Development Of Waqf Based Microfinance And Its Impact In Alleviating The Poverty

Aulia Arifatu Diniyya

Abstract


The purpose of this paper is to discuss the potential role of the institution of Waqf in poverty alleviation.  Poverty is a complex, multi-dimensional phenomenon that has captured the attention of numerous scholars and agencies globally. The social role of the Islamic financial sector can be best exemplified by providing finance to the poor to increase their income and wealth. This paper will explore on how microfinance can be provided on Shariah compliant basis through Waqf model. This research also reviewing the development of the integrated Waqf based Islamic microfinance which aimed to provide solutions to reduce poverty. An integration of Waqf-based Islamic microfinance (IWIM) model is proposed to address all the practical challenges of microfinance faced in Muslim communities. In this model, microfinance is practised in compliance with Shari’ah to address the multi-dimensional aspects of poverty and empowering the poor in order to enhance the socio-economic development and hence the well- being of the Ummah. With this aspiration, the IWIM model aims to tackle the challenges related to the scarcity of capital, inadequate human resources, absence of proper Takaful programs and project financing in an integrated approach. However, Waqf based microfinance still may be facing some problems should be addressed which related to credit risk, moral hazard, and economic viability.


Keywords


Waqf , Poverty alleviation, and Microfinance

Full Text:

PDF

References


Baqutayan, S.M., et.al, (2018), “Waqf Between the Past and Present”, Mediterranean Journal of Social Science, Vol.9 No.4, pp.149-155.

Çizakça, Muratz (1998), “Awqaf In History and Its Implications For Modern Islamic Economies” Islamic Economic Studies Vol. 6, No. 1.

Habib, Ahmed. (2002), Financing Microenterprises: An Analytical, Study of Islamic Microfinance Institutions, Islamic Research and Training Institute Journal, Vol. 9, No.2.

Hassan, K. (2010), “An Integrated Poverty Alleviation Model Combining Zakat, Awqaf and Micro-Finance” Seventh International Conference – The Tawhidi Epistemology: Zakat and Waqf Economy, Bangi 2010.

Pramanik, A., Mohammed, M. O., Haneef, M.A., (2015), “Integration of Waqf and Islamic Microfinance for Poverty Reduction: Case Studies of Malaysia, Indonesia, and Bangladesh”. SESRIC and International Islamic University Malaysia, Gombak, Kuala Lumpur.

Sadeq, AbulHasan M., (2002), "Waqf, perpetual charity and poverty alleviation", International Journal of Social Economics, Vol. 29 Issue: 1/2, pp.135-151

Shaikh, S.A., Ismail, A. G., Shafiai, (2017), "Application of Waqf for social and development finance", ISRA International Journal of Islamic Finance, Vol. 9 Issue: 1, pp.5-14.

Asmy, M. (2018), “A qualitative inquiry into cash waqf model as a source of financing for micro enterprises”, ISRA International Journal of Islamic Finance, Vol. 10 No. 1, pp. 19-35.

Raimi, L., Patel, A., Adeopo, I., (2014), “Corporate social responsibility, Waqf system and Zakat system as faith-based model for poverty reduction”, World Journal of Entrepreneurship, Management and Sustainable Development Vol. 10 No. 3, pp. 228-242.

Noordin, N. H., Haron. S. N., Kassim, S. (2017), “Developing a comprehensive performance measurement system for waqf institutions”. International Journal of Social Economics Vol. 44 No. 7, pp. 921-936

Elgari, M.A. (2004), “The Qard Hassan bank”, paper presented at the International Seminar on Nonbank Financial Institutions: Islamic Alternatives, 1-3 March, Kuala Lumpur.

Tohirin, A. (2010), “The cash waqf for empowering the small businesses”, paper presented at the 7th International Conference on the Tawhidi Epistemology: Zakat and Waqf Economy, Bangi.

Lahsasna, A. (2010), “The role of cash-waqf in financing micro and medium-sized enterprises”, paper presented at the 7th International Conference on the Tawhidi Epistemology: Zakat and Waqf Economy, 6 January, Bangi, Selangor.

Wulandari, P., Kassim, S. (2015), “Issues and challenges in financing the poor: case of Baitul Maal Wa Tamwil in Indonesia”, International Journal of Bank Marketing Vol. 34 No. 2, 2016 pp. 216-234.

Haneef, M. A., Pramanik, A., Mohammed, M. O., Amin, M. F., Muhammad, A. D., (2015), “Integration of waqf-Islamic microfnance model for poverty reduction The case of Bangladesh”. International Journal of Islamic and Middle Eastern Finance and Management Vol




DOI: https://doi.org/10.12928/ijiefb.v2i2.879

Refbacks

  • There are currently no refbacks.


Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.


Ihtifaz : Journal of Islamic Economics, Finance, and Banking

Kampus 4 Universitas Ahmad Dahlan
Jl. Ring Road Selatan, Tamanan, Banguntapan, Bantul, Daerah Istimewa Yogyakarta 55191
Telp. (0274) 563515; Fax. (0274) 564604
E-mail : ihtifaz@uad.ac.id 


p-ISSN: 2622-4755 | e-ISSN: 2622-4798


View My Stats