The evolution of Islamic venture capital in Malaysia: an expository study
Islamic venture capital is a strategic tool to enhance cooperation in the Muslim world. This is because it helps form smart partnership among the members of OIC countries. Venture capital is an investment in highly risky projects in return for potential high return focusing mainly on technolog...
| Main Authors: | , , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
LexisNexis Malaysia Sdn Bhd
2013
|
| Subjects: | |
| Online Access: | http://irep.iium.edu.my/36288/ http://irep.iium.edu.my/36288/ http://irep.iium.edu.my/36288/1/Evolution_of_IVC-MCP_Bulletin_32013.pdf_My_Paper_%281%29.pdf |
| Summary: | Islamic venture capital is a strategic tool to
enhance cooperation in the Muslim world. This
is because it helps form smart partnership
among the members of OIC countries.
Venture capital is an investment in highly
risky projects in return for potential high return
focusing mainly on technology. For more than
a decade, the trend has shown tremendous
changes; hence venture capital investment
records increasing interest of the investors in
other sectors such as agricultural production,
medical instruments and others. Islamic
venture capital has been running in parallel
with the mainstream in Malaysia. There are
several reasons supporting the emergence
of Islamic venture capital namely, attraction of
Middle East investors and underutilisation of
surplus in the Muslim world. This paper traces
the development of Islamic venture capital
in Malaysia, identifies the regulatory bodies,
and the policy initiatives, and the pioneer
corporations. In conclusion, it examines three
phases of the development of Islamic venture
capital in Malaysia namely, the evolutionary
process, the degree of incorporation and
developmental patterns. The applied Shariah
mechanisms are hybrid of musharakah,
mudarabah, and wakalah. It suggests that the
balance between supply side and demand
side, public friendly regulation may actualise
the Malaysian industrialisation dream. In
addition, refocusing long-term investment,
reorientation of SMEs towards venture capital
investment, establishment of private-oriented
venture capital industries, creation of cash
waqf and/or Islamic social bank are some
suggested solutions in promoting Islamic
venture capital in Malaysia. They may also
be of help to other jurisdictions.
Key words: Islamic venture capital,
Musharakah and Mudarabah, venture capital,
supply and demand side, policy making
and planning approach, problem-solving
approach. |
|---|