Integrating Cash Waqf into Islamic Microfinance: A Sustainable Funding Solution for Economic Development in Bangladesh

Saif Rahman Samrat and Ashiqun Nabi
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Saif Rahman Samrat: Assistant Director, Parashmoni Samajik Unnayan Sangstha.
Ashiqun Nabi: Assistant Professor in Finance, Manarat International University

International Journal of Research and Innovation in Social Science, 2025, vol. 9, issue 2, 4496-4505

Abstract: This paper explores the integration of cash waqf as a sustainable funding mechanism within Islamic Microfinance Institutions (IMFIs) in Bangladesh. Given the country’s pressing economic challenges, including high inflation, liquidity shortages, and rising non-performing loans, this study posits that cash waqf can enhance the financial sustainability of IMFIs while promoting inclusive economic development. A qualitative literature review methodology was employed, focusing on existing research related to cash waqf and Islamic microfinance. The study examined various books, journals, and articles to understand the historical context and modern applications of cash waqf in supporting economic development, particularly in the context of Bangladesh’s financial landscape. The findings suggest that cash waqf can address several challenges faced by IMFIs, including high operational costs, limited access to capital, and financial exclusion of rural populations. By providing a perpetual, low-cost, and Shariah-compliant source of funding, cash waqf can facilitate the provision of interest-free loans and support income-generating activities, particularly in agriculture and small enterprises. The study highlights the need for robust governance frameworks to ensure transparency and accountability. This paper contributes to the discourse on innovative financial solutions within Islamic finance by proposing the integration of cash waqf into the microfinance sector in Bangladesh. It underscores the potential of cash waqf to serve as a transformative tool for poverty alleviation and economic empowerment, offering a pathway for sustainable development that aligns with Islamic principles of equity and social justice. The study calls for collaborative efforts among stakeholders to maximize the benefits of cash waqf, thereby fostering inclusive growth in Bangladesh’s socio-economic landscape.

Date: 2025
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