Sharia Economics and Social Sustainability
Main Article Content
Sabiq Syahid Muslim*
This study explores the role of Islamic financial instruments, specifically zakat and waqf, in fostering social sustainability in Indonesia. The research aims to analyse the contribution of productive zakat in poverty alleviation and the role of productive waqf in supporting sustainable social infrastructure. A mixed-methods approach was employed, combining quantitative data from institutional reports and surveys with qualitative insights gathered through interviews and field observations. Quantitative data were analysed using descriptive statistics, while qualitative data were thematically coded to identify key challenges and opportunities. Findings indicate that productive zakat programs increased the income of beneficiaries (mustahik) by an average of 25%–30%, while productive waqf funded the development of essential infrastructure such as schools and health clinics, benefitting thousands. However, the study also highlights significant challenges, including low financial literacy, limited transparency, and inadequate integration of technology in the management of zakat and waqf funds. The study provides theoretical insights into the strategic role of zakat and waqf in achieving Sustainable Development Goals (SDGs) and offers practical recommendations to enhance the effectiveness of these instruments. By addressing current challenges, this research contributes to a more sustainable and inclusive Islamic financial ecosystem, ultimately supporting social development in Indonesia.
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