Review of Islamic Social Finance and Entrepreneurship

Sharia principles in counternarratives of charity-based terrorism financing

Tsabita Afifah Khoirunnisa, Amanah Nurish, Sapto Priyanto — Tue, 31 Mar 2026 00:00:00 +0000

Purpose – This study aims to formulate a sharia-based counternarrative framework to address charity-based terrorism financing while reducing the suspicion and stigmatization of Islamic philanthropic institutions within the Countering the Financing of Terrorism (CFT) regime. It seeks to bridge the gap between terrorism financing scholarship and Islamic philanthropy by offering a normative model that strengthens institutional legitimacy and enables the public to distinguish between credible charitable organizations and high-risk fundraising entities.
Methodology – This qualitative library study draws on academic literature on terrorist financing and Islamic philanthropy, as well as relevant policy and regulatory frameworks in Indonesia. Through conceptual synthesis and normative analysis, the study integrates key Sharia principles governing zakat, infaq, and shadaqah into a structured counternarrative framework.
Findings – The study finds that dominant approaches to countering terrorist financing largely emphasize legal compliance and risk-based regulation, whereas existing counternarrative frameworks—particularly religious moderation—focus on interfaith harmony and ideological tolerance. These approaches inadequately address how humanitarian appeals are exploited in charity-based terrorist financing. To respond to this gap, the paper formulates a normative model grounded in six sharia principles: ukhuwwah, ‘adalah, ri’ayah, maslahah, tawazun, and shumuliyah.
Implications – Embedding these principles within counternarratives can strengthen public trust, reduce the stigmatization of Islamic charities, and support clearer differentiation between legitimate philanthropic institutions and exploitative fundraising entities.
Originality – This study bridges terrorism financing research and Islamic philanthropic ethics by shifting the discourse from securitized compliance toward legitimacy-based counter-narrative construction in the Indonesian context.

Digital-based zakat management from a good governance perspective at BAZNAS Muara Enim

Febriansyah Febriansyah, Rizqi Handayani, Yusuf Rahman, Maswani Maswani — Mon, 06 Apr 2026 00:00:00 +0000

Purpose – This study aims to analyze the role of digital zakat management based on the BAZNAS Management Information System (Sistem Informasi Manajemen BAZNAS, SIMBA) application in strengthening good governance practices at the BAZNAS Muara Enim Regency.
Methodology – This research uses a qualitative approach with a case study method. Data collection techniques included in-depth interviews, observations, and documentation. Data analysis was descriptive-analytical, using a good governance perspective that emphasizes the principles of transparency, accountability, and responsiveness.
Findings – The research results show that the implementation of SIMBA not only functions as an internal administrative and managerial instrument but also serves as a technology-based public governance mechanism. SIMBA contributes to increasing transparency through information disclosure and a digital reporting system, enhancing accountability through integrated and accountable zakat data recording and management, and encouraging the responsiveness of services that are fast and efficient in responding to public information needs and requests. However, SIMBA implementation still faces limitations, particularly related to human resource capacity and digital literacy among service users.
Implications – This research can serve as a reference for zakat institutions by expanding the study of digital-based management from a good governance perspective.
Originality – The research can make a practical contribution to zakat management institutions by optimizing the use of digital systems as an instrument for strengthening governance and improving the quality of public services.

