creation objectives are achieved.It can be seen from Figure 1 that the colour shifts from darker to light as the orientation shifts from pure impact to profit first.It shows the shift from pure social finance activities to profit-oriented blended activities.

Impact-oriented Institutions
Impact-oriented institutions are inspired by the philosophy of philanthropy.The main objective of such type of institutions is to resolve social tribulations through charities, and thus they typically rely on charities and grants.In Islam, charity commonly known as Îadaqah is one of the greatest acts of virtues and a mode of worship that is highly rewarded in this world and the hereafter.It is a way to pay gratitude to Allah Almighty Who has bestowed the human with worldly benevolence.Islam demands and encourages its believers to do charity.In Islam, charity or Îadaqah can be divided into three categories, compulsory Îadaqah such as ZakÉt, voluntary Îadaqah such as donations to charitable organizations etc. and waqf.The institutions in this study are termed as not-for-profit-and-revenue enterprises where their business model is to create social value for free.These three types of charities are briefly explained below: • Voluntary Øadaqah: It is a concept of voluntary charity-giving.
The believers do Îadaqah to seek the pleasure of Allah Almighty.This type of charity is also collected by not-for-profit-andrevenue enterprises from the public.• Compulsory Øadaqah (ZakÉt): It is an Islamic wealth tax imposed on believers having 90 grams of gold or 630 grams of silver or equivalent cash and not in use for a year.There are 8 categories of beneficiaries of zakÉt identified in surah tauba verse 60.
The Sadaqat (prescribed alms) are (meant) only to be given to the poor, the needy, to those employed to collect them, to those whose hearts are to be won, in the cause of the slaves and those encumbered with debt, in the way of Allah and to a wayfarer.This is an obligation prescribed by Allah.Allah is All-Knowing, Wise. 19Waqf: Waqf is an inalienable trust in which the founder of the waqf (wÉqif) makes the guidelines or principles for the property's revenue and allocates the profit, usufruct or yields of the property to a specific person or institution.Such property is then given in the possession of the fiduciary (wali or mutawalli) who oversees the trust for the benefit of a third party 20 21 22 .Waqf can be categorized into immovable -an asset's usufruct is endowed for a specific purpose and movable -such as cash, shares etc.Most of the contemporary literature focuses on cash waqf due to its diversified benefits to the public.
Different institutions manage the above-mentioned types of charities.For example, both movable and immovable waqf are managed by department of endowment known as awqÉf.In Malaysia, waqf is under the jurisdiction of the State Islamic Religious Council (SIRC) and in Pakistan under the jurisdiction of provincial governments.ZakÉt and Øadaqah are usually managed by bait-ul-mÉl or a separate zakÉt department at the government level, however, it is also allowed to do these two types of charities privately.This is why zakÉt and Îadaqah are not only collected by government-elected institutions but also by private charity institutions.These institutions are usually not concerned with profits or revenues but the social impact.

Revenue-Oriented Social Finance Institutions
Revenue-oriented social institutions can also be called as notfor-profit social enterprises.Objectives of these types of institutions are to create a social impact and recover the capital and costs as well.In other words, these institutions are only concerned with the social impact their investments create while covering the cost of capital.Akhuwat is a not-for-profit Microfinance institution in Pakistan which can be considered an example of a revenue-oriented social finance institution.Akhuwat receives donations from the public and institutions and transforms them into qarÌ ul Íasana-based microcredit.The borrowers start new businesses or support their existing ones through these microloans.Akhuwat does not receive any profit but is only concerned with the social impact, the loan, and the service fee.Since its inception in 2001, Akhuwat has disbursed PKR140 billion (USD 835.8 million) and transformed 4.8 million lives 2324 .

Profit Oriented Social Finance Institutions
For-profit social enterprises earn profit while keeping their social purpose intact.Socially Responsible Investments (SRIs) are linked with these types of enterprises.Investors invest in businesses called Socially Responsible Businesses (SRBs) which are directed towards creating environmental and social impact.Fair coffee trade companies are one of example of profit-oriented social institutions.The "Fair Trade Certified" coffee-producing companies purchase coffee under fair trade conditions.These conditions help the farmers to get a fair price for their produce.Hence, the investors or venture capitalists who are in favour of such community services invest in Fair-trade Certified coffee companies.In Pakistan, Wasil Foundation is an example of such an institution which is providing financing facilities through Islamic financial contracts to support the poor in breaking their vicious circle of poverty.Moreover, it also provides business development services, skill development training and advocating their rights.Bait ul mÉl wa tamwil (BMT) and AmÉnah IkhtiÉr Malaysia (AIM), Malaysia's largest microcredit organization are other exemplary microfinance institutions that can be considered under this category.

