Exploring the impact of crowdfunding and digital payment tools on good governance in Islamic social finance: a case study of direct aid society in Kuwait
Mysara Abdelwahab Mohamed Bioumy, Rusni Hassan, Meshari Rden Aldaihani, Ali MahmoudPurpose
The study aims to explore the role of good governance practices in addressing challenges faced by Islamic social finance institutions (ISFIs), with a particular focus on the Direct Aid Society in Kuwait. It examines how financial technology (FinTech) tools, specifically crowdfunding and digital payments, impact good governance standards in such institutions.
Design/methodology/approach
A qualitative research approach was employed, combining official document analysis, library research and semi-structured interviews with key stakeholders, including board members, management and staff of the Direct Aid Society. This methodology provided an in-depth understanding of the interplay between governance practices and FinTech adoption.
Findings
The findings demonstrate that FinTech tools significantly enhance good governance standards in the Direct Aid Society by improving transparency, trust, disclosure, accountability and financial stability. The study also highlights that these governance enhancements align with broader practices in ISFIs across the Gulf and Middle East regions.
Practical implications
The study offers actionable recommendations for policymakers and practitioners on leveraging FinTech innovations to strengthen governance frameworks, ultimately enhancing transparency, accountability and financial sustainability in ISFIs.
Originality/value
This study moves beyond the prevailing transactional focus in existing literature, which primarily assesses FinTech in terms of operational efficiency and fund mobilisation. It instead presents a structural evaluation of how crowdfunding and digital payment platforms implement key good governance standards, specifically transparency, accountability and responsibility, within donation-based ISFIs. Through an examination of the Direct Aid Society in Kuwait, this paper establishes how real-time digital tracking reduces traditional information asymmetries between remote donors and institutional management, thereby aligning practical governance practices with the ethical imperatives of trust and institutional legitimacy.