Islamic Social Finance and its Roles in Developing Islamic Economy in Addressing Various Issues During The Covid-19 Pandemic

Abstract

Islamic Social Finance (ISF) is a Corporate Social Responsibility (CSR) initiative in the form of humanitarian and socio-development programmes. ISF is done through various approaches and structures that are predefined by Syariah Law. Among the main structures in ISF programmes are Zakat, Awqaf, Purification Fund, Sadaqah, Microfinance and Sukuk. Innovative investments in humanitarian action through ISF will not only lead to long-term social improvements, but also to long- term resilience and to adaptive capacity-building for communities at risk. Such investments will empower communities to recover more strongly from shocks as well as facilitate social and economic inclusion within their populations . However, there has been limited study to discover its potential as it is at its nascent stage. The purpose of this study is to investigate how Zakat, Waqf, and Sadaqa can contribute to the development of Islamic Social Finance. This paper also details the role of zakat, waqf and philanthropy on economic development and the impact on social development. This study utilized content analysis to evaluate the issues and challenges of achieving Islamic Social finance goals from the secondary resources. Library methods of study, interviews, documentation and research are used to collect information related to Islamic social finance. Islamic Social Finance is an important area of growth similar to Islamic Finance. The results would provide us an opportunity to further develop the potential of Islamic Social Finance in enhancing the society and wellbeing of the Ummah.