AN ISLAMIC CROWDFUNDING MODEL FOR THE AGRICULTURAL SECTOR: A PROPOSAL BASED ON SALAM AND MUZĀRAʿAH-WAQF SCHEME

Abstract

Purpose — Agriculture is regarded as one of the most effective areas for alleviating poverty in the Organisation of Islamic Cooperation (OIC) nations. This study’s primary purpose is to present a novel integrated social and commercial financing model known as salam and muzāraʿah crowdfunding waqf (SMCW) model as a fundraising tool or as an alternative funding source for waqf organisations and agriculturalists. Design/Methodology/Approach — This qualitative research analysed the relevant literature on crowdfunding, cash waqf and agriculture, and the Islamic contracts of salam (forward sale) and muzāraʿah (sharecropping). Findings — With the synchronisation of all stakeholders in the agricultural sector, this study is projected to address the issue of inadequate land and funding and to foster innovation and inclusivity in Islamic financial products. The study suggests a practical funding alternative model for farmers that uses waqf institutions, crowdfunding and Islamic banks to alleviate poverty in OIC countries. Originality/Value — The proposed model takes a novel approach to developing a new financing option for farmers by fusing traditional Islamic finance principles with contemporary crowdfunding platforms. It provides an ethical and sustainable financing option based on Islamic values and addresses the issues faced by small farmers in the OIC.Research Limitations/Implications — The proposed research has significant implications for stakeholders in the agricultural sector, the Islamic finance industry, crowdfunding platforms, and Muslim-majority and Muslim-minority countries. It offers a new financing option based on ethical and sustainable principles that can support the expansion and development of the agricultural sector. Thus, this study enriches the literature on waqf, crowdfunding and Islamic financing. Future researchers may examine a model integrating waqf, crowdfunding and Islamic contracts that target other sectors. Practical Implications — The study’s practical benefits stem from its potential to address the problems of inadequate land and funding while fostering innovation and inclusivity in Islamic financial products, ultimately assisting in the reduction of poverty in the agricultural sector in OIC countries. It does this by fusing traditional Islamic finance principles with modern crowdfunding platforms.