Islamic social finance in Indonesia: Opportunities, challenges, and its role in empowering society

Abstract

Purpose – This study identifies and analyzes Islamic social finance's potential, opportunities, challenges, roles, and impacts in empowering people in Indonesia.Methodology – This research used descriptive and explorative qualitative methods with a systematic literature review. This study used data analysis techniques and content analysis. Findings – This research shows enormous potential for Islamic social finance in Indonesia. Indonesia’s opportunity as a country that has the largest Muslim population in the world and has a large market potential for Islamic social finance. Challenges in developing Islamic social finance, namely the low support for Islamic social finance, the absence of Islamic banks that have maximum assets, the lack of qualified Islamic economic, human resources in the field of Islamic social finance, and the low capacity of research and development of Islamic social finance. Islamic social finance is oriented toward social welfare. This is concrete evidence of its strategic role in community empowerment and poverty alleviation in Indonesia. Islamic social finance is proven to be the main instrument that has a central role in sustainable poverty alleviation that impacts the benefit of all society. Implications – Islamic social finance should integrate with other Islamic philanthropic institutions domestically and globally to expand its impact in empowering people in Indonesia.Originality – This highly structured and in-depth literature review examines and describes the potential, opportunities, challenges, roles, and impacts of Islamic social finance.

Cash Waqf Linked Deposit Potential for Revitalizing Islamic Banking in Indonesia

“…Furthermore, the collaborative nature of CWLD aligns with the principles of Islamic social finance. As Adinugraha et al (2023) point out, Islamic social finance plays a strategic role in community empowerment and poverty alleviation. By directing resources towards impactful and socially responsible initiatives, CWLD has the potential to contribute significantly to social finance goals.…”

“…As a potential alternative model for financing micro-enterprises , CWLD has the potential to contribute to the development of new financial instruments in Islamic finance (Kresnowati & Berakon, 2017). Furthermore, its potential to alleviate poverty and empower communities aligns with broader social finance objectives (Adinugraha et al, 2023;Ibragim & Benazir, 2017). Building on the identification of key stakeholders, this study highlights some key implications and a multifaceted approach to promote CWLD in Indonesia.…”

The integration of Islamic social and commercial finance (IISCF): Systematic literature review, bibliometric analysis, conceptual framework, and future research opportunities

“…To achieve the aim of this paper, we modified several previous review papers and adopted the suggestion to use a structured literature review by focusing on specific search and select strategies [ 35 ], knowledge of previous review papers on Islamic finance and IB [ 36 , 37 , 38 , 39 , 40 , 41 , 42 , 43 , 6 ], Islamic social finance [ 44 , 45 , 46 , 47 , 14 ] and the literature on Islamic endowment funds (Awqaf or waqf) as part of Islamic social finance [ 48 , 49 , 50 , 51 , 52 , 53 , 54 ]. However, in exploring the current and emerging trends in the IISCF literature, we present a novel methodology of combining a systematic literature review (SLR) and bibliometric analysis to strengthen the result of the literature review published from 1979 to 2023.…”

What is the Model of Sharia Marketing in Islamic Microfinance Institutions?

“…It has an important role in economic development. The community's need for BMT is not limited to channelling and saving funds but also to its social services, such as zakat, infaq, and shadaqah (Adinugraha et al, 2023). BMT is one of the Sharia microfinance institutions experiencing rapid progress in Indonesia (Nurohman & Muafiah, 2021).…”