Community-based productive zakat: Evidence from Bengkalis Regency

Mukhlis Mukhlis, Muhammad Romi, Fuadah Johari — Mon, 06 Apr 2026 00:00:00 +0000

Purpose – This study aims to comprehensively analyze the problems, solutions, and strategies in implementing community-based productive zakat at the National Amil Zakat Agency (Badan Amil Zakat Nasional, BAZNAS) Bengkalis to improve the welfare of mustahiq sustainably.
Methodology – This study uses the ANP method with Super Decisions software, which is then analyzed through the supermatrix stage to obtain priority values and agreement values to measure the level of consistency of respondents assessments. The research sample consisted of 11 respondents, including three experts, four academics, and four stakeholders.
Findings – The results show that the muzakki problem cluster is a top priority, with a respondent agreement level of 83.53%, especially related to the practice of individual zakat distribution and low literacy. On the mustahiq side, the main problem lies in the incomplete coverage of zakat recipients and suboptimal business mentoring. From the perspective of zakat management, the lack of professional human resources is the main problem. Priority solutions include optimizing the role of the community, strengthening institutional socialization, and improving monitoring systems. The main recommended strategy is trustworthy and professional management, based on transparency and accountability.
Implications – This study enriches the literature on productive zakat by integrating the perspectives of empowerment and maqasid al-Sharia in the context of coastal and island areas. These findings provide a policy direction for strengthening adaptive, measurable, and sustainable community-based zakat governance.
Originality – The novelty of this research lies in the community-based analysis in an archipelagic region that has been relatively understudied and the use of ANP to identify priority problems, solutions, and strategies systematically and measurably in the context of zakat.

Green waqf crowdfunding model for SDGs: A fiqh al-bi’ah legal framework

Mon, 06 Apr 2026 00:00:00 +0000

Purpose – This study investigates the construction of an integrated green waqf crowdfunding model grounded in fiqh al-bi’ah (Islamic environmental jurisprudence) to accelerate the implementation of sustainable development goals (SDGs) in Indonesia.
Methodology – This study employs a descriptive-qualitative method with a normative-juridical approach. It utilizes maqasid al-Sharia and agency theory to systematically analyze secondary legal materials and extract ecological parameters (hifz al-bi’ah) from classical and contemporary fiqh.
Findings – This study ’s findings suggest that current Islamic social finance models exhibit a social-humanitarian bias and treat Sharia compliance merely as a formal contractual requirement, thereby risking greenwashing. To resolve this, the study proposes a novel tripartite model–collection, management, and distribution–that technically embeds fiqh al-bi’ah as a mandatory screening protocol to ensure substantive ecological justice.
Implications – This research is useful for improving the regulatory framework and governance of digital waqf platforms. Practically, it mitigates agency problems through blockchain-verified eco-impact reporting and recommends an inter-institutional joint ministerial decree (SKB) to establish a binding green waqf taxonomy.
Originality – This study contributes to the global discourse on Islamic social entrepreneurship by synthesizing environmental ethics with fintech architecture. It transforms fiqh al-bi’ah from a mere moral appeal into a verifiable operational algorithm.

Developing a green accountability success index for zakat management organizations

Azwar Azwar, Andi Wawan Mulyawan — Tue, 31 Mar 2026 00:00:00 +0000

Purpose – This study aims to develop the Green Accountability Success Index (GASI) as a standardized measurement instrument to assess the implementation of green accountability in Zakat Management Organizations (ZMOs). The index integrates Sharia principles with global sustainability and accountability frameworks in response to increasing demands for environmentally responsible Islamic social finance governance.
Methodology – A mixed-methods approach was employed, combining qualitative and quantitative techniques. Variables and indicators were developed through a literature review and expert validation, while index weighting and computation used the multi-stage weighted index method to ensure systematic and proportional measurement.
Findings – This study establishes a GASI framework consisting of six core variables: environmentally oriented financial accountability, sustainable governance, environmental awareness and action, mustahiq socio-economic sustainability, Sharia compliance and maqasid al Sharia, and technological innovation for green accountability. The index operates on a 0–1 scale and classifies performance into five levels, grouped into three implementation stages— traditional, developing, and advanced. This framework enables a comprehensive assessment of ZMO performance across zakat collection, distribution–utilization, and reporting activities.
Implications – GASI serves as a practical evaluative tool for practitioners and regulators to design, monitor, and improve sustainable zakat governance, while supporting evidence-based policies that enhance transparency, environmental responsibility, and long-term socio-ecological impact. Academically, it provides a reference framework for future research on sustainability-oriented Islamic accountability.
Originality – This study is among the first to operationalize green accountability in Islamic social finance through an integrated index-based framework, advancing both theory and practice.

