The potential of waqf-blended finance using crowdfunding in Indonesia
Significant obstacles to the development of Islamic charitable endowment (waqf) in Indonesia include the lack of accountability, limited financing, and mismanagement. One way to remove these obstacles is implementing waqf-blended finance, a newly developed model (therefore unexplored) that int...
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| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
Penerbit Universiti Kebangsaan Malaysia
2023
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| Online Access: | http://journalarticle.ukm.my/23121/1/IJIT_24_7.pdf http://journalarticle.ukm.my/23121/ https://www.ukm.my/ijit/ |
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| Summary: | Significant obstacles to the development of Islamic charitable endowment (waqf) in
Indonesia include the lack of accountability, limited financing, and mismanagement.
One way to remove these obstacles is implementing waqf-blended finance, a newly
developed model (therefore unexplored) that integrates waqf and commercial finance.
The current research aims to explore the potential of crowdfunding for waqf-blended
finance. The underlying assumption is that crowdfunding can help boost waqf
fundraising and resolve liquidity and transparency issues in fund collection and
distribution. Therefore, exploring the application of crowdfunding in waqf blended
finance is essential. Improving waqf-blended financing itself is necessary because it can
ensure project profitability. This study applies a qualitative approach with three stages
of analysis: desk research, semi-structured interviews, and data analysis. The semi
structured interviews aim to discover the current practices of the key stakeholders. The
data collected from the literature review and interviews were analysed to assess the
potential of waqf blended finance concept, build a waqf-blended finance model, and
estimate the model’s implementation challenges. The analysis covers both the external
and internal challenges of waqf development in Indonesia, with the former being
prioritized over the latter due to its more significant influences. The discussion
encompasses the potential of two waqf-blended financing models, emphasising the
critical role of crowdfunding and banks as waqf administrators (nazir). Since this study
is the first to investigate the feasibility of crowdfunding in waqf-blended finance
development in Indonesia, it offers a novel contribution to the field. From the findings,
we propose considerations in the implementation of a waqf-blended financing model in
Indonesia. |
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