Challenges and opportunities in Islamic social finance

Magda Ismail Abdel Mohsin () and Aishath Muneeza ()

Chapter 9 in Inclusive Finance, 2025, pp 156-187 from Edward Elgar Publishing

Abstract: Islamic social finance (ISF) has emerged as a pivotal tool for addressing global socio-economic issues through ethical financial instruments such as zakat, sadaqah, waqf, and Islamic microfinance. These tools are designed to promote social justice, alleviate poverty, and empower underprivileged communities. Despite its significant potential, ISF faces challenges, including fragmented regulatory frameworks, operational inefficiencies, and a lack of standardisation. Additionally, there is a need for better integration with global financial systems and improved awareness among stakeholders. However, the growing global focus on sustainability, coupled with advancements in digital technologies, offers substantial opportunities for the growth and expansion of ISF. This chapter explores the challenges of and opportunities for ISF, providing insights into its future potential for contributing to global development goals.

Keywords: Islamic Social Finance; Zakat; Sadaqah; Waqf; Islamic Microfinance; Social Justice; Regulatory Challenges; Operational Inefficiencies; Sustainability; Digital Technologies; Global Development Goals (search for similar items in EconPapers)
Date: 2025
ISBN: 9781035348763
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