The intention of small and medium enterprises' owners to participate in waqf: the case of Malaysia and Indonesia

Purpose - The purpose of this study is to assess small and medium-sized enterprises (SMEs) owners’ intentions to participate in waqf, involving two countries, which are Malaysia and Indonesia, using the theory of planned behavior. SMEs are the backbone of many economies, representing 95% of all companies worldwide and accounting for 60% of employment. Based on this fact, this paper analyzes the influence of religiosity, knowledge and attitude to predict the intentions of SMEs’ owners in waqf participation in Malaysia and Indonesia. Design/methodology/approach - Data were randomly obtained from 175 SMEs owners from Malaysia and Indonesia with the Statistical Package for the Social Sciences (SPSS) used for analysis. Findings - The empirical analysis data suggest that knowledge and attitude show a significant impact on the intentions of SMEs’ owners to participate in waqf, while religiosity does not have a significant impact on the intentions of Malaysian and Indonesian SMEs’ owners to participate in waqf. Practical implications - This study aims to assist SMEs in Malaysia and Indonesia to formulate appropriate strategies and marketing using waqf for the sustainability of SMEs which represent more than 90% of business establishments in both countries. The strategy is a necessity, especially because the government is targeting to promote a sustainable Islamic financial system, improve governance policy and halal industry for SMEs, strengthen the development of Malay Reserve land, providing as financial independence to higher learning institutions and invest in digitalization and advanced technology through waqf funds. Therefore, both countries should take the initiative to provide training to equip SMEs with extensive knowledge through multiple platforms to further encourage their participation in waqf. Originality/value - Because of the increasing interest in waqf participation both in Malaysia and Indonesia, this study claims three essential contributions. First, it aims to examine the intention of SMEs in waqf participation among the business owners in Malaysia and Indonesia. Second, the study findings are expected to benefit the development of literature in accordance with Islamic social finance, particularly waqf. Third, this study provides an insight into the inclusive knowledge and attitude of SME owners and their intention to participate in waqf.