Evaluation Study of Islamic Microfinance Program Based on Islamic Social Funds (Zakat, Waqf, and Sadaqah)
DOI:
https://doi.org/10.35335/8eqn3v81Keywords:
Islamic Microfinance, Islamic Social Funds, Zakat, Waqf, and Sadaqah, Poverty Alleviation, Financial InclusionAbstract
This study evaluates the effectiveness and impact of Islamic microfinance programs that are integrated with Islamic social funds, namely zakat, waqf, and sadaqah, in promoting financial inclusion and alleviating poverty. By adopting a mixed-methods approach, the research combines quantitative data from structured surveys with qualitative insights from interviews and focus group discussions involving beneficiaries, microfinance institutions (MFIs), and Islamic social fund agencies. The findings reveal that the integration of Islamic social funds into microfinance initiatives enhances outreach to the ultra-poor, supports ethical and interest-free financing mechanisms, and promotes socioeconomic empowerment, particularly among women and micro-entrepreneurs. Beneficiaries reported increased income levels, improved financial literacy, and strengthened community trust in Shariah-compliant financial models. However, the study also identifies key challenges, including fragmented institutional coordination, governance inefficiencies, and limited technological adoption. The research concludes that while integrated Islamic social finance programs have significant potential, their success depends on effective policy frameworks, transparent governance, and institutional innovation. This study contributes to both academic discourse and practical efforts to advance inclusive, ethical, and sustainable Islamic financial systems.References
Adams, N. (2016). Islam and development in Bangladesh: A grassroots perspective.
Ahmed, A. (2019). Socially responsible investing interconnect with the supply chain management in Islamic finance model. International Journal of Supply Chain Management, 8(5), 391–401.
Ahmed, H. (2007). Waqf-based microfinance: realizing the social role of Islamic finance. World Bank, 6–7.
Al Balushi, Y. (2019). An investigation of the adoption of Islamic financing instruments by small and medium enterprises in the Sultanate of Oman. The University of Waikato.
Alcaide Muñoz, L., Rodríguez Bolívar, M. P., & López Hernández, A. M. (2017). Transparency in governments: a meta-analytic review of incentives for digital versus hard-copy public financial disclosures. The American Review of Public Administration, 47(5), 550–573.
America, T. Z. F. O. (2008). The Zakat Handbook: A Practical Guide for Muslims in the West. AuthorHouse.
Ananny, M., & Crawford, K. (2018). Seeing without knowing: Limitations of the transparency ideal and its application to algorithmic accountability. New Media & Society, 20(3), 973–989.
Bhuiya, M. M. M., Khanam, R., Rahman, M. M., & Nghiem, H. S. (2016). Impact of microfinance on household income and consumption in Bangladesh: Empirical evidence from a quasi-experimental survey. The Journal of Developing Areas, 50(3), 305–318.
Cebeci, I. (2012). Integrating the social maslaha into Islamic finance. Accounting Research Journal, 25(3), 166–184.
Growth, S. E., Governance, G., & Who, W. (2015). About This Report.
Hassan, A. (2015). Financial inclusion of the poor: from microcredit to Islamic microfinancial services. Humanomics, 31(3), 354–371.
Junaidi, M. A. (2019). Microcredit Programmes in Development in Rural Indonesia: Gender, Cultural, and Religious Perspectives. University of Southampton.
Kammer, M. A., Norat, M. M., Pinon, M. M., Prasad, A., Towe, M. C. M., & Zeidane, M. Z. (2015). Islamic finance: Opportunities, challenges, and policy options.
Kustin, B. (2015). Islamic (micro) finance: culture, context, promises, challenges.
Ledgerwood, J., & White, V. (2006). Transforming microfinance institutions: providing full financial services to the poor. World Bank Publications.
Maes, J., & Basu, M. (2005). Building economic self-reliance: Trickle up’s microenterprise seed capital for the extreme poor in rural India. Journal of Microfinance/ESR Review, 7(2), 6.
Masyita, D. (2012). Sustainable Islamic microfinance institutions in Indonesia: an exploration of demand & supply factors and the role of waqf. Durham University.
Mia, M. B. (2013). ICT-based information systems and organisational change in microfinance organisations. Open University (United Kingdom).
Nwanna‐Nzewunwa, O. C., Ajiko, M. M., Motwani, G., Kabagenyi, F., Carvalho, M., Feldhaus, I., Kirya, F., Epodoi, J., Dicker, R., & Juillard, C. (2019). Identifying information gaps in a surgical capacity assessment tool for developing countries: A methodological triangulation approach. World Journal of Surgery, 43(5), 1185–1192.
Safieddine, A. (2009). Islamic financial institutions and corporate governance: New insights for agency theory. Corporate Governance: An International Review, 17(2), 142–158.
Sandelowski, M. (2000). Combining qualitative and quantitative sampling, data collection, and analysis techniques in mixed‐method studies. Research in Nursing & Health, 23(3), 246–255.
Setia, A. (2018). Reintegrating the legal into the social: reviving Islamic transactional law in the context of the civil economy, with special reference to Waqf. Law and Development Review, 11(1), 209–250.
Simmons, B. A. (2001). The international politics of harmonization: The case of capital market regulation. International Organization, 55(3), 589–620.
Uddin, M. N., Pramanik, A. H., Haque, A., & Hamdan, H. (2020). Assessment of Islamic microfinance on poverty reduction in Bangladesh. International Journal of Islamic Marketing and Branding, 5(4), 326–346.
Wadongo, B. I. (2014). Performance management and evaluation in non-profit organisations: an embedded mixed methods approach.
Wahab, N. A., & Rahim Abdul Rahman, A. (2011). A framework to analyse the efficiency and governance of zakat institutions. Journal of Islamic Accounting and Business Research, 2(1), 43–62.
Downloads
Published
Issue
Section
License
Copyright (c) 2025 Amran Tabarik, Chairil Alfarezel (Author)
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