Issues and Challenges
Islamic social finance is more developed and understood on the left extreme of Islamic Social finance (see Figure 1) as compared to the right extreme of the spectrum.To elaborate, impact-only institutions have been developed since the emergence of Islam but the role of these institutions in creating social impact in current times is much extended.This is because the social impact is not constant but evolves with the time thus the role of Islamic social finance institutions must adapt its role to the dynamic social issues.To tackle these issues, relying on the impact only institutions are not wise but bring more social finance institutions such as revenue-based and profit-oriented institutions to create sustainable social impact.However, several underlying issues exist in these institutions when it comes to practical implications.

Issues in Impact only Islamic Social Finance Institutions
Previous studies show that impact-only institutions have a huge potential to be developed and optimized 25 26 27 28 29 30 .However, despite potential development, these institutions still need a lot of improvement, whether from the regulatory, practical, or educational perspective.Challenges need to be addressed to optimize the development of impact-only Islamic social finance institutions.Although different challenges are faced by different countries, there are three common types of obstacles that are faced by most Islamic countries.These aspects are literacy or awareness, operational, and regulation.
In Indonesia, in 2020, BAZNAS (regulator of zakÉt) held a survey on the awareness of zakÉt.The literacy index showed quite a high number of 66.78.The literacy index contained two factors, basic and advanced knowledge.From the conducted survey, it is revealed that Muslims in Indonesia have a higher index in basic knowledge.While for advanced, the index showed a low number as compared to basic knowledge i.e., 56.68.Moreover, Badan Wakaf Indonesia (BWI), in the same year, also conducted a similar survey for measuring waqf awareness, where the overall and each factor's result showed a quite low score of 50.48.The lowest score in the waqf literacy index is on advanced knowledge where the index showed a score of 37.97.It is far behind ZakÉt's literacy.This shows that the first challenge that needs to be addressed is community awareness of Islamic Social Finance, particularly the waqf.
Awareness of zakÉt was also recorded as high for several countries as reported by IRTI (2020) 31 .This high level of awareness leads to efficiency in collecting zakÉt funds.This high level of awareness is caused by interactions between institutions and the community through seminars, training, and other community activities.The commitment to practising Islamic teachings could be one of the major factors of this high-level awareness regarding zakÉt.Pew Research Centre in 2013 reported that 77% of 38,000 Muslims in 39 countries are giving zakÉt as their obligation.This shows that since zakÉt is an obligation in Islam, therefore, it leads to higher Muslim awareness.
The second challenge of Islamic Social Finance is the aspect of governments' focus on establishing rules and regulations.To optimize the use of Islamic social finance, there is a need to build a strong structure and institution along with high competencies within the resources.On one end, where strong infrastructure and regulations are necessary however, on the other end there are some Muslim countries where they lack in these areas.For instance, in Pakistan, according to Pakistan Centre for Philanthropy (2017), only 11 per cent of respondents were observing obligatory charity while the majority (30 per cent) used to give their Îadaqah privately 32 .This is because of the lack of trust in zakÉt institutions and the scarcity of awareness about cash waqf.One of the factors of such lack of trust and awareness is because government's lack of interest in bringing transparency through introducing appropriate rules and regulations.
Nevertheless, in some countries, governments have shown their support in optimizing Islamic social finance.In Indonesia, National Economic and SharÊ'ah Finance Committees (KNEKS) were formed under government and ministries to support the development of Islamic Economics and Finance.In 2021, the national movement of cash waqf has been launched to support the waqf development in Indonesia.The Ministry of Finance also issued several Islamic obligations or sukËk based on cash waqf (Cash Waqf Linked Sukuk).This shows the government's intent to fully support the development of Islamic Social Finance.However, weak regulations relating to zakÉt and waqf hinder the effectiveness of government initiatives.
According to ISDB, Islamic social finance, especially waqf has witnessed ups and downs due to certain factors, such as political influence, colonial rule, and human greed.These factors cause waqf assets to be lost for decades.Waqf assets in some countries are realized after independence.Province of Tripoli for example, the first attempt at reclassification of waqf assets identified about 11,000 real estate, 6,000 mosques, and more than a thousand schools of Holy Qur'ān memorization.This work must be done with the involvement of experts in the field of surveying.Hence, it necessitates that the government should establish special protection regulations to prevent any loss and preserve existing waqf assets.This kind of regulation has already been established in Libya.
The third relates to the operational practices of impact-only institutions.The operational issues of impact-only institutions can be divided into two categories, human resources, and technological development.Human resources in the philanthropic industry are limited, both in quantity and quality.Competency standardization must be done to optimize the impact of these institutions.Certification of Émil in Indonesia for example, has been initiated since 2019, not only to optimize but also to gain trust from the community that their funds are handled with great care and safety.However, NÉÐir (manager) of waqf has no standard certification for their competency yet.
Nurul et.al. (2017) also mentioned other issues that are being faced by waqf institutions.Being NÉÐir of waqf is commonly his main profession 33 .NÉÐir usually has other professions and developing waqf assets is its second profession.This phenomenon could decrease the performance of NÉÐir which then could cause the development of waqf not optimal.NÉÐir has also been mentioned to be an individual and this could cause the same problem.
Transparency in cash waqf operations is another issue which is haunting donors in countries such as Indonesia and Malaysia 34 35 .The donors want to know where their donations are spent, though, a few waqf institutions are providing the records of their operations to the public too.This problem is not only with social impact only institutions but also with the microfinance institutions in most Muslim countries.
The last challenge is the application of digitalization and technology.Pandemic conditions have forced the majority of the industry sectors to adapt the technological change.Along with the fast development of technology, impact-only institutions should also adopt technology in their operations, especially during covid pandemic when there were restrictions and difficulties to donate or distribute the funds.Moreover, by digitalization in the industry, transparency, effectiveness, and efficiency can be emphasized in management.Again, the waqf sector still has no integrated system to centralize the data of waqf assets and their distribution in most of Muslim countries.

