Islamic social finance in addressing poverty and economic growth: using structural equation modelling

Muhammad, Tijjani and Al-Shaghdari, Fahd Mohammed Obad (2023) Islamic social finance in addressing poverty and economic growth: using structural equation modelling. Journal of Muamalat and Islamic Finance Research, 20 (2). pp. 179-191. ISSN 1823-075X E-ISSN 2948-5266

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Abstract

Islamic social finance is one of the sources of funds in the Islamic economic system. It refers to voluntary philanthropic activities that have a unique presence in Islam. Islamic law is the first to define and regulate Zakat and Waqfs as civil society institutions. Currently, microcredit and microfinance programs are unsuccessful in reducing poverty and income inequality in Northern Nigeria. Islamic social finance institutions are promoting programs such as offering free education, scholarships, free medical care, and orphanage activities around the globe. However, in Nigeria, such Islamic social finance is currently growing slowly. This paper investigates people's perception of reducing poverty and promoting sustainable economic development in Northern Nigeria. The study employed random sampling using Structural Equation Modeling (SEM) for the analysis. Findings indicate the relationship between Waqf and sustainable economic development and Zakat and sustainable economic development as a direct effect. The findings indicated that Waqf and Zakat significantly reduce poverty, and Poverty reduction promotes and enhances sustainable economic development in Northern Nigeria. The study further suggests and recommends that the Northern states, where the majority of the citizens are Muslim, deserve serious consideration for developing Zakat and Waqf institutions in the region to assist in reducing the vulnerable group in society.

Item Type:	Article (Journal)
Uncontrolled Keywords:	Islamic Social Finance, Poverty reduction, Sustainable Economic Development, Northern Nigeria
Subjects:	BPH Islamic Economics > BPH72 Economic development. Growth. Sustainable development. Sustainability
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button):	Institute of Islamic Banking & Finance (IIiBF)
Depositing User:	Dr. Fahd Mohammed Obad Al-shaghdari
Date Deposited:	08 Jan 2024 12:40
Last Modified:	08 Jan 2024 12:40
URI:	http://irep.iium.edu.my/id/eprint/109757

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