Sustainable livelihood development is a major challenge facing many Muslim communities worldwide, particularly in developing countries where poverty and unemployment levels remain high. Microfinance is seen as one of the instruments used in poverty alleviation, but the method that involves lending money and earning profits (interest-based method) is facing criticisms based on Shara compliance issues. This paper proposes cash Waqf, an Islamic social finance instrument, to enhance the livelihoods options for vulnerable Muslims. As one form of Islamic endowment, cash Waqf is a flexible fund available for productive purposes and can be operated within the framework of Shara aims of wealth protection, social equity and reduction of poverty. Qualitative research is adopted in this study, focusing on doctrinal analysis of the literature on Islamic finance, along with empirical studies concerning Waqf and microfinance. This study analyzes the cases of cash Waqf in microfinance of Malaysia, Indonesia and Bangladesh in relation to operational modes, governance and the relevant Shara-compliant financing products such as qard asan, murabah and murbaah used within a Waqf-based financing mechanism. The study reveals that merging cash Waqf with microfinance could expand financial inclusion for the needy, and could strengthen the sustainability of micro-enterprises. Yet, certain operational challenges such as inadequate governance, absence of regulatory frameworks, and lack of transparency needs to be overcome. The study proposes a conceptual framework for integrating cash Waqf, Islamic microfinance and sustainable solutions, where the participation of stakeholders and provision of a supportive environment and capacity building activities are necessary. The study concludes that integrating cash Waqf and microfinance provides a sustainable approach for livelihood development of Muslim communities, offering a sustainable solution to overcome economic challenges and promote socio-solidarity for inclusive development. The paper advances the existing literature in Islamic social finance concerning the study of Waqf as a modern socio-economic development tool and provides some findings and recommendations to scale up Waqf-based microfinance to meet the SDGs particularly Poverty Reduction and Economic Growth.
Tag: Articles
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Assessing the Integration of Islamic Social Finance Instruments (Zakat, Waqf, and Qard Hasan) in Supporting Sustainable Growth of Food and Textile MSMEs in Nigeria
This study evaluates how well Islamic social finance tools zakat, waqf, and qard ḥasan are incorporated into helping MSMEs in Nigeria’s food and textile industries thrive sustainably. Based on the Islamic goals of socio-economic justice and stewardship (khilāfah), the study looks at how these tools support inclusive financing, ecologically friendly practices, and business resilience. A mixed-methods approach was used, which included in-depth interviews with chosen business owners and managers in addition to a structured survey of 140 MSMEs. The results show that just 35% of MSMEs now use energy-efficient technology, but 48% of textile MSMEs and 65% of food MSMEs have implemented waste minimization measures. Nonetheless, a sizable percentage (72%) indicated a great desire to embrace eco-friendly technologies with the help of Islamic social finance methods. Furthermore, 80% of the MSMEs surveyed said they adhered to fair labor standards, which reflects the moral perspective promoted by Islamic finance principles. Positive socio-economic spillover effects were seen at the home level, where patronage of these MSMEs was linked to a 20% decrease in food waste and a 15% decrease in clothing expenditure. The study highlights the important yet untapped potential of qard ḥasan, waqf, and zakat in fostering sustainable MSME development. It promotes specific legislative interventions, such as frameworks for halal sustainability certification, structured waqf-based MSME support programs, and interest-free financing for green technologies. The study comes to the conclusion that successful integration of Islamic social finance tools can promote household welfare, MSME sustainability, and economic growth in Nigeria in accordance with the larger Islamic imperatives of social justice and environmental stewardship.
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Assessing the Integration of Islamic Social Finance Instruments (Zakat, Waqf, and Qard Hasan) in Supporting Sustainable Growth of Food and Textile MSMEs in Nigeria
This study evaluates how well Islamic social finance tools zakat, waqf, and qard ḥasan are incorporated into helping MSMEs in Nigeria’s food and textile industries thrive sustainably. Based on the Islamic goals of socio-economic justice and stewardship (khilāfah), the study looks at how these tools support inclusive financing, ecologically friendly practices, and business resilience. A mixed-methods approach was used, which included in-depth interviews with chosen business owners and managers in addition to a structured survey of 140 MSMEs. The results show that just 35% of MSMEs now use energy-efficient technology, but 48% of textile MSMEs and 65% of food MSMEs have implemented waste minimization measures. Nonetheless, a sizable percentage (72%) indicated a great desire to embrace eco-friendly technologies with the help of Islamic social finance methods. Furthermore, 80% of the MSMEs surveyed said they adhered to fair labor standards, which reflects the moral perspective promoted by Islamic finance principles. Positive socio-economic spillover effects were seen at the home level, where patronage of these MSMEs was linked to a 20% decrease in food waste and a 15% decrease in clothing expenditure. The study highlights the important yet untapped potential of qard ḥasan, waqf, and zakat in fostering sustainable MSME development. It promotes specific legislative interventions, such as frameworks for halal sustainability certification, structured waqf-based MSME support programs, and interest-free financing for green technologies. The study comes to the conclusion that successful integration of Islamic social finance tools can promote household welfare, MSME sustainability, and economic growth in Nigeria in accordance with the larger Islamic imperatives of social justice and environmental stewardship.
