ZAKAT AND WAQF AS MEDIATING FACTORS IN POVERTY ALLEVIATION IN DEVELOPING COUNTRIES
Keywords:
Waqf, Zakat, Poverty Alleviation, Islamic Social FinanceAbstract
This study critically explored the poverty alleviation role of Zakat and waqf as mediators in developing countries, considering their institutional effectiveness, governance, and developmental relevance. This study was designed to analyze the operation of Islamic social finance instruments as redistributive and sustainable welfare instruments that can mitigate multidimensional poverty. The study was guided by two goals: to explore the mediating effects of Zakat and waqf in alleviating poverty, and to examine the effects of governance quality, financial inclusion, and institutional trust on the effectiveness of Zakat and waqf. The research method used in this study is a mixed-methods analytical approach, combining quantitative secondary data analysis with a qualitative critical review of the latest literature on Islamic social finance from 2020 to 2025. The quantitative results showed strong positive correlations among waqf institutional efficiency, governance quality, institutional trust, and poverty reduction outcomes. The qualitative results also showed that waqf and Zakat had high development potential. However, their effectiveness was hampered, to some extent, by inadequate governance systems and institutional fragmentation in many developing countries. The study suggested that, with good governance and inclusive financial systems, waqf and Zakat could be sustainable tools for poverty reduction, replacing traditional poverty reduction mechanisms. The study was a timely addition to the current discourse on Islamic development economics, shifting Islamic social finance from a charitable to a structural development approach.
References
1. Abd Aziz, N. A., Sapuan, N. M., Tamyez, P. F. M., & MKom, N. N. S. (2025). The Roles of Waqf in Social Development: A Conceptual Review. Global Business and Management Research, 17(1), 1–11.
2. Abdur-Rauf, I. A., & Ali, E. M. T. E. (2024). Waqf as a Poverty-Alleviating Instrument: Leveraging Shariah Governance Principles for Effective Implementation in Nigeria. TWIST, 19(2), 628–638.
3. Abubaker, R. A., Zakariyah, H., & Al-Shaghdari, F. (2025). The Potential for Micro-Takaful in Sudan: Understanding Public Perception and Adoption Challenges. Journal of Islamic Finance, 14(1), 112–127.
4. Ayub, M., Khan, K., & Ismail, M. (2024). Waqf in Islamic economics and finance: An instrument for socioeconomic welfare. Routledge.
5. Djalaluddin, A., Kholilah, N. D., & Andriani, S. (2023). Actualization of Islamic Social Finance During Disasters: The Covid-19 Pandemic's Lessons In Indonesia. IQTISHODUNA: Jurnal Ekonomi Islam 12(2). 371 – 392.
6. Jalili, I., Firdaus, M., & Fahm, A. O. (2024). The Role of QawÄ'id Fiqhiyyah in Strengthening Waqf Law: A Review of Challenges and Solutions in Indonesia. Al-Qadha: Jurnal Hukum Islam dan Perundang-Undangan, 11(2), 226–250.
7. Kasri, R. A., & Chaerunnisa, S. R. (2022). The role of knowledge, trust, and religiosity in explaining the online cash waqf amongst Muslim millennials. Journal of Islamic Marketing, 13(6), 1334-1350.
8. Khuwarazmi, A., Mulyani, S. S., & Insani, A. M. (2021). Analysis of community cash Waqf intention to support Sustainable Development Goals (SDGS): theory planned behaviour approach. Airlangga International Journal of Islamic Economics and Finance, 4(1), 46–67.
9. Khuwarazmi, A., Mulyani, S. S., & Insani, A. M. (2021). Analysis of community cash Waqf intention to support Sustainable Development Goals (SDGS): theory planned behaviour approach. Airlangga International Journal of Islamic Economics and Finance, 4(1), 46–67.
10. Moumtaz, N. (2021). God’s property. University of California Press.
11. Muhammad, A. A., Barde, K. M., Dalhatu, R. S., & Muhammad, I. A. (2025). Waqf as a Multidimensional Poverty-Alleviation Mechanism in Africa. WAQF Business Review, 1(1, 33–41.
12. Noor, M. S. M., Manaf, M. N., & Zulkafli, Z. (2023). Factor influence the practice of cash WAQF among lecturers. Prof. Dr. Deddy Mulyana, 145.
13. Nurcan, M. (2023). Making of a Sultanic Waqf: Hamidiye Endowments and Its Institutionalization on the Eve of Evkâf-ı Hümâyûn Nezâret (1781-1826) (Doctoral dissertation, Marmara Universitesi (Turkey)).
14. Qomariah, Q., Setiyowati, S. W., & Irianto, M. F. (2024). The Role Of Good Governance In Mediating Literacy, Income And Cash Waqf Decisions. JAS (Jurnal Akuntansi Syariah), 8(1), 101-119.
15. Rahman, M., Palilati, A., Samdin, S., & Syaifuddin, D. T. (2024). Impactful contributions: Sharia banks in advancing agricultural and agribusiness development, empowering MSMEs and enhancing human resources management. Journal of Global Innovations in Agricultural Sciences, 12(2), 503-522.
16. Rahmat, R., & Yaacob, S. E. (2025). Sorotan Literatur Pengurusan Wakaf di Arab Saudi [A Literature Review Waqf Management in Saudi Arabia]. BITARA International Journal of Civilizational Studies and Human Sciences (e-ISSN: 2600-9080), 8(3), 314–326.
17. Sari, A. (2025). Waqf as an Instrument for Poverty Alleviation: Analysis of Roles and Implementation in Developing Countries. International Journal of Contemporary Islamic Thought, 2(1), 103–108.
18. Saujan, I., Rifas, A. H., & Fathima Juhi, M. S. (2024). Fundraising and Zakat distribution in poverty alleviation in Maruthamunai, Sri Lanka: a Maqashid Sharia perspective.
19. Tahiri-Jouti, A. (2022). Financial Instruments and Cash Waqf. Springer Books.
20. Zulkipli, Z., Basit, A., & Wajdi, F. (2025). The strategic role of zakat and waqf in sustainable poverty alleviation: A literature review from the perspective of Islamic economics. Islamic Banking: Jurnal Pemikiran dan Pengembangan Perbankan Syariah, 11(1), 17-32.
