Islamic social finance emphasises on upholding social welfare, justice and equality. Islamic social finance tools such as zakat, waqf and sadaqah allow for such objectives to be achieved; and hence positively contribute to poverty alleviation, economic empowerment and financial inclusion of targeted communities. In addition, Islamic microfinance has also been introduced to meet the financial needs of unbankable groups of the society.
According to the Islamic Finance News (IFN) Annual Guide 2019, there are about 300 Shariah-compliant financial service providers which offer mudarabah- and qard hasan-based microfinancing instruments, serving around 2.5 million customers worldwide. Nonetheless, most of these institutions are purely Islamic microfinance institutions, non-profit organisations or cooperatives.
Recently, other forms of Islamic microfinance institutions have emerged. I-Taajir (Program Bimbingan Usahawan Tijari – Tijari Entrepreneur Development Programme), which introduces a combined model of providing both Islamic microfinance facilities and entrepreneurship knowledge and skills, is a notable example. The institution is an initiative launched by the Centre of Islamic Economics (CIE) of the International Islamic University of Malaysia (IIUM) in April 2018, in collaboration with the local Islamic bank, CIMB Islamic Bank Berhad which utilises its corporate and social responsibility (CSR) funds to channel the funding.