Issues and Challenges for Revenue-Based Islamic Social Finance Institutions
In our proposed Islamic social finance spectrum, core revenue-based social finance institutions can be kafÉlah-based and qarÌ based.In Pakistan, the largest qarÌ based microfinance institution is Akhuwat Islamic Microfinance.The institution is a success by providing benevolent loans to the needy with a recovery rate of 99.9 percent.The institution covers its costs from the service fee charged on the loan maintaining its pool sustainable.According to Dr. Amjad Saqib (CEO of Akhuwat Foundation), due to various reasons many other microfinance institutions in the world have the same model but failed to exist.
One of the major reasons for such failures is the complete dependence of these organizations on charities and government grants.If the institution is unable to recover the disbursed loans, the capital pool diminishes with time.The most popular collateral for these types of institutions is social collateral, i.e., group-based lending where each borrower in the group is the guarantor of the other.The concept of kafÉlah is the solution to this issue which is generally accepted in Islamic Banking and SukËk market.However, there is an extinction of kafÉlah-based institutions that could provide a guarantee for low-income borrowers who do not have collateral to access the capital from Islamic Banks or other for-profit lending institutions.
The issue of kafalah is more prevalent in agriculture financing.Many small farmers are excluded from receiving financing facilities due to lack of collateral.The statistics of agriculture loans disbursement show that microfinance institutions could not disburse more than 57 percent of loans of the given target 36 .The issue was also prevalent in the financial year 2019-2020.The main reason for the exclusion of small-scale farmers was lack of reasonable guarantees 37 .
It is also observed that the facility of kafÉlah is available for the 'haves' while 'have-nots' rely on the social collateral only.In Islamic economics where cooperation is one of the primary pillars, financing facilities without financial collateral need to be available for the 'have-nots' as well.

Issues and Challenges for Profit-Oriented Islamic Social Finance Institutions
Social entrepreneurs come across hurdles in having access to capital 14 .The main objective of these enterprises is to create social impact which is usually difficult to measure.The capital providers are typically concerned about the return on their capital investments which is difficult to guarantee by social entrepreneurs.In Western counties, this problem, to some extent, is resolved by social venture capitalists.Acuman.org is a social venture capital provider to social entrepreneurs for creating social and environmental impact.One of its recipients is the 'Agha Khan Rural Support Program' which aims to build small hydropower plants in Chitral, Pakistan to generate electricity for the people who do not have any access to cheap and clean energy resources.Unfortunately, we do not have such examples of social venture capitalists at the grassroots level in the Islamic social finance domain.The reliance is largely made on Western social venture capital providers, governments, and international grants.This is because the research in Islamic Social finance is concentrated on the institutions of waqf, zakÉt and microfinance mechanisms to resolve social issues.Widely held research is focused on the role of Islamic microfinance in poverty alleviation 38 39 40 41 42 , waqf and zakÉt's role in poverty alleviation 43 44 45 46 47 .However, the role of profit-oriented social finance institutions is overshadowed both by academia and industry.
There is a plenty of potential present in the Islamic finance system to create its social venture capital vehicles.However, this can only be done if this area of research is explored and communicated to the bodies in Islamic financial institutions.

