Modified Blended Islamic Social Finance Model for Empowering Underprivileged Communities in Indonesia
DOI:
https://doi.org/10.21580/economica.2026.17.1.31769Keywords:
Blended Finance, Islamic Social Finance, Rural Development, Sustainable Livelihoods, ZakatAbstract
Conventional blended finance uses concessional capital to attract commercial investors, a logic that tends to bypass the poorest. This study investigates how Islamic social finance can be blended differently. Using a qualitative comparative case study on two agricultural empowerment programs managed by the Dompet Dhuafa Foundation, in Wonosoba and Temanggung, Central Java, this study examines how Zakat, Sadaqa and Waqf were blended and the changes in beneficiaries. Data was collected through interviews with 22 informants, field observation and program documents. Data was analyzed using the five livelihood assets of the Sustainable Livelihood Impact Assessment (SLIA) Framework. The testimonies of farmers and staff from both programs indicated a positive change, specifically in the physical, social and financial assets of the groups, through group-owned resources and facilities, effective farmer organizations, and revolving funds. A cross-case analysis, using an existing blended Islamic finance model as the analytical lens, generates six propositions that explain how these changes were achieved. These findings are offered as propositions rather than generalizations. Accordingly, zakat institutions and regulators are encouraged to design blended programs based on allocation rules and to develop clear exit strategies.
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