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Waqf, Shared Value and the Rise of Society Governance
This article advances the argument that waqf (Islamic endowment) constitutes a foundational model of society governance, in which communities institutionalize moral responsibility into durable public capacity. Rather than viewing waqf solely as a charitable or financial instrument, the study conceptualizes it as a governance architecture that enables societies to mobilize, preserve, and deploy resources for collective welfare independent of fluctuating political regimes. Through a narrative-historical analysis, the article traces waqf’s evolution from the Prophetic model of trust-based stewardship and the institutional consolidation under the early caliphs, to its resilience during dynastic centralization, its fiscal institutionalization in the Ottoman period, and its contemporary transformation within modern regulatory frameworks. Central to the analysis is the proposition that waqf embodies an early and enduring form of shared value creation. By preserving endowed capital while continuously generating social returns, waqf integrates economic sustainability with public benefit. This dual function positions waqf as a bridge between moral economy and modern governance theory, aligning closely with contemporary debates on stakeholder capitalism, sustainable development, and civil society resilience. The article further argues that waqf is more than its challenges. While issues of governance reform, transparency, and asset optimization remain significant, these represent transitional adjustments rather than structural weaknesses. Properly institutionalized, waqf strengthens community autonomy, enhances accountability through trusteeship, and sustains intergenerational responsibility. In an era marked by fiscal strain and institutional distrust, waqf offers a society-centered governance paradigm capable of generating shared value and reinforcing collective capacity beyond the limits of state and market mechanisms.
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Reimagining Waqf-Based Entrepreneurship: Building Inclusive Islamic Business Ecosystems for Sustainable Economic Growth
» Journal of Regional Development and Technology Initiatives
Entrepreneurship has been widely acknowledged as a significant engine for job creation, innovation, poverty reduction and inclusive economic growth in recent times. For developing economies, particularly small and medium-sized enterprises (SMEs), entrepreneurship fosters overall economic resilience and sustainable development. Despite the critical role of entrepreneurship, many aspiring entrepreneurs continue to face substantial challenges such as limited access to finance, poor business support services, a lack of technical expertise, weak institutional networks, and confined markets. Often, classical modes of financing have excluded a significant proportion of the most disadvantaged groups because of their collateral requirements, high finance costs, and poor capital access. From an Islamic economic viewpoint, waqf has long served diverse purposes; however, in most instances its function has mostly focused on education, business ventures, community infrastructure and the welfare of society. The purpose of this article is to conceptualize how waqf can be redefined as a sustainable institution to enhance entrepreneurship development and build inclusive Islamic entrepreneurial ecosystem. This paper proposes the Waqf-Based Entrepreneurship Ecosystem Framework (WBEEF) that encompasses productive waqf, entrepreneurship development, business incubation, Islamic finance, digital innovation, and institutional collaboration to support sustainable enterprise creation and enhance sustainable economic resilience. The present study used qualitative research methods and followed documentary analysis and literature review method. In this regard, both classical Islamic legal sources and modern literatures of waqf, Islamic economics, entrepreneurship, SME development, business ecosystem theory, innovation and sustainable development have critically analyzed. Through a conceptual and analytical analysis of existing literature, an integrated research has carried out linking Islamic philanthropic institutions to the development of entrepreneurial ecosystem. This study identifies that productive waqf has significant potential to foster entrepreneurship by providing seed capital, vocational training, business incubation centres, shared facilities, market development initiatives, research and innovation hubs, digital infrastructure, and other business development support services. Furthermore, an integration of waqf with Islamic banks and other Islamic financial institutions, universities, government agencies, technology organizations, business associations, and corporations could stimulate local entrepreneurial capabilities, alleviate financial exclusion, and facilitate sustainable business development. The WBEEF has built productive partnerships amongst these actors to develop youth ventures, women-owned businesses, halal and green enterprises, agricultural innovations, and social entrepreneurships, which foster economic opportunities, technology, wealth generation and economic growth within Islamic ethical framework of social justice, equity and responsibility. This paper, by conceptualizing a new framework in the context of Islamic economics, presents an original contribution in repositioning the institution of waqf from its conventional perception as only for charitable/religious affairs towards a sustainable entrepreneurial resource for inclusive business growth and socio-economic development. The Waqf-Based Entrepreneurship Ecosystem Framework (WBEEF) provides an innovative practical guideline and policy agenda for waqf institutions, Islamic finance organizations, government and public sector authorities, policy makers, entrepreneurs and development actors in leveraging waqf resources for strengthening SMEs development, job creation, poverty reduction and economic resilience in conformity with the broader social welfare objectives of Islamic economics.
