Islamic Microfinance and Rehabilitation Program for the Slum and Floating Population by the Waqf Funds: A Proposal Based on Empirical Evidences for the Muslim Countries

  • Basharat Hossain


The waqf is an Islamic terminology that denotes the “religious bequest for charity purposes.” The main objective of this paper is to present a model to initiate the Islamic Microfinance and rehabilitation program by using the waqf funds for the slum and floating population in the Muslim countries. This paper has been prepared by collecting both primary and secondary data. Primary data were collected from Bangladesh while the secondary data were collected from various national and international sources. This paper suggested that, in addition to zakah and sadaqah; the waqf fund can also be used to introduce the Islamic Microfinance for the slum people and to rehabilitate them because the number of slum population and urban poverty has been growing among the Muslim countries gradually. This model will be executed by founding an independent Waqf Management institution by the joint venture of the government of the respective country and the national as well as International Islamic agency such as the Islamic Development Bank (IDB). Moreover, this model will be implemented through the five stages, these are the revival and registration of the waqf estate, accumulation of fund, initiating the Islamic Microfinance, rehabilitation of the slum people, and forward linkage that may help the slum people to engage and make contribution to the society. Though this model has some shortcomings, it may be a road map for starting the Islamic Microfinance and rehabilitation program by using the waqf funds for the slum and floating population.


  1. Alias, T. A. (2012). Venture Capital Strategies in Waqf Fund Investment and Spending. ISRA International Journal of Islamic Finance, 4(1), 99–126.CrossRefGoogle Scholar
  2. Alpay, S., & Haneef, M. (2015). Integration of Waqf and Islamic Microfinance for Poverty Reduction: Case Studies of Malaysia, Indonesia and Bangladesh. Kuala Lumpur: The Statistical, Economic and Social Research and Training Centre for Islamic Countries (SESRIC) and International Islamic University Malaysia (IIUM). Available at Accessed 22 September 2017.
  3. Alshebami, A., & Rengarajan, D. V. (2017). Microfinance Institutions in Yemen, “Hurdles and Remedies”. International Journal of Social Work, 4(1), 10–21.CrossRefGoogle Scholar
  4. Badruddoza, S. (2011). Microfinance in Bangladesh: Red and Green Lights. Paper Presented at the Department of International Relations, University of Dhaka. Available at Accessed 22 September 2017.
  5. CUS. (2006). Slum of Urban Bangladesh: Mapping and Census 2005 (for USAID), Dhaka: Centre for Urban Studies (CUS), pp. 10–22. Available at Accessed 22 September 2017.
  6. GIFR. (2017). Global Islamic Finance Report (GIFR 2017). Available at Accessed 22 September 2017.
  7. GOB. (2017). Annual Report, Office of the Administrator of Waqf, Government of Bangladesh. Available at…pdf. Accessed 22 September 2017.
  8. Habibollah, S., Hamed, A., & Davoud, N. (2010). Waqf as a Social Entrepreneurship Model in Islam. International Journal of Business and Management, 5(7), 179–186.Google Scholar
  9. Ledgerwood, J. (2000). Microfinance Hand Book: An Institutional and Financial Perspective. Washington, DC, USA: The International Bank for Reconstruction and Development/The World Bank.Google Scholar
  10. Lend with Care. (2015). What Is the Difference Between Microfinance and Microcredit? Available at Accessed 4 May 2017.
  11. Mannan, A. M. (2015). Islamic Microfinance: Bangladesh Experience. Islami Bank Bangladesh Limited. Available at…/Islamic%20Microfinance-Bangladesh%20Experience.pdf. Accessed 20 September 2017.
  12. MCI. (2017).; Microfinance Practitioners; A Profile of Our Providers. Available at Accessed 22 September 2017.
  13. Md Saad, N., & Azizah, A. (2009). Cash Waqf and Islamic Microfinance: Untapped Economic Opportunities. Islam and Civilisational Renewal (ICR), 1(2), 337–354.Google Scholar
  14. MICRA. (2017). The Microfinance Innovation Center for Resources and Alternatives, About Us. Available at Accessed 22 September 2017.
  15. Mohamed Ali, K. (2014). Integrating Zakah, Awqaf and Islamic Microfinance for Poverty Alleviation: Three Models of Islamic Micro Finance (IRTI Working Paper Series, WP# 1435-19). Available at Accessed 22 September 2017.
  16. Mohammad, M. T. S., & Mar Iman, A. H. (2006). Obstacles of the Current Concept of Waqf to the Development of Waqf Properties and the Recommended Alternative. Malaysian Journal of Real Estate, 1(1), 1–95. Available at Accessed 25 October 2017.
  17. MRA. (2017). List of Licensed MFIs as of Sep 12, 2017. Dhaka, Bangladesh: Microfinance Regulatory Authority. Available at Accessed 22 September 2017.
  18. Murphy, J. (2017). 1 Billion Live in Slums. CBS News. Available at Accessed 22 September 2017.
  19. Rashad, D. S. (2014), New Trends in Global Islamic Microfinance. Available at…/new-trends-in-global-islamic-Microfinance.aspx?…true. Accessed 22 September 2017.
  20. Sadegh, B. (2009). Islamic Microfinance, Providing Credit to the Poor: A Case Study of Iran. International Economics Studies, 34(1), 99–107.Google Scholar
  21. The Consultative Group to Assist the Poor. (CGAP). (2017). Islamic Microfinance: An Emerging Market Niche. Available at 470010ENGLISH01PUBLIC10FocusNote149.pdf. Accessed 22 September 2017.
  22. UN-Habitat. (2015). Global Urban Indicators Database 2015. United Nations Human Settlement Program (UN-Habitat). Available at Accessed 22 September 2017.
  23. World Bank. (2017). Global Report on Islamic Finance: A Catalyst for Shared Prosperity? Washington, DC, USA: World Bank. Available at Accessed 22 September 2017.
  24. Worldometers. (2017). Current World Population. Available at Accessed 22 September 2017.
  25. Yunus, M., & Jolis, A. (2006). Banker to the Poor: The Autobiography of Muhammad Yunus, Founder of Grameen Bank (pp. 1–15). London: Oxford University Press.Google Scholar
  26. Zubair Mughal, M. (2017), Funding Sources for Islamic Microfinance Institutions. Available at Accessed 22 September 2017.

Copyright information

© The Author(s) 2019

Authors and Affiliations

  • Basharat Hossain
    • 1
  1. 1.Department of Business AdministrationInternational Islamic University ChittagongChittagongBangladesh

Personalised recommendations