EXPLORING INSTITUTIONAL CHALLENGES IN THE IMPLEMENTATION OF WAQF-BASED MICROFINANCE IN MALAYSIA

Abstract

This study explores the institutional challenges in implementing waqf-based microfinance in Malaysia. Based on qualitative interviews with seven waqf institutions, the findings reveal barriers such as limited institutional expertise, perceived risks, and repayment uncertainties, as well as the strong public preference for directing waqf toward religious purposes. These constraints restrict the potential of waqf to act as a sustainable financial instrument for micro-entrepreneurs. The study recommends fostering collaboration with established microfinance institutions, adopting risk management mechanisms, and raising public awareness to enhance the viability of waqf-based microfinance.