Global initiatives and best practices in Islamic social finance

Magda Ismail Abdel Mohsin () and Aishath Muneeza ()

Chapter 8 in Inclusive Finance, 2025, pp 129-155 from Edward Elgar Publishing

Abstract: Islamic social finance provides a transformative framework to address global socio-economic issues by leveraging financial instruments rooted in Shariah principles. This chapter explores how Islamic social finance tools such as zakat, waqf, sadaqah, and qard-hasan contribute to poverty alleviation, education, healthcare, and economic inclusion. These instruments, guided by the principles of equity, justice, and wealth redistribution, align with the global thrust for sustainable development. The chapter emphasises the growing recognition of Islamic social finance by international organisations including the United Nations, World Bank, and the Islamic Development Bank (IsDB). These organisations view Islamic social finance as a complementary mechanism for achieving global development goals such as poverty reduction, environmental sustainability, and resilience-building. The IsDB's role in mobilising Shariah-compliant financial resources for development goals highlights the practical application of Islamic finance in fostering human capital, infrastructure, and economic inclusion. Case studies from Malaysia, Indonesia, Sri Lanka, and Kenya showcase innovative applications of Islamic finance, such as Sukuk Prihatin, cash waqf-linked sukuk, and Sadaqa House Bank Islam. These examples demonstrate how Islamic social finance tools are effectively integrated into local and international development initiatives. The chapter also underscores the role of partnerships and collaborations between Islamic finance and global development institutions in amplifying the impact of these instruments. Through its unique features and ethical approach, Islamic social finance offers a sustainable pathway to address pressing global challenges, positioning itself as a critical component of the global development finance ecosystem.

Keywords: Islamic Social Finance, Zakat; Waqf, Sadaqah, Qard al-Hasan, Poverty Alleviation, Sustainable Development, Shariah Principles, Islamic Development Bank (IsDB), Global Partnerships, Sukuk Prihatin, Cash Waqf Linked Sukuk, Sadaqa House, iTEKAD Initiative, United Nations Sustainable Development Goals (SDGs), Resilience Building (search for similar items in EconPapers)
Date: 2025
ISBN: 9781035348763
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