Integration of Waqf and Islamic Microfinance for Poverty Reduction: Case Studies of Malaysia, Indonesia, and Bangladesh

This report provides a brief overview of the poverty profile and poverty alleviation programs in Malaysia, Indonesia, and Bangladesh and examines the potential of Waqf as a viable source of financing MFIs. It seeks to develop an Integrated Waqf-based Islamic Microfinance (IWIM) model, which comprises six components: Waqf, Islamic microfinance, human resources, Takaful, project financing, and poverty alleviation. It also validates and tests the model in the three selected countries. The report is based on a survey of 828 respondents from the three countries and focus group sessions involving five to ten participants in order to get feedback from relevant experts on the viability of the IWIM model and the extent of its acceptance for poverty alleviation in Organization of Islamic Cooperation (OIC) countries. The report covers the following sections in detail:

• Poverty in OIC member countries;
• Poverty alleviation programs and policies in Malaysia, Indonesia, and Bangladesh;
• Islamic microfinance institutions in Malaysia, Indonesia, and Bangladesh;
• Rationale for conceptualizing an integrated model;
• Discussion on an IWIM model with a focus on its components;
• Research methodology used for the study;
• Findings with a focus on demographic information, descriptive statistics, and respondents’ perception on the IWIM model;
• Concluding remarks and policy implications.