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Islamic Social Finance from the Quran and Sunnah Read chapter Read first chapter

2024 | OriginalPaper | Chapter

2. Sadaqah, Zakat and Qard Hassan: Legal Framework

Authors : Sherin Kunhibava, Aishath Muneeza, Maryam Binti Khalid, Zakariya Mustapha, Thong Ming Sen

Published in: Islamic Social Finance

Publisher: Springer Nature Singapore

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Abstract

In this chapter looks into the intricacies of Islamic charitable practices, namely Sadaqah, Zakat, and Qard Hassan. Providing a nuanced overview, the chapter explores the historical and conceptual dimensions of each form of charity, emphasizing their unique roles within the Islamic social finance framework. Drawing distinctions between Sadaqah, Zakat, and Qard Hassan, the chapter navigates through the legal frameworks governing these practices, shedding light on the Shariah injunctions that guide their implementation. Rich with case studies, the chapter illustrates the real-world applications of these charitable concepts, offering insights into their impact on communities. Additionally, the chapter critically examines the issues and challenges that may arise in the context of Sadaqah, Zakat, and Qard Hassan, contributing to a holistic understanding of these essential elements of Islamic social finance.

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previous chapter Islamic Social Finance from the Quran and Sunnah
next chapter Legal Framework for Waqf
Footnotes
1
Abubakar, J., & Aysan, A. F. (2022, October). Research trends in the field of Islamic social finance. In Eurasian Business and Economics Perspectives: Proceedings of the 36th Eurasia Business and Economics Society Conference (pp. 253–268). Cham: Springer International Publishing.
 
2
Ibid.
 
3
Ibid.
 
4
Zauro, N. A., Zauro, N. A., Saad, R. A. J., & Sawandi, N. (2020). Enhancing socio-economic justice and financial inclusion in Nigeria: the role of zakat, Sadaqah and Qardhul Hassan. Journal of Islamic Accounting and Business Research, 11(3), 555–572.
 
5
Emara, N. F. (2003). Islam: ‘A guide for the perplexed’: study and evaluation of an attempt of application: Alleviating poverty in tafahna al-ashraf. (Master's Thesis, American University in Cairo), p. 239.
 
7
Ibid.
 
8
Belleflamme, P. Omrani, N., & Peitz, M. (2015). The Economics of Crowdfunding Platforms. Information Economics and Policy, 3, 11–28. https://​doi.​org/​10.​1016/​j.​infoecopol.​2015.​08.​003.
 
9
MyGovernment, Managing Sadaqah. Available at https://​www.​malaysia.​gov.​my/​portal/​content/​27677.
 
10
Tabung Haji, Terms and Conditions of Sadaqah. Available at https://​www.​tabunghaji.​gov.​my/​en/​terms-and-conditions-sadaqah.
 
11
Kamaruddin, M. I. H., Muhamed, N. A., Radzi, R. M., Nazarie, W. N. F. W. M., & Kamarubahrin, A. F. (2023). Financial management practices in Islamic donation-based crowdfunding (DCF) platforms in Malaysia. Future Business Journal, 9(1), 32.
 
12
Capital Markets Malaysia. (2023, September 20). Digital Equity Crowdfunding (ECF). Capital Markets Malaysia. https://​www.​capitalmarketsma​laysia.​com/​digital-equity-crowdfunding-ecf/​.
 
14
Article 3 (1) of the Malaysian Federal Constitution.
 
15
Central Bank of Malaysia Act 2009.
 
16
Securities Commission Act 1993.
 
17
Labuan Financial Services Authority Act 1996.
 
19
Overview of Development Financial Institutions (DFIs) in Malaysia https://​www.​bnm.​gov.​my/​dfi-overview (1 October 2023).
 
20
BNM’s Qard Policy Document.
 
21
Ibid.
 
22
Ibid.
 
23
Ibid.
 
24
“Wadi’ah Yad Dhamanah means safe keeping with guarantee. It refers to the transaction between the depositor (Customer) and the custodian (Bank) for the safe keeping of the goods or money. The acceptance and continuance of an account may be granted by the Bank subject to the Shariah principles, and upon compliance with the Rules & Regulations under the concept of Wadi’ah Yad Dhamanah by the depositor. The Bank in this situation is guaranteeing the safe keeping of the goods or money and will return the same to the depositor accordingly, subject to the Bank’s procedures.” (extracted from https://​www.​lawinsider.​com/​dictionary/​wadiah-yad-dhamanah).
 
