Empowering Islamic Social Finance to Reduce the Burden of Covid-19 Destitute: Evidence from Malaysia

  • Md Habibur Rahman Faculty of Business and Management, Universiti Sultan Zainal Abidin
  • Muhammad Izzat Izzuddin Faculty of Business and Management, Universiti Sultan Zainal Abidin (UniSZA)
Keywords: Covid-19, Islamic social finance, Malaysia, Zakat, Waqf


This study intends to explore the role of Islamic social finance initiatives to support COVID-19 destitute in Malaysia. Like everywhere in the world, COVID-19 has left adverse impacts on businesses and individuals in Malaysia. This study explores the role of zakat, waqf, government policies, fintech, Takaful, Sukuk, micro-financing, and Islamic banking to strengthen the impact of Islamic social finance. This is an explorative study, and data are collected from research articles, online newspapers, websites, and other relevant sources. The study found that various stakeholders in Malaysia, including government, zakat agencies, and non-governmental organizations, made substantial contributions by empowering Islamic social finance to reduce the burden of the current pandemic. Besides, by exploring the sources, the study discovered that Islamic banks played a significant role in supporting COVID-19 destitute through Islamic social finance. The study concludes that various components of Islamic social finance have a great potential to combat any emergency like a pandemic in Malaysia and elsewhere. It recommends Islamic social finance can be further enhanced with the help of diverse applications of fintech, such as blockchain technology, e-wallet, digital platform, and so forth.


Download data is not yet available.


Ab Rahman, M.F, Thaidi, H.A.A, Ab Rahman, A, and Ab Rahim, S.F (2020). The Role of Waqf in Combating COVID-19. Journal of Fatwa Management and Research. Retrieved from https://www.researchgate.net/publication/344552481.

Adilla. F and Chan. D. (August 18, 2020). Malaysia launches Sukuk Prihatin, maiden digital Islamic bond. New Straits Times. Retrieved from https://www.nst.com.my/news/government-public-policy/2020/08/617391/malaysia-launches-sukuk-prihatin-maiden-digital-islamic.

Amran. A.M, Rahman. R.A, Syed Yusof. S.N and Mohamed, I.S. (2014). The current practice of Islamic microfinance institutions’ accounting information system via the implementation of mobile banking. Procedia - Social and Behavioral Sciences 145. Pp, 81 – 87. Retrieved from www.sciencedirect.com.

Ab Rahman, A. (2009). Peranan Wakaf Dalam Pembangunan Ekonomi Umat Islam Dan Aplikasinya di Malaysia. Shariah Journal, Vol. 17, No. 1. Pp, 113-152. Retrieved from https://ejournal.um.edu.my.

Basyir, M. (July 3, 2020). Bank Rakyat disburses RM5.4mil to northern region entrepreneurs. New Straits Times. Retrieved from https://www.nst.com.my/business/2020/07/605703/bank-rakyat-disburses-rm54mil-northern-region-entrepreneurs.

Bank Rakyat. (n.d). Targeted Financing Payment Assistance. Retrieved on 7 April 2021. Bank Rakyat website. Retrieved from https://www.bankrakyat.com.my/c/service/financialassistance_COVID19/bantuan_bayaran_pembiayaan_bersasar-3.

Banking. (15 Oct 2020). Maybank introduces social impact deposit under Islamic fixed deposit. New Straits Times. Retrieved from https://www.thestar.com.my/business/business-news/2020/10/15/maybank-launches-ifd-i-to-help-COVID-19-affected-customers.

Bakar, R. (1 April 2020). Mengangkat Wakaf Sebagai Instrumen Penting Ekonomi. Awqaf Holdings Berhad. Retrieved from https://awqaf.com.my/mengangkat-wakaf-sebagai-instrumen-penting-ekonomi/.

Bernama. (Mac 17, 2021). Takaful Ikhlas bantu peserta terjejas COVID-19. BH Online. Retrieved from https://www.bharian.com.my/bisnes/korporat/2021/03/797144/takaful-ikhlas-bantu-peserta-terjejas-COVID-19.

Bernama. (April 9, 2020). GHL, Takaful IKHLAS, Senang tawar pinjaman mikro PKS. BH Online. Retrieved from https://www.bharian.com.my/bisnes/lain-lain/2020/04/675078/ghl-takaful-ikhlas-senang-tawar-pinjaman-mikro-pks.

Berita. (18 August, 2020). Terbitan Sukuk Prihatin hasil semangat rakyat mahu bantu pulihkan ekonomi negara – PM. Prime Minister Office Official Website. Retrieved from https://www.pmo.gov.my/ms/2020/08/terbitan-sukuk-prihatin-hasil-semangat-rakyat-mahu-bantu-pulihkan-ekonomi-negara-pm/.

