PAPUA: International Journal of Sharia Business Management

Optimizing Zakat Governance to Reduce Multidimensional Poverty: Evidence from Indonesian Rural Communities

Moh. Ainur Rosyid — 2025-12-07

This study examines how optimized zakat governance contributes to reducing multidimensional poverty across rural communities in Indonesia. Using a mixed-methods approach combining governance index scoring, household-level poverty metrics, and stakeholder interviews, the research assesses the effectiveness of institutional transparency, digital distribution systems, and beneficiary targeting mechanisms. The findings reveal that zakat institutions with strong governance frameworks particularly those emphasizing accountability, data-driven beneficiary verification, and integrated social programs achieve significantly higher poverty-alleviation outcomes. Enhanced digital platforms accelerate fund disbursement, reduce leakages, and improve alignment between community needs and program design. Moreover, the integration of productive-zakat schemes strengthens livelihood resilience by expanding micro-enterprise capacity and household income stability. The study concludes that optimizing governance is essential for transforming zakat from a charitable transfer into a strategic development instrument, offering empirical evidence relevant for policymakers, Islamic social finance practitioners, and rural development agencies.

Measuring the Efficiency of Islamic Social Finance Integration Models for MSME Empowerment

Nafiah Nafiah — 2025-12-07

This study evaluates the efficiency of Islamic social finance integration models in strengthening Micro, Small, and Medium Enterprises (MSMEs) by combining zakat, waqf, and Islamic microfinance instruments into a unified empowerment framework. Using a multi-stage efficiency measurement approach based on Data Envelopment Analysis (DEA) and supported by institutional performance indicators, the research examines 30 Islamic social finance institutions across key Indonesian regions. Results reveal that integrated models significantly outperform single-instrument schemes in enhancing MSME productivity, capital resilience, and business continuity. Institutions adopting blended financing such as cash-waqf-backed microfinance, productive zakat funds, and revolving qard hasan portfolios achieve higher technical efficiency scores, with several reaching frontier performance. Key determinants of efficiency include governance quality, digital beneficiary assessment, and structured mentoring programs. The study offers empirical evidence that integration not only optimizes resource allocation but also accelerates MSME capability formation. These findings provide relevant policy implications for Islamic social finance regulators and practitioners seeking scalable and sustainable empowerment mechanisms.

Digital Transformation of Waqf Institutions and Its Impact on Financial Sustainability

Anila Dani Sakinah — 2025-12-07

This study examines how digital transformation shapes the financial sustainability of waqf institutions, focusing on the adoption of digital platforms, data management systems, and technology-enabled governance mechanisms. Using a qualitative multiple-case approach supported by institutional reports and interviews, the research explores how digital tools influence fundraising efficiency, transparency, asset management, and long-term financial stability. The findings indicate that digitalization enhances the accuracy of beneficiary databases, accelerates administrative processing, and strengthens accountability through real-time monitoring and traceable transactions. Moreover, technology-based fundraising channels expand donor reach and increase cash-waqf collection, while digital asset management systems improve the utilization and productivity of waqf properties. However, the study also identifies challenges related to digital literacy, cybersecurity risks, and uneven technological readiness among institutions. Overall, the results demonstrate that digital transformation serves as a critical enabler of financial sustainability, provided that waqf institutions align technological adoption with governance reforms and strategic resource management.

The Role of Islamic Microfinance in Strengthening Social Resilience Post-Pandemic

Sahara Sahara — 2025-12-07

This study examines the role of Islamic microfinance in strengthening social resilience among vulnerable communities in the post-pandemic period. Using a mixed qualitative secondary analysis of institutional reports, academic literature, and regulatory documents, the research investigates how Sharia-compliant financing instruments such as qard hasan, profit-sharing schemes, and integrated microenterprise support contribute to income recovery, livelihood stabilization, and community adaptability after COVID-19 disruptions. The findings reveal that Islamic microfinance institutions enhance social resilience by providing accessible capital, flexible repayment structures, and embedded non-financial services, including mentoring, market facilitation, and financial literacy training. These features help micro-entrepreneurs rebuild productive capacity, reduce dependence on high-risk informal lenders, and strengthen household coping mechanisms. The study also identifies governance quality and digital service delivery as key enablers of resilience outcomes. Overall, the results highlight the strategic role of Islamic microfinance as a socio-economic buffer that supports post-crisis recovery and promotes long-term resilience among marginalized groups.

Evaluation of Cash Waqf Linked Sukuk as a Tool for Public Infrastructure Development

Maya Kirana — 2025-12-07

This study evaluates the effectiveness of Cash Waqf Linked Sukuk (CWLS) as an innovative Islamic financial instrument to support public infrastructure development. The analysis explores how CWLS integrates the philanthropic spirit of waqf with the stability of sovereign sukuk to generate sustainable social and economic value. The study investigates governance frameworks, operational mechanisms, risk mitigation strategies, and the distribution of social returns to beneficiaries. It also examines the extent to which CWLS enhances financial inclusion by mobilizing small-scale contributions into productive, long-term infrastructure projects. Empirical evidence highlights CWLS’s potential to reduce government financing burdens, increase community participation, and strengthen the resilience of Islamic social finance. Despite its promising impact, the study identifies several challenges, including limited public awareness, regulatory constraints, and the need for stronger institutional collaboration. Overall, CWLS demonstrates significant potential as a complementary tool for financing essential public infrastructure in a socially responsible and Sharia-compliant manner.