Challenges in Implementing Mosque-Centred Cash Waqf-Based Micro-Financing Model in Selangor State

Abstract

Economic contribution of Medium, Small and Micro enterprises (MSME) are considered as one of the vital sectors of the nation. Micro enterprises emulate a key role in creating job opportunities for the workforce and significantly contributes to the GDP of the country. Despite being an important force in an economy, micro enterprises experience several issues and challenges in accessing external finance. After consulting key industry stakeholders, a sustainable cash waqf based micro financing model was proposed and developed targeting micro enterprises in Selangor state of Malaysia.  This study attempted to explore the potential regulatory and legal challenges in implementing above proposed model. The study carried out semi structured interviews with 03 practitioners from leading waqf and mosque administrative institutions in Selangor state in Malaysia. The outcomes of the interviews found that, the proposed model is not contradicting with the existing legal and regulatory provisions subject to minor revisions and necessary approval from relevant authorities.  The study outcome highlights the relevance of cash waqf based micro finance institutions and providing necessary training for stakeholders of the proposed model is an important factor for the sustainable adoption. The outcome of this study may enlighten policy makers and waqf administrators for implementing Islamic social financial solutions using waqf assets and provide framework for usage of waqf assets in a sustainable manner.