The problems facing agricultural sector in Zanzibar and the prospects of Waqf-Muzar’ah-supply chain model

Abstract

Purpose This paper aims to identify the appropriate model to address the financial challenges in agricultural sector in Zanzibar. Since the middle of 1960, clove production has continually and significantly decreased because of some problems and challenges that include financial ones. The financial intermediaries such as banks, cooperatives and micro-enterprises provide micro-financing to the farmers with high interest rates along with collateral requirements. The numerous programmes, measures and policies adopted by the relevant parties to find out the solutions to the dwindling clove production have failed. Design/methodology/approach The authors will review and examine several existing financial models, identify the issues and challenges of the current financial models and propose an appropriate Islamic financing model. Findings The numerous programmes, measures and policies adopted by the relevant parties to find out the solutions to the dwindling clove production have failed. This study, therefore, proposed a Waqf-Muzara’ah-supply chain model to address the financial challenge. Partnership arrangement is also suggested in the model to mitigate the issues of high interest rates and collateral that constrains the financial ability of the farmers and their agricultural output. Originality/value The contribution of the agricultural sector to the economic development of Zanzibar Islands is considerable. As one of the important agricultural sectors, the clove industry was the economic backbone of the government of Zanzibar. This study is believed to be a pioneering work; hence, it is the first study that investigates empirically the challenges facing the clove industry in Zanzibar.

Management of Waqf Assets at Waqf Institutions in Indonesia

“…The results of this research were strengthened by the research results of Munir [46], Nugroho [47], Lestari [48], Setyani,[49]. This condition, similar to the management of Waqf in other countries such as Malaysia [50].…”

Critical assessment of Islamic endowment funds (Waqf) literature: lesson for government and future directions

“…(2019) Financing Agriculture Orbay (2012) Shafiai et al. (2015) Moh'd et al. (2017) Financing Education Mahamood and Rahman (2015) Shamsudin et al.…”

“…This collaboration can also reduce poverty ( Haneef et al., 2014 , 2015 ; Ahmed and Salleh, 2016 ), reduce the gap between the rich and the poor ( Rahman and Ahmad, 2011 ; Zakaria et al., 2013 ), increase financial access ( Hamber and Haneef, 2017 ; Moh'd et al., 2017 ; Abdullah and Ismail, 2017 ; Hamber and Haneef (2017) ; Zabri and Mohammed, 2018 ), create new banking products ( Ramli and Jalil, 2014 ). and possibly establish waqf-based banks ( Mohammad, 2015 ) that are distinct from other common banks.…”

Proposed Secured Bay-Salam Model for Financing Agriculture by Islamic Banks

“…Farmers and small agribusinesses in developing countries often experience difficulty in accessing finance. Partly, this is due to their socio-economic status leading to them being characterised as un-bankable people (Moh'd et al, 2017;Muneeza et al, 2011;Saiti et al, 2018). Moreover, farmers are required to pledge collateral and prepare feasible business plans when applying for funding (Cabannes, 2012;Moh'd et al, 2017;Sadler et al, 2016).…”

“…Partly, this is due to their socio-economic status leading to them being characterised as un-bankable people (Moh'd et al, 2017;Muneeza et al, 2011;Saiti et al, 2018). Moreover, farmers are required to pledge collateral and prepare feasible business plans when applying for funding (Cabannes, 2012;Moh'd et al, 2017;Sadler et al, 2016). For urban farmers, it is quite difficult to translate ideas into sound financial terms to enable bankers to approve funding (Cabannes, 2012).…”