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The Significance Of Islamic Social Finance In Stabilising Income For Micro-Entrepreneurs During The Covid-19 Outbreak

Author

Listed:
  • Nik Hadiyan Nik Azman

    (School of Management, Universiti Sains Malaysia, Malaysia)

  • Tajul Ariffin Masron

    (School of Management, Universiti Sains Malaysia, Malaysia)

  • Haslindar Ibrahim

    (School of Management, Universiti Sains Malaysia, Malaysia)

Abstract

The COVID-19 pandemic has heavily impacted micro-entrepreneurs worldwide. Although incentives and assistance funds have been provided by the government, these might only last for three months. The funds can be accessed through Islamic Social Finance (ISF) tools (Zakat, Waqf, Baytulmal, Ar-rahnu). Although ISF mitigates risks by providing fund assistance to micro-entrepreneurs, it is essential to know how far the assistance can support them and help them survive in their business. Therefore, this study intends to investigate the significance of Islamic social finance in stabilising micro-entrepreneurs’ income during the COVID-19 pandemic, using the Partial Least Squares-Structural Equation Modeling (PLS-SEM) method. A survey consisting of 200 questionnaires was distributed to micro-entrepreneurs in three states in Malaysia between June and August 2020. The findings show that ISF has played an essential role in stabilising income among micro-entrepreneurs during the COVID-19 pandemic. Overall, zakat has the most robust, positive relationship with financial stability. This means that it is an essential tool being used by micro-entrepreneurs to stabilise their income during COVID-19.

Suggested Citation

  • Nik Hadiyan Nik Azman & Tajul Ariffin Masron & Haslindar Ibrahim, 2021. "The Significance Of Islamic Social Finance In Stabilising Income For Micro-Entrepreneurs During The Covid-19 Outbreak," Journal of Islamic Monetary Economics and Finance, Bank Indonesia, vol. 7(Special I), pages 115-136, March.
    • Handle: RePEc:idn:jimfjn:v:7:y:2021:i:sid:p:115-136
    DOI: https://doi.org/10.21098/jimf.v7i0.1307
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    Cited by:

    1. Mohd Faiz Mohamed Yusof & Wan Irfan Afifi Wan Mohd Khair & Nurhanani Romli & Azri Bhari & Mohd Ashrof Zaki Yaakob & Mohammad Mahyuddin Khalid & Mohd Yusra Abdullah, 2025. "A Systematic Literature Review for Improving the Development of Agricultural Asnaf Entrepreneurs in Malaysia," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 9(4), pages 6439-6455, April.

    More about this item

    Keywords

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    JEL classification:

    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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