Proposed Model
To tackle the issues and create an impact, a sound Islamic social finance ecosystem is vital.In this regard, Ahmed (2019) provided a comprehensive overview of his proposed Islamic social finance ecosystem 6 .According to him, one institution alone cannot resolve social issues unless all work collectively.He proposed a comprehensive and complex ecosystem in which for-profit, not-forprofit enterprises, governmental institutions, Islamic Banks, and Islamic Mutual funds work together to answer social problems or support those who do not have the political power to access the capital.
However, there are a few issues in his (Ahmed, 2019) proposed Islamic social finance ecosystem model.First, complex systems fail if one of them works traditionally.Secondly, the involvement of many players may make the process slow.Also, in the proposed ecosystem model, direct involvement of the government in initiation and monitoring can slow down the efficiency of the system, since in the majority of the Muslim countries, governments are proved to be inefficient in creating social impact.Finally, the involvement of for-profit institutions -whose main objective is to maximize the welfare of the shareholders, can stop providing commercial financing if it costs shareholders' well-being.Hence, the reliance on these institutions needs to be minimal.
In our proposed model, the complexity of the Islamic social finance system can be reduced by introducing technological advancements in the form of crowdfunding platform.

Crowdfunding
Crowdfunding is derived from the concepts of crowdsourcing and open-sourcing.The difference between open sourcing and crowdsourcing is that in the former the whole project is outsourced, whereas, in the latter, a specific task is outsourced by an open call to a large number of anonymous people (Howe 2008).Secondly, in the case of open sourcing, the final product is available to everyone who participates in the development while in crowdsourcing the product becomes the property of the company or individual who initiated it.The concept of crowdfunding is inspired by the same philosophy, but the purpose is different.In crowdfunding, the main objective is to raise capital from many people to fund a project, new business venture, or any worthy cause rather than take the benefits of other expertise.
In a crowdfunding platform, there are project initiators who introduce the project.Depending upon the interest of people (crowd) in the uploaded project, they may make a financial contribution 13 .In a typical crowdfunding platform (see Figure 2), the capital raised is maintained by the crowdfunding platform and transferred to the project account.If the project does not achieve its set financial targets, the money is returned to its funders.Broadly speaking, there are two main models of crowdfunding in the crowdfunding financial sector, i.e., financial and non-financial crowdfunding (see Table 1).Financial crowdfunding aims to raise capital for certain projects and provide returns on their investments.Two models fit the definition of financial crowdfunding -equity, and loan-based crowdfunding.On the contrary, nonfinancial crowdfunding does not provide an opportunity for the donor to make profits on their investments.Examples of non-financial crowdfunding include reward and donation-based crowdfunding.In the Islamic social finance domain, two crowdfunding platforms were established that combine social impact-only tools such as Îadaqah, waqf and zakÉt.The first initiative in this regard was taken in Malaysia in the year 2016 when waqfworld.orgwas introduced to the world at the 12 th World Islamic Economic Forum.The platform, however, failed and disappeared for some unknown reasons.In the preceding year, the globalÎadaqah platform was launched by ETHIS Ventures.This platform has different project initiators who initiated projects for raising Îadaqah, cash waqf, or zakÉt.These initiators are usually different charity organizations who on behalf of the needy people post projects on the platform.The beauty of this platform is that it attempts to create an Islamic social finance ecosystem with the help of charity organizations and different for-profit enterprises in Malaysia.
GobalÎadaqah platform introduces various projects on its platform which are either zakÉt eligible or waqf eligible.The third category is emergency funds which are Îadaqah eligible.Some of these projects are sponsored by for-profit enterprises in a certain ratio.Suppose a project is 25 percent sponsored by ABC Corp. than the rest 75 percent of donations may be raised from other donors.However, the platform lacks other social finance services such as peer-to-peer and Islamic social finance venture capital.
In this study we proposed and aimed to extend their model and include other key players from the Islamic Social Finance ecosystem to create a better social impact.

