Evaluating the Role of Productive Waqf in MSME Development and Welfare Enhancement under Maqasid al-Shariah
Keywords:
productive waqf, Islamic fiscal policy, social inequality, maqasid al-shariah, Islamic social finance, Indonesia, poverty reductionAbstract
This study examines the role of productive waqf within Islamic fiscal policy in reducing social inequality in Indonesia. The research is motivated by the gap between the high potential of waqf and its low realization, alongside persistent socio-economic disparities reflected in income inequality, poverty, and uneven regional development. Using maqasid al-shariah and Islamic social finance perspectives, the study analyzes the contribution of productive waqf to inclusive development through poverty reduction, MSME empowerment, and welfare improvement. A quantitative approach was applied using secondary data from the Indonesian Waqf Board and the Central Bureau of Statistics. The analysis combines descriptive trend analysis, panel data regression concepts, and structural equation modeling to examine the relationship between productive waqf, welfare, and socio-economic development. The findings show that productive waqf positively influences MSME growth, employment creation, and access to education and healthcare. However, its effectiveness is limited by governance challenges, including weak nazhir capacity, low transparency, fragmented regulations, and limited digital integration. Regional disparities in institutional capacity also reduce the equal distribution of waqf benefits. The study concludes that productive waqf is a strategic instrument for reducing inequality when effectively managed and integrated into national development planning. Strengthening governance, digital waqf infrastructure, and policy integration is essential to maximize its socio-economic impact in line with maqasid al-shariah principles of justice, welfare, and wealth redistribution.
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