Achieving Economic Growth through Islamic Social Finance

Abstract

Islamic Social Finance is deeply rooted in fulfilling the Maqasid Shariah through alleviating the poverty and suffering of the Ummah. Consequently, Islamic Social Finance holds the key to unlocking the door to economic growth and ensuring sustainability. In the pursuit of realizing all three goals of Brunei Darussalam Vision 2035, Islamic Social Finance has the potential to expedite the process of achieving these goals. However, the potential of Islamic Social Finance remains untapped as challenges and issues occur that hinder its development. In the context of nations and regions with a significant Muslim population, this paper analyzes the significance of Islamic social finance to stimulate economic growth. This study aims to clarify the effect of waqf as one of the Islamic social finance tools on economic growth by studying the key features that are essential to their implementation and effectiveness. To establish the theoretical foundations of Islamic social finance and its potential for driving economic growth, this paper employs an extensive literature analysis and creates a framework to identify the key elements within this area of study. To evaluate and analyze the relevant variables and determine their ability to influence the economy, data is collected from a variety of sources. By case study from Indonesia, it provides some suitable recommendations that focus on maximizing the potential of Islamic social finance to support the development of the economy. Hence, this further provides organizations in seeking ways to employ one of the Islamic social finance tools for sustainable and equitable growth with practical insights.