Role of public funds in sustaining Islamic microfinance based on Maqasid approach: a case study of Selangor Tabung Masjid

• Main Authors: Zakariyah, Luqman, Mhd. Sarif, Suhaimi, Ahmad H.Osman, Rahmah, Abdul Rahman, Shukran, Mohd Noor, Azman
• Format: Conference or Workshop Item
• Language: English
• Published: 2017
• Subjects: BP140 Islamic law (Fiqh); BP173 Islamic sociology; KBP50 History, development and application of Islamic law
• Online Access: http://irep.iium.edu.my/57860/1/57860_done.pdf; http://irep.iium.edu.my/57860/

Purpose - Mosque fund, known as Tabung Masjid in Malaysia, is one of the revenues in Islam yet to be developed. The proper management of this revenue in all Muslim countries where Tabarru‘āt (voluntary donations) are collected ought to have sustainability capacity on Islamic microfinance. However, managing these funds to bring about the foreseeability remains untapped. This paper aims to assess ways of which Tabung Masjid in Selangor State, Malaysia is managed. Methodology - The paper evaluates the management of TM in Selangor using both questionnaires and semi-structured interview to unveil the current situation of these funds. The sample of 50 respondents consists of key personnel of Tabung Masjid in the state of Selangor. Data obtained from the questionnaire survey was analysed through stepwise regression to determine the role of donation in investment and banking activities among selected TM. Findings - The main findings of this paper are to show that increased amount of donations will result in an increase in the intention toward investment and savings among selected Tabung Masjids. A negative association between monthly donations and savings in bank indicate that higher level of donations collected in a month is spent in operating activities which results in a limited amount of savings. Research Limitations - This study provides preliminary indications that donation has a significant impact on investment and savings among tabung masjids in Malaysia. Future studies are required to identify Islamic investment instruments and the risk management procedure which is beyond the scope of this paper. Practical Implication - The role of these funds in strengthening Islamic microfinance is argued based on the Maqasid Shariah of protection of wealth. The paper suggests a Tabung Hajj prototype of Tabung Masjid as a sustainable drive of Islamic microfinance for empowering Muslims and alleviating poverty. Originality - This study provides evidence on the importance of individual donation as it leads to increased investment and savings among tabung masjids.