The Role of Islamic Social Finance in Reducing Poverty: A Quantitative Study on Zakat and Waqf

Abstrak

Poverty remains a critical issue in many Muslim-majority countries, affecting economic growth and social stability. Islamic social finance instruments such as zakat and waqf have the potential to alleviate poverty by redistributing wealth and funding social welfare programs. This research aims to examine the role of Islamic social finance, particularly zakat and waqf, in reducing poverty through quantitative analysis. The study uses secondary data from Islamic finance institutions and national poverty statistics, employing statistical methods to measure the impact of zakat and waqf contributions on poverty alleviation. The findings reveal a significant correlation between the amount of zakat and waqf distributed and the reduction in poverty rates, suggesting that these instruments can play a critical role in achieving socio-economic justice. The conclusion highlights the effectiveness of zakat and waqf as tools for addressing poverty and calls for better management and integration of these funds into national development strategies. This research contributes to the growing body of knowledge on Islamic economics and its practical applications in modern society.