Blended Islamic Social Finance-Microtakāful Model

Purpose — This research intends to explore and develop a blended Islamic social finance-microtakāful business model by integrating Islamic social finance (ISF) instruments into the microtakāful framework to enhance its effectiveness and reach. The main objective of integrating these elements is to recommend a sustainable and inclusive financial solution that is in line with the principles of Islamic finance and will address the needs of unserved and underserved segments of the population. Design/Methodology/Approach — This study employed desk research to develop a blended ISF-microtakāful model. It involved reviewing literature to assess existing models and best practices, benchmarking their effectiveness, and analysing successful implementation approaches. Insights were used to create a framework integrating Islamic finance tools with microtakāful, followed by recommendations for a sustainable and inclusive financial solution. Findings — The study portrays a conceptualised blended ISF-microtakāful business model which incorporates ISF instruments into the microtakāful model with an illustration of the business case in the context of the pandemic. Originality/Value — Though microtakāful has been accepted as a mode for providing takāful services to low-income individuals, limited research is available on how it can be blended with traditional ISF instruments such as zakat (obligatory alms), ṣadaqah (voluntary charity), and waqf (Islamic endowment). This makes the model proposed in the research novel. The originality of this research lies in its pioneering exploration of the synergies between ISF and microtakāful, opening up new avenues for research and practical implementation in the field of microtakāful.