The role of Islamic social finance in mitigating the poverty levels in the post-pandemic period

• Main Authors: Hossain, Mohammad Enayet, Mahadi, Nur Farhah, Haron, Razali
• Format: Article
• Language: English
• Published: World Academy of Islamic Management (WAIM) 2023
• Subjects: BPH531 Zakat; HG3368 Islamic Banking and Finance
• Online Access: http://irep.iium.edu.my/107388/7/107388_The%20role%20of%20Islamic%20social%20finance%20in%20mitigating%20the%20poverty%20levels.pdf; http://irep.iium.edu.my/107388/; http://publications.waim.my/index.php/jims/article/view/249/127

The COVID-19 pandemic has rapidly spread throughout the globe, affecting millions of individuals. The COVID-19 pandemic resulted in a significant loss of life, with an estimated five million fatalities occurring over a very short period. The economic impact of COVID-19 may leave many people impoverished. As in the lockdown economy, stores, borders, curfews, and economic activity are shut down, destroying the global economy. The stock markets are falling, industrial output is near nothing, job losses are high, and a financial catastrophe is imminent. Movement restrictions and agricultural product disturbances will reduce food imports and supply. Hence, Islamic financing plays an important role in rebuilding the country after the disastrous effects of the COVID-19 epidemic. The economic crisis has caused worldwide contraction, resulting in an expected economic collapse in 2020–2021. This research explores whether Islamic social finance can successfully minimize the chance of catastrophic emergencies. This paper proposes a multifaceted approach to maximizing the benefits of Islamic social funding methods like zakāt and waqf. The approach used in this study was a systematic literature review, following the principles outlined in the SLR and meta-analyses. The research studies were subjected to qualitative and meta-analytic analysis using Scopus and Google Scholar as the chosen platforms. A total of 173 scholarly papers published between 2015 and 2022 were examined in relation to the subject. In the long run, this might contribute to our understanding of the present Covid-19 situation by focusing on the function represented by Islamic social finance. Our research found that using the Islamic Social Finance Model during the COVID-19 epidemic and economic crisis improved social well-being. Zakāt and ṣadaqah may be paid directly to qualifying recipients. Waqf can finance health facilities and infrastructure, whereas qarḍ al-ḥasan can finance SMEs.