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Waqf-Based Financing Models for Integrating Artificial Intelligence into Nigerian Educational Curriculum: Infrastructure, Policy, and Sustainability Perspectives
» Journal of Regional Development and Technology Initiatives
The integration of Artificial Intelligence (AI) in education is a growing global priority, particularly in addressing digital competencies and improving teaching quality. However, Nigeria faces significant challenges in adopting AI due to inadequate infrastructure, investment, and skilled personnel. This chapter discusses the potential of waqf (Islamic endowment) as a sustainable funding strategy to support AI in education, focusing on infrastructure, policy alignment, and long-term sustainability. It highlights traditional waqf’s historical role in financing education and proposes a waqf-based financing model that incorporates infrastructural development, governance frameworks, and sustainability. This research employs a qualitative and conceptual layout focused on Islamic social finance literature and artificial intelligence in education and infrastructural development in Nigeria. It uses a comparative analysis of successful waqf-based educational financing models from selected Muslim countries, proposing a conceptual framework for a waqf financing model that integrates infrastructure development, policy alignment, governance structures, and sustainability mechanisms for AI in education. This approach aims to reposition waqf to support digital transformation, reduce educational inequality, and promote sustainable educational advancement in Nigeria. The model aims to bridge the digital divide through well-targeted waqf investments, promoting equitable access to education. It also calls for regulatory support for waqf integration into national strategies and emphasizes governance transparency. By fostering human capital development among educators and addressing ethical concerns, waqf initiatives can ensure responsible AI integration. The chapter draws insights from successful waqf models in other countries to advocate for a strategic reorientation of Islamic finance to meet technological needs in Nigeria’s education system, ultimately fostering educational innovation and sustainable development.
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Reinterpreting Waqf in Light of Contemporary Socio-Economic Realities
Waqf (Islamic endowment) has historically been a key driver of socioeconomic development in Muslim cultures, funding education, healthcare, social welfare, and public infrastructure. However, conventional waqf administration and utilization strategies have struggled to adequately address modern socioeconomic concerns like as poverty, unemployment, urbanization, financial isolation, and inadequate institutional governance. This research investigates the importance of reinterpreting waqf within the context of present socioeconomic realities while maintaining true to its classical juristic roots. The study uses a qualitative and analytical approach on Qur’anic principles, Prophetic traditions, classical fiqh literature, and modern Islamic finance scholarship to explore how waqf can be revitalized through innovative instruments, institutional reforms, and integration with modern economic systems. The research advocates for a maq??id al-shar??ah-oriented reinterpretation of waqf, which provides for greater flexibility in asset management, investment strategies, and governance structures while maintaining its perpetual and benevolent nature. The findings demonstrate the ability of contemporary waqf models such as cash waqf, corporate waqf, waqf-based social finance, and public-private partnerships to satisfy current developmental requirements in a sustainable manner. The research concludes that reinterpreting waqf in light of current socioeconomic conditions is not a departure from Islamic tradition, but rather a necessary evolution that can reposition waqf as a dynamic tool for inclusive growth, social justice, and sustainable development in today’s Muslim world.
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Moral Economy and Islamic Ethics: Re-examining Waqf in the Context of Modern Capitalism
This study investigates the relevance, transformation, and potential revival of waqf (Islamic endowment) as a foundation for moral economy and Islamic ethics in the context of modern capitalism. While traditional Islamic moral economics focuses on equitable wealth distribution and social welfare, current capitalist institutions frequently favor profit maximization, financialization, and market efficiency. This study looks critically at how waqf has historically reduced socioeconomic gaps and how its ideas might be used in modern economic systems to alleviate poverty, social exclusion, and market failures. The paper proposes a normative framework for incorporating waqf into ethical economic strategies that reconcile moral imperatives with capitalist realities, based on doctrinal analysis of Islamic legal texts, a review of contemporary scholarship on moral economy theory, and case studies of modern waqf initiatives. The findings suggest that waqf can serve as a long-term tool for community investment, social safety nets, and value-based economic resilience if legal reform, governance innovation, and ethical institutional frameworks are achieved. The article concludes by advocating policy and institutional options for reviving waqf within global economic systems while maintaining Islamic ethical integrity and modern market efficiency.