AI in enhancing zakat’s role in collection and distribution: A model for digital transformation in Islamic philanthropy

Abdul Wahab, Ilma Mahdiya, Muhammad Hasan Afdhali — Tue, 31 Mar 2026 00:00:00 +0000

Purpose – This study aims to develop a conceptual model for integrating artificial intelligence (AI) into zakat management to enhance the effectiveness of zakat collection and distribution while ensuring sustainability, transparency, and alignment with Sharia principles in the context of digital transformation of Islamic philanthropy.
Methodology – This study adopts a qualitative conceptual approach based on a systematic literature review and theory building. The analytical framework integrates the technology organization environment (TOE), institutional theory, and maqasid al-Sharia approaches to map the relationships among key constructs influencing AI adoption and governance in zakat institutions.
Findings – This study proposes a conceptual model of AI-enabled zakat management, indicating that technological readiness, organizational capabilities, environmental pressures, and institutional legitimacy are critical determinants of successful AI adoption in zakat governance. The findings also highlight that maqasid al-Sharia functions as an ethical anchor, guiding AI utilization toward distributive justice, wealth protection, and social welfare, rather than purely technical efficiency.
Implications – Theoretically, this study expands the literature on digital zakat and values-based digital transformation by positioning AI as an institutional and ethical instrument. Conceptually, this model provides an analytical framework for zakat institutions, regulators, and Sharia technology developers to design legitimate, inclusive, and sustainable digital zakat governance.
Originality – This study offers an original contribution by integrating the TOE framework, institutional theory, and maqasid al-Sharia into a single conceptual model, positioning AI not as a neutral technology but as a socio-technical system that must align with the normative objectives of zakat and Islamic ethics.

Productive zakat, business growth, and mustahiq welfare: Evidence from BAZNAS Malang

Mon, 06 Apr 2026 00:00:00 +0000

Purpose – This study examines the effects of productive zakat and business assistance on mustahiq welfare, with business growth as a mediating variable.
Methodology – This study adopts a quantitative explanatory approach using Partial Least Squares Structural Equation Modeling (SEM-PLS). Data were collected from 100 beneficiaries of the productive zakat program administered by BAZNAS Malang City via structured questionnaires, supplemented by in-depth interviews to provide deeper analytical insights.
Findings – The results indicate that business assistance positively and significantly affects business growth, whereas productive zakat does not. However, productive zakat has a significant indirect effect on mustahiq welfare through the growth of businesses. In contrast, business assistance does not have a significant indirect effect on welfare via business growth. These findings underscore the pivotal role of business growth as a mediating mechanism linking productive zakat to improved mustahiq welfare.
Implications – This study suggests that the effectiveness of mustahiq empowerment programs largely depends on the quality and sustainability of business mentoring, as well as the alignment of zakat-based support with beneficiaries’ actual needs. Accordingly, zakat management institutions are encouraged to strengthen continuous guidance, monitoring, and evaluation mechanisms to ensure sustainable welfare outcomes.
Originality – This study contributes to the zakat literature by empirically integrating productive zakat, business assistance, and business growth within a mediation framework, providing new insights into how zakat-based empowerment programs can effectively enhance mustahiq welfare.

Does qard financing fortify the trust of bank customers? Lessons from Islamic regional banks in Indonesia

Agus Widarjono, Zul Hendri, Mohd Sollehudin Shuib, Yozar Putra Jaya — Tue, 31 Mar 2026 00:00:00 +0000