Baddou, M. (March 22, 2017). What Is Islamic Crowdfunding? Ethis. Retrieved from https://blog.ethis.co/islamic-crowdfunding/.

Bernama. (December 15, 2017). 16,000 asnaf, fakir miskin bakal terima skim insurans takaful. Astro Awani. Retrieved from https://www.astroawani.com/berita-malaysia/16000-asnaf-fakir-miskin-bakal-terima-skim-insurans-takaful-163076.

CFI Education Inc. (n.d). What is Islamic Finance? Retrieved on 1 April 2021. Retrieved from https://corporatefinanceinstitute.com/resources/knowledge/finance/islamic-finance/

Editor Prebiu.com. (November 26, 2020). Bank Islam Perkasa Agenda Kewangan Sosial Islam. Prebiu.com. Retrieved from https://prebiu.com/2020/11/26/bank-islam-perkasa-agenda-kewangan-sosial-islam/

Faiz, F dan Ku Fozi, K.S, (29 November 2020). “NGO, individu tidak mungkin bantu sampai bila-bila’’. Utusan Online. Retrieved from https://www.utusan.com.my/berita/2020/11/ngo-individu-tidak-mungkin-bantu-sampai-bila-bila/.

Ganti, A. (Oct 17, 2020). Sukuk. Retrieved from https://www.investopedia.com/terms/s/sukuk.asp

Hasan, S.B.M. (March 20, 2018). Zakat vs Sadaqah. Retrieved from https://www.globalsadaqah.com/blog/zakat-vs-sadaqah/.

Hambari, Arif, A.A and Zaim, M.A. (2020). The Role of Zakat Institution in Facing COVID-19: A Case Study of the Federal Territory Islamic Council (MAIWP) of Malaysia. International Islamic University Malaysia (IIUM). 4TH International Conference of Zakat Proceedings. Retrieved from https://iconzbaznas.com/submission/index.php/proceedings/article/view/225.

Islamic Relief Worldwide. (n.d). What you need to know about Islamic social finance. Retrieved on 1 April 2021. Retrieved from https://www.islamic-relief.org/islamic-social-finance/

Islamic Relief Worldwide. (n.d). Islamic Microfinance. Retrieved on https://www.islamic-relief.org/category/strategic-business-units/islamic-social-finance-strategic-business-units/islamic-microfinance/.

Islamic Relief Worldwide. (n.d). Takaful (co-operative insurance). Retrieved on 6 April 2021. Retrieved from https://www.islamic-relief.org/category/strategic-business-units/islamic-social-finance-strategic-business-units/takaful-cooperative-insurance/.

Ismail, S. (March 21, 2020). COVID-19: MAIWP lulus zakat tambahan RM12.1j. BH Online. Retrieved from https://www.bharian.com.my/berita/nasional/2020/03/667546/COVID-19-maiwp-lulus-zakat-tambahan-rm121j.

Islamic Relief Worldwide. (n.d). Waqf (Endowment). Retrieved from 6 April 2021. Retrieved from https://www.islamic-relief.org/category/strategic-business-units/islamic-social-finance-strategic-business-units/waqf-endowment/.

Islamic Relief Worldwide. (n.d). Qard Hassan (Benevolent Loan). Retrieved from 6 April 2021. Retrieved from https://www.islamic-relief.org/category/strategic-business-units/islamic-social-finance-strategic-business-units/qard-hassan-benevolent-loan/.

Kaushik, P. (April 29, 2020). Fintech during COVID-19: Formidable challenges and a vital role. Asean today. Retrieved from https://www.aseantoday.com/2020/04/fintech-during-COVID-19-formidable-challenges-and-a-vital-role/?lang=ms.

Kadri.Z, Ahmad. S and Mohd Noor. M.A. (2012). Zakat as A Catalyst to Economics Development: Towards High-Income Country. Persidangan Kebangsaan Ekonomi Malaysia ke VII (PERKEM VII) Transformasi Ekonomi dan Sosial Ke Arah Negara Maju Ipoh, Perak, 4 – 6 Jun 2012. Retrieved from https://www.ukm.my/fep/perkem/pdf/perkemVII/PKEM2012_4E2.pdf.

Liberto, D. (Feb 16, 2021). Zakat. Retrieved from https://www.investopedia.com/terms/z/zakat.asp

Lembaga Zakat Selangor. (1 April 2020). 29,000 penerima bantuan khas COVID-19 lzs terima manfaat agihan zakat. Retrieved from https://www.zakatselangor.com.my/terkini/29000-penerima-bantuan-khas-COVID-19-lzs-terima-manfaat-agihan-zakat/.