25
Davis, N. (2016, January). What is the fourth industrial revolution. In World Economic Forum (Vol. 19).
 
26
Ali, H., Abdullah, R., & Zaini, M. Z. (2019). Fintech and its potential impact on Islamic banking and finance industry: a case study of Brunei Darussalam and Malaysia. International Journal of Islamic Economics and Finance (IJIEF), 2(1), 73–108.
 
28
New Strait Times. Form Sadaqah house to narrow gap between poor and rich. https://​www.​nst.​com.​my/​news/​2015/​09/​form-sadaqah-house-narrow-gap-between-poor-and-rich (August 12, 2015).
 
29
Ibid.
 
30
Hameed, L. B., dan Nur, A. F. M. S., & Jamaludin, I. (2018). Model SADAQA HOUSE: Menyantuni Kebajikan Ummah. In Proceedings of the 6th International Seminar on Entrepreneurship and Business. ISEB, UMK. (PDF) Model SADAQA HOUSE: Menyantuni Kebajikan Ummah (researchgate. net).
 
31
Karim, N. A., Ab Aziry, N. A., Ridzuan, N. I. M., Jaafar, M. N., & Muhamat, A. A. (2023). Customers’ intention to use digitalized Islamic crowdfunding: the case of Bimb Sadaqa House. Advances in Social Sciences Research Journal, 10(6.2).
 
32
Ibid.
 
34
Eldersevi, S., & Muhammad, M. (2022). Asnaf Care: a case study of the Malaysian-based charity crowdfunding platform to combat the impact of COVID-19.
 
40
Ibid.
 
41
Muneeza, A., & Nadwi, S. (2019). The potential of application of technology-based innovations for zakat administration in India. International Journal of Zakat, 4(2), 87–100.
 
42
Ibid.
 
43
Retnowati, M. S., & Aziz, M. A. (2022). Modern philanthropy model as a mosque economic empowerment strategy: in rice ATM program reviewing from Maqasid Sharia. In Indonesian Conference of Zakat-Proceedings (pp. 239–249).
 
44
Nawai, N. (2021). The implementation of Islamic microfinancing for poverty alleviation in Malaysia.
 
45
Frequently Asked Question Bangkit Microfinance. https://​www.​bankislam.​com/​wp-content/​uploads/​BangKIT-FAQs_​web.​pdf (1 October 2023).
 
46
Ibid.
 
47
Ibid.
 
48
Nawai, N. (2021).
 
49
Razak, D. A., & Dawami, Q. (2020). Achieving Islamic social finance goals through Zakat, Waqf, and Sadaqa in selected countries: issues and challenges.
 
50
Ibid.
 
51
Atia, M. (2011, December). Islamic approaches to development: a case study of Zakat, Sadaqa and Qard al Hassan in Contemporary Egypt. In: 8th International Conference on Islamic Economics and Finance, Center for Islamic Economics and Finance, Qatar Faculty of Islamic Studies, Qatar Foundation.
 
52
Ibid.
 
53
Ibid.
 
54
Ibid.
 
55
Nordin, N., & Zainuddin, Z. (2023). A review of a fintech financing platform: potential and challenges of Islamic crowdfunding to entrepreneurs. International Journal of Islamic Business, 8(1), 79–90.
 
56
Abidin, A. Z., Alwi, N. M., & Ariffin, N. M. (2011). A case study on the implementation of Qardhul Hasan concept as a financing product in Islamic banks in Malaysia. International Journal of Economics, Management and Accounting, 19(3).
 
57
Ibid.
 
58
Satar, N., & Kassim, S. (2020). Issues and challenges in financing the poor: lessons learned from Islamic microfinance institutions. European Journal of Islamic Finance, (15).
 
59
Ibid.
 
60
Ibid.
 
Metadata
Title
Sadaqah, Zakat and Qard Hassan: Legal Framework
Authors
Sherin Kunhibava
Aishath Muneeza
Maryam Binti Khalid
Zakariya Mustapha
Thong Ming Sen
Copyright Year
2024
Publisher
Springer Nature Singapore
Book
Islamic Social Finance

Print ISBN: 978-981-9714-09-4

Electronic ISBN: 978-981-9714-10-0

Copyright Year: 2024

DOI
https://doi.org/10.1007/978-981-97-1410-0_2

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