Purpose – This study investigates the impact of Qard financing on customer trust in Islamic banks in Indonesia using a nonlinear approach.
Methodology – We examine 123 Islamic regional banks (IRBs) from 2016 to 2023 using quarterly data. The estimation method is the dynamic panel regression method using the generalized methods of moments (GMM). The trust of IRBs’ customers is proxied by third-party funds (TPF).
Findings – Moderate Qard financing strengthens customer confidence; however, as it exceeds the optimal level, the effect of Qard financing on TPF becomes negative. More importantly, the results indicate that the positive impact of Qard financing on customer confidence weakens as banks face high liquidity risk.
Implications – First, Qard financing must be conducted in a measurable and optimal manner to avoid risk perceptions that are likely to weaken fund collections. Second, IRBs need to warrant that the expansion of Qard financing is balanced with prudent liquidity management. The Indonesian Financial Services Authority (OJK) likely includes Qard financing as one of the IRB performance indicators.
Originality – Our study is a pioneer in investigating the role of social financing in customer trust using a non-linear approach.

Islamic philanthropy and muzakki trust: Mediation of sustainable economic empowerment in Sungai Penuh

Bustami Bustami, Hariya Toni, Muhammad Hisyam Syafii, Husain Azhari — Mon, 06 Apr 2026 00:00:00 +0000

Purpose – This study examines the influence of Islamic philanthropy on sustainable economic empowerment and investigates the mediating role of muzakki trust in zakat payers in Sungai Penuh, Jambi, Indonesia.
Methodology – A quantitative explanatory design was employed with 160 muzakki recruited through stratified random sampling from the BAZNAS Sungai Penuh registry. Data were analyzed using structural equation modeling (SEM) with IBM AMOS 26.0, incorporating bootstrap mediation analysis with 2,000 resamples.
Findings – The findings demonstrate that Islamic philanthropy significantly enhances sustainable economic empowerment both directly and indirectly through muzakki trusts, highlighting trust as a crucial mediating factor in transforming philanthropic resources into impactful outcomes. A strong relationship between philanthropy and trust underscores the importance of institutional credibility, particularly in terms of integrity and Sharia compliance. While community engagement emerges as a key strength, limited access to resources remains a notable constraint. The results also reveal consistent effects across occupational groups, emphasizing the broad applicability of Islamic social finance and the strategic importance of strengthening trust to achieve effective and sustainable empowerment.
Implications – Zakat institutions must prioritize transparency, Sharia compliance, and accountability as strategic trust-building mechanisms that amplify the transformative impact of Islamic philanthropic resources on community economic empowerment.
Originality – This study pioneers the empirical integration of the theory of planned behavior, social capital theory, and Islamic empowerment theory (tamkin) within a unified structural framework, advancing Islamic social finance scholarship by positioning muzakki trust as a critical institutional bridge between philanthropic inputs and sustainable development outcomes.

Relational marketing strategy of LAZISNU to strengthen muzakki trust

Thu, 02 Apr 2026 00:00:00 +0000

Purpose – This study aims to analyze the relational marketing strategy of the Nahdlatul Ulama Amil Zakat, Infaq, and Sadaqah Institution (Lembaga Amil Zakat, Infak, dan Sedekah Nahdlatul Ulama, LAZISNU) Institute in strengthening muzakki trust in Central Java. The primary focus is on how communication, service quality, transparency, and sociocultural factors contribute to the formation of trust and loyalty among muzakki.
Methodology – This research employs a descriptive qualitative approach and utilizes in-depth interviews, observations, and document analysis at several LAZISNU branches in Central Java. Thematic analysis techniques were used to identify the patterns of relationships and dynamics of muzakki beliefs.
Findings – The research results show that personal communication, responsive service, and transparent reporting are the primary pillars of strengthening muzakki trust. Nahdliyin’s socio-cultural network’s support accelerates the adoption of relational strategies and increases donation loyalty. Community-based strategies have been proven to create emotional closeness, a sense of belonging, and the sustainability of donations.
Implications – Relational strategies reduce digital trust deficits through transparent digital reporting, personalized communication, CRM-based donor tracking, and participatory program monitoring that verifies real social impact.
Originality – This research integrates a relational marketing perspective with NU’s sociocultural studies to develop a new model for understanding the formation of muzakki trust in community-based Islamic philanthropic institutions.