Maybank. (12 January 2020). Maybank's COVID-19 Financial Relief Scheme. Maybank Website. Retrieved from https://www.maybank2u.com.my/maybank2u/malaysia/en/personal/announcements/2020/March/announcement_financial_relief_scheme.page.

Mohamad, H.F. (December 13, 2020). Sasar bantu 25,000 peniaga kecil beralih ke digital. BH Online. Retrieved from https://www.bharian.com.my/bisnes/usahawan/2021/03/796448/medac-akan-laksana-86-program-pks.

Mohamad, H.F. (March 24, 2020). COVID-19: Firma takaful tawar pelbagai manfaat bantuan https://www.bharian.com.my/bisnes/lain-lain/2020/03/668695/COVID-19-firma-takaful-tawar-pelbagai-manfaat-bantuan.

Mohamad, M.H. (24 April 2009). Peranan Sedekah Dalam Pembangunan Negara. Utusan Malaysia. Retrieved from http://www.ikim.gov.my/index.php/2009/04/24/peranan-sedekah-dalam-pembangunan-negara/.

Mohamad, H.F. (March 17, 2021). Sukuk Lestari bernilai AS$1 bilion akan dilancar. BH Online. Retrieved from https://www.bharian.com.my/berita/nasional/2021/03/797191/sukuk-lestari-bernilai-as1-bilion-akan-dilancar.

Newsletter. (September 17, 2020) Malaysia’s Innovative ‘People’s’ Sukuk Prihatin Aims to Connect Citizens Contribution to COVID-19 Economic Recovery. Newsletter Articles. Retrived from https://www.ddcap.com/malaysias-innovative-peoples-sukuk-prihatin-aims-to-connect-citizens-contribution-to-COVID-19-economic-recovery/.

Othman, M.I. (04 February 2021). ZPP berjaya agih 96.8 peratus daripada zakat 2020. Retrieved from https://www.sinarharian.com.my/article/122380/EDISI/ZPP-berjaya-agih-968-peratus-daripada-zakat-2020

Parzi, M.N. (November 14, 2020). COVID-19: MAIWP salur bantuan kecemasan RM500. BH Online. Retrieved from https://www.bharian.com.my/berita/nasional/2020/11/754114/COVID-19-maiwp-salur-bantuan-kecemasan-rm500.

Rosli, F.A. (Mac 23, 2020) COVID-19: MEDAC umum 5 langkah bantu golongan terjejas. BH Online. Retrieved from https://www.bharian.com.my/berita/nasional/2020/03/668476/COVID-19-medac-umum-5-langkah-bantu-golongan-terjejas.

Said, R. (February 25, 2021) Komprehensif & bersasar. Metro. Retrieved from https://www.hmetro.com.my/addin/2021/02/677983/komprehensif-bersasar.

Selim. M. (2018). The effectiveness of Qard-al-Hasan (interest free loan) as a tool of monetary policy. International Journal of Islamic and Middle Eastern Finance and Management. Vol. 12 No. 1, pp. 130-151. Retrieved from www.emeraldinsight.com/1753-8394.htm.

Smith, T. (March 18, 2021). Crowdfunding. Investopedia. Retrieved from https://www.investopedia.com/terms/c/crowdfunding.asp.

Speeches. (March 17, 2021). Teks Ucapan Program Strategik Memperkasa Rakyat dan Ekonomi (PEMERKASA). Prime Minister Office Official Website. Retrieved from https://www.pmo.gov.my/2021/03/teks-ucapan-program-strategik-memperkasa-rakyat-dan-ekonomi-pemerkasa.

Solhi, F. (November 7, 2020). 2021 Budget: Takaful industry says B40 insurance coverage crucial. New Straits Times. Retrieved from https://www.nst.com.my/news/nation/2020/11/639061/2021-budget-takaful-industry-says-b40-insurance-coverage-crucial.

Zainuddin, M.Z. (November 18, 2020). Warong Rider bantu penjaja, peniaga kecil tempatan. BH Online. Retrieved from https://www.bharian.com.my/bisnes/usahawan/2020/11/755663/warong-rider-bantu-penjaja-peniaga-kecil-tempatan.

Zainuddin, M.Z. (May 14, 2020). Bank Islam bantu usahawan asnaf, B40 dengan iTEKAD. BH Online. Retrieved from https://www.bharian.com.my/bisnes/korporat/2020/05/688813/bank-islam-bantu-usahawan-asnaf-b40-dengan-itekad.

How to Cite
Rahman, M. H., & Muhammad Izzat Izzuddin. (2022). Empowering Islamic Social Finance to Reduce the Burden of Covid-19 Destitute: Evidence from Malaysia. The Journal of Management Theory and Practice (JMTP), 3(2), 46-54. https://doi.org/10.37231/jmtp.2022.3.2.234
Finance & Economics