Taking stock of the waqf-based Islamic microfinance model

Rose Abdullah, Abd. Ghafar Ismail

Research output: Contribution to journalArticle

3 Citations (Scopus)

Abstract

Purpose - The purpose of this paper is to explore two main aspects of waqf: the characteristics of waqf property and the management of waqf. This paper also discusses the governance of waqf management as a source of funds for Islamic microfinance institutions (MFIs). Design/methodology/approach - This research uses content analysis method to examine various literatures that discuss the concept and management of waqf. Findings - The characteristics of cash waqf such as permanence, irrevocability and perpetuity differentiate waqf from other type of donations. Therefore, cash waqf-based Islamic microfinance needs to be sustainable. Good corporate governance is vital to ensure the sustainability. As the donors of cash waqf do not aim to make financial profit, waqf-based Islamic MFIs will be able to provide low-cost capital to the poor entrepreneurs. Furthermore, to ensure the perpetuity of the waqf, it is suggested that only revenue from the waqf property should be used for microfinance fund. Social implications - The cash waqf-based Islamic microfinance will help the micro entrepreneurs to get low-cost capital without collateral. At the same time, public can donate any amount they afford to contribute to cash waqf. Originality/value - The creation of a cash waqf-based Islamic MFI must observe the issues of agency conflicts and the right of stakeholders to a transparent management. This paper emphasizes the importance of good governance in managing the waqf property as a source of fund for Islamic MFIs.

Original languageEnglish
Pages (from-to)1018-1031
Number of pages14
JournalInternational Journal of Social Economics
Volume44
Issue number8
DOIs
Publication statusPublished - 2017

Fingerprint

microfinance
management
entrepreneur
good governance
corporate governance
donation
costs
Cash
Microfinance
research approach
revenue
content analysis
profit
stakeholder
sustainability
governance
Microfinance institutions
methodology
Values

Keywords

  • Islamic microfinance
  • Social welfare economics
  • Sustainable development

ASJC Scopus subject areas

  • Social Sciences(all)
  • Economics and Econometrics

Cite this

Taking stock of the waqf-based Islamic microfinance model. / Abdullah, Rose; Ismail, Abd. Ghafar.

In: International Journal of Social Economics, Vol. 44, No. 8, 2017, p. 1018-1031.

Research output: Contribution to journalArticle

Abdullah, Rose ; Ismail, Abd. Ghafar. / Taking stock of the waqf-based Islamic microfinance model. In: International Journal of Social Economics. 2017 ; Vol. 44, No. 8. pp. 1018-1031.
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