Building Trust in Crowdfunding: Evidence from Financial Transparency

Abstract

Purpose – This study examines the effect of financial transparency on crowdfunding participation and the mediating role of trust.

Design/methodology/approach – A quantitative survey was conducted with 113 Muslim crowdfunding participants in Indonesia who had experience making donations or financial contributions through digital platforms. The data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM).

Findings – Financial transparency significantly affects trust (β = 0.606; p < 0.001), while trust significantly affects crowdfunding participation (β = 0.667; p < 0.001). However, financial transparency has no significant direct effect on participation (β = 0.104; p = 0.249). Its indirect effect through trust is positive and significant (β = 0.404; p < 0.001), confirming trust as a mediator.

Research limitations/implications – The study is limited by its survey design and sample size. The findings highlight trust as a key mechanism linking transparency to crowdfunding participation.

JEL : D14, G23, L86