Toward developing a sustainability index for the Islamic Social Finance program: An empirical investigation

Abstract

Several previous studies state that the Islamic Social Finance program has not fully succeeded in creating prosperity, and there are no definite measurements to show the sustainability impact of the program. Thus, a measurement is needed to analyze various aspects in achieving the success and sustainability of Islamic social finance programs. This study developed an index for performance evaluation with an emphasis on the success and sustainability of the Islamic Social Finance program. The study used the Analytical Network Process to determine and analyze priority components. Furthermore, the Multistage Weighted Index method was used to calculate the final index score. The index was built by taking into consideration various factors, stakeholders, aspects, and indicators. This study indicates that aspects of funding contribution from donors (0.22), involvement of donors in giving advice (0.99), and controlling of supervisor (0.08) are priority aspects in the success and sustainability of the program. An empirical investigation was performed on three different programs in Indonesia: A, B, and C. Program A (0.81) and C (0.80) have succeeded in improving the beneficiaries’ quality of life to the level of economic resilience, although at a low level of sustainability (76–84.33). On the other hand, program B (0.73) is at the economic reinforcement and has not yet achieved sustainability. This index can be seen as a comprehensive tool for measuring the success and sustainability of the program at several levels.

New insights on social finance research in the sustainable development context

“…As evidence of collaborative endeavors in producing joint studies, Although 811 authors were considered in this study, Figure 10 shows only authors with at least two studies published and one cited. Finance (Hassan et al, 2021a;Hassan et al, 2021b;Herianingrum et al, 2022), the sustainability index , the nexus between Islamic social finance, human resources, governance, and poverty (Widiastuti, Prasetyo, et al, 2022), integration of sustainability in Islamic finance . At this point, it is important to mention that authors from this set of clusters carry out their research mainly in Asia and were mainly formed in 2022.…”

“…Among the most prominent of these is a group of clusters formed by Muneeza, Hassan, Beiki, Widiastuti, and Ascaray, the most relevant authors measured by published studies, as confirmed in Figure 4. The main topics addressed by this group of authors are mainly COVID‐19 and Islamic Social Finance (Hassan et al, 2021a; Hassan et al, 2021b; Herianingrum et al, 2022), the sustainability index (Widiastuti, Robani, et al, 2022), the nexus between Islamic social finance, human resources, governance, and poverty (Widiastuti, Prasetyo, et al, 2022), integration of sustainability in Islamic finance (Widiastuti, Robani, et al, 2022). At this point, it is important to mention that authors from this set of clusters carry out their research mainly in Asia and were mainly formed in 2022.…”

Relationship between Islamic Social Finance and Sustainable Development Goals: A Conceptual Framework

“…Islamic social finance is now starting to be relied upon as a source of funding for social and humanitarian purposes. Considering that Islamic social finance continues to grow, and is proven to be able to overcome various problems [6]. At the world level, Islamic social finance has become a new financial resource in overcoming various social and humanitarian issues such as hunger, poverty, and refugee problems.…”