Search results

The purpose of this study was to evaluate the impact of a waqf-based microfinance program on clients’ well-being during the COVID-19 pandemic.

This study obtained primary data from a survey distributed to 282 respondents, consisting of 150 clients and 132 nonclients of the Bank Wakaf Mikro (BWM) Al Kausar in Indonesia. This study constructed a well-being index (WBI) and compared clients’ and nonclients’ WBI before and during the pandemic using the difference-in-differences (DID) method. DID measures the effect of a treatment in a “treatment group” versus a “control group” using data from two periods.

This study found that clients and nonclients alike experienced an increase in well-being throughout the pandemic, but the increase was greater for clients than for nonclients. This study argues that the waqf-based microfinance program run by Bank Waqf Mikro model can assist their clients – as more vulnerable groups in society – to maintain their well-being during the pandemic.

To ensure the effectiveness of waqf-based microfinance programs in diverse settings, this study should include more respondents from different institutions.

This research has several practical recommendations, particularly for integrating Islamic charity for microfinance. The findings of this study suggest that the BWM model, which combines three institutions – the government, zakat groups and Islamic boarding schools (pesantrens) – can play a substantial role in enhancing the welfare of its members during the pandemic.

This study contributes to the body of knowledge on Islamic microfinance by providing empirical evidence of the importance of waqf-based microfinance in reducing the pandemic’s impact on clients well-being.

This study aims at product development in Syariah banking, using the theory of Pyramid of Maslahah. Product development are important aspects of Islamic banking to realize Maqasid Al Shariah and to better serve the real economy.

To understand the needs of the customers, this study uses qualitative approaches and collects primary data from semi-structured interviews of 25 banking customers in Indonesia.

The study found that the group of respondents who have similar characteristics in age, marital status and number of kids tend to have similar financial needs. Some of the needs that have not been fulfilled by Sharia banking are the needs for investment in banking products, the needs for pension plan products and the needs for travelling-related financial products.

This study proposed that Islamic banking should provide financial products that cater to three needs of the society, including the needs for necessities/essentials (daruriyat), the needs of complementary requirements (hajiyyat) and the needs for beautifications or embellishments (tahsiniyat), to be able to better serve the real economy.

Financial needs and the life cycle approach can be used for product development in banking industry. However, this approach has not been widely used for consideration in the development of Sharia banking products in Indonesia. This study provides some novelty in Islamic banking customer behavior, especially in understanding financial needs based on the theory of Pyramid of Maslahah.