a. Project Initiators and the Project
The project initiators are those who upload projects on crowdfunding platforms.Every crowdfunding platform has its due diligence process.Once the project initiator passes the due diligence process it is allowed to upload the project.In the case of the Islamic Social Finance ecosystem, the project initiators can either be impactonly, revenue-oriented or profit-oriented players.In our proposal, interest-free Islamic microfinance institutions, for-profit Islamic microfinance institutions, zakÉt institutions and waqf institutions are the project initiators.Each player has to pass through the due diligence process set by the crowdfunding platform.
Interest-free or not-for-profit microfinance institutions can target low-income groups in which the loan size would be relatively small.The service fee would include the microfinance institution's charges including crowdfunding platform charges.
For-profit microfinance can extend its financing facility based on the Islamic mode of financing.Introducing projects and raising funds on the crowdfunding platform would reduce their costs which will ultimately lower the profit rate charged.
Waqf institutions can raise funds for two purposes i.e., to develop idle waqf lands and generate revenue, and to develop nonrevenue generating assets e.g., masjid, free water supply, and so on.The revenue after certain necessary deductions will go back to the waqf pool for the sustainability of the waqf.However, the kafÉlah system is essential to be introduced within this platform which can be managed under fund managers.Those projects which may not be able to attract social finance providers can be guaranteed by the crowdfunding platform, where, the funding for guaranteeing will be managed through funds from Îadaqah, waqf, and zakÉt.The role of a crowdfunding platform is to bring all under one umbrella.Introducing a strong due diligence process for the inclusion of project initiators, providing financial information to the crowd about their performance on their platform, attracting social finance providers and providing them best services which are not possible in a traditional system, maintaining and reviewing the projects uploaded on their platform are all responsibilities that the crowdfunding platform needs to perform.
In Figure 5, we have explained the mechanism of the proposed crowdfunding platform.The key parts of the platform are explained above.
• Step 1: Before any project initiator can become part of CF Platform, a due diligence process needs to be performed by CF team.Once the due diligence process is completed, a specific project initiator can be recognized on the platform with all the financial ratios and rating made available.• Step 2 & 3: The project initiator can then launch a campaign (project) on the crowdfunding platform.At this stage, the SharÊ'ah team will screen the project for SharÊ'ah compliance purpose.If it gets a green signal, the project will be launched on CF Platform.• Step 4: These campaigns will be visible to the donors or financiers, and they can accordingly donate, finance, or provide guarantee to a specific project(s).
• Step 5: In case the projects are profit based then the profits derived from the projects will be channelled through CF Platform where the SharÊ'ah team will make sure that the profits are generated through SharÊ'ah compliant contracts.• Step 6: On the other hand, fund managers of the CF platform must make sure that the profit is distributed according to the MuÌÉrabah contract between the RabulmÉl (financier) and MuÌÉrib (project initiator).•

•
The issue of transparency can be resolved to a great extent as the social finance providers can see the performance of the initiator Authors generated to whom it is going to contribute and the performance of the project to which they contributed.The involvement of the government can lay the platform for introducing regulations for social impact-only institutions.The awqÉf institutions and SharÊ'ah team of the crowdfunding platform may assist and provide assurance of SharÊ'ah compliance of the entire project through supervisory and control measures.The established regulatory measures can help in defining the due diligence process for social impact-only institutions.The checks can be placed on NÉÐir or mutawalli about his qualification and his profession so that the success of the project is not affected.These due diligence checks can also include the human capital held by the project initiators.If they need to improve the whole system including capital security and SharÊ'ah compliance, they are required to provide adequate training and update their employees about the SharÊ'ah process involved along with the use of innovative technological tools.

Conclusion:
This study attempts to provide and develop a general spectrum of Islamic social finance, understand the issues in the Islamic social finance institutions under the same spectrum and to develop a crowdfunding platform to tackle the identified issues.In order to achieve the first objective of this study, an Islamic social finance spectrum has been developed in which Islamic social finance institutions are categorised into social impact only, impact first and financial value first.Further, this study identified the issues in the Islamic Social Finance institutions based on the abovementioned categorization.To tackle the issue, a crowdfunding platform is developed based on Islamic social finance spectrum so that the identified issues can be tackled.This study is believed to assist the academicians and scholars to enhance the theory of Islamic social finance rather than focusing merely on a few instruments of Islamic social finance.Furthermore, practitioners as well as researchers are expected to get a valuable guidance to further improve the suggested crowdfunding model by incorporating smart contracts and blockchain technologies.

Notes and References
1 Yunus, Muhammad, and Karl Weber, "Creating a World without Poverty : Social Business and the Future of Capitalism" (Philadelphia: PublicAffairs, 2007).

Figure 1 :
Figure 1: The Spectrum of Islamic Social Finance Source: Alex Nicholls and Jed Emerson (2014) & authors generated

Figure 3 :
Figure 3: The Projects' funds providers Source: Authors generated b.Fund Providers

Table 1 :
Types of Crowdfunding Platforms Source: Authors' Compilation