Risk Management Framework in Zakat-Based Islamic Microfinance

Mahadi, Nur Farhah; Hasan, Aznan; Noor, Azman Mohd; Zakariyah, Habeebullah

Article Details

Risk Management Framework in Zakat-Based Islamic Microfinance

Authors:

Mahadi, Nur Farhah | Hasan, Aznan | Noor, Azman Mohd | Zakariyah, Habeebullah

Publisher:

UIN Kiai Ageng Muhammad Besari Ponorogo

Main Topics:

Religion | Humanities | Economics, Econometrics & Finance | Social Sciences

Journal:

Etihad: Journal of Islamic Banking and Finance Vol.5 Issue 1, pp.0-0

Document Type:

Article

Publication Date:

1/2025

Document Language:

English

Document ID (Org No.):

2001890490

pISSN:

2807-6915

Abstract:

 Introduction: This study explores the potential of utilizing zakat funds or their proceeds for microfinance initiatives by developing a robust risk management framework. The framework aims to ensure prudential use of zakat resources and align with Islamic ethical and operational principles to enhance the effectiveness of zakat-based microfinance in promoting socioeconomic empowerment. Research Methods: A qualitative approach is employed to analyze the use of Islamic financial contracts such as qarḍ ḥasan, muḍarabah, musharakah, salam, and ijarah in managing portfolio risks within zakat-based microfinance institutions. Results: The findings indicate that a structured risk management framework improves the financial stability and accountability of zakat-based microfinance institutions. It provides clear parameters for prudential management and helps safeguard zakat funds against potential losses. Conclusion: This study proposes a practical framework that helps zakat institutions balance financial sustainability with their mission of socioeconomic empowerment, enhancing transparency and resilience in zakat-based microfinance.

Article Details

Risk Management Framework in Zakat-Based Islamic Microfinance

Authors: Mahadi, Nur Farhah | Hasan, Aznan | Noor, Azman Mohd | Zakariyah, Habeebullah

Publisher: UIN Kiai Ageng Muhammad Besari Ponorogo

Main Topics: Religion | Humanities | Economics, Econometrics & Finance | Social Sciences

Journal: Etihad: Journal of Islamic Banking and Finance Vol.5 Issue 1, pp.0-0

Document Type: Article

Publication Date: 1/2025

Document Language: English

Document ID (Org No.): 2001890490

pISSN: 2807-6915

Issues

Authors:

Mahadi, Nur Farhah | Hasan, Aznan | Noor, Azman Mohd | Zakariyah, Habeebullah

Publisher:

UIN Kiai Ageng Muhammad Besari Ponorogo

Main Topics:

Religion | Humanities | Economics, Econometrics & Finance | Social Sciences

Journal:

Etihad: Journal of Islamic Banking and Finance Vol.5 Issue 1, pp.0-0

Document Type:

Article

Publication Date:

1/2025

Document Language:

English

Document ID (Org No.):

2001890490

pISSN:

2807-6915