DESIGNING SALAM-MUZARA’AH LINKED WAQF TO FINANCING AGRICULTURAL SECTOR

Rifaldi Majid ()
Additional contact information
Rifaldi Majid: Airlangga University, Indonesia

Journal of Islamic Monetary Economics and Finance, 2021, vol. 7, issue 3, 503-526

Abstract: The main objective of this study is to propose an innovative integrated financing model at the microfinance level for the agricultural sector and how to mitigate the risk associated with the model. In the study, we perform in-depth interviews of experts and gather secondary data from relevant sources. The proposed model is called Salam-Muzara’ahLinked Waqf (SMW) as a sharia-compliant scheme that integrates Islamic commercial finance through the salam and muzara’ah contract with Islamic social finance through the utilization of cash waqf return as well as using the idle waqf land as agricultural lands to be implemented by Baitul Maal wat Tamwil (BMT). In the model, the risk of commodities delivered by farmers to BMT is subsidized or borrowed by Nazhir of waqf land while the surplus of cash waqf is distributed to cover Murabahamargin of necessary agricultural equipment purchased from BMT. This research is expected to solve the problem of limited land and financing as well as to create innovation and inclusiveness of Islamic financial products through the synergy of all parties in the agricultural sector.

Keywords: Integrated financing model; Salam-muzara’ah linked waqf; Baitul maal wat tamwil; Agricultural sector (search for similar items in EconPapers)
JEL-codes: D02 G23 G32 Q14 (search for similar items in EconPapers)
Date: 2021
References: Add references at CitEc
Citations:

Downloads: (external link)
http://jimf-bi.org/index.php/JIMF/article/view/1309/876 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:idn:jimfjn:v:7:y:2021:i:3d:p:503-526

DOI: 10.21098/jimf.v7i3.1309

Access Statistics for this article

Journal of Islamic Monetary Economics and Finance is currently edited by Dr. Ali Sakti

More articles in Journal of Islamic Monetary Economics and Finance from Bank Indonesia Contact information at EDIRC.
Bibliographic data for series maintained by Lutzardo Tobing ( this e-mail address is bad, please contact ) and Jimmy Kathon ().