Mitigating the Effect of Covid-19 on the Society Through the Islamic Social Finance

Abstract

As at the end year of 2019, the Covid-19 pandemic outbreak had caused an unparalleled human crisis around the world. The disease is causing not just a health problem but also economic crisis. Numerous countries fell into meltdown and more people fell into poverty. The government may not be sufficiently able to take the economy back to its track. The concentration has now moved from the spread of the virus to the economic consequences it will bring to the community. The lack of production will lead to the deficiency of supply and therefore will end as loss of employment and jobs for a large number of people around the globe. The most significant sections of our society are SMEs and daily wage will bear the major burn of the crisis. Therefore, Islamic social finance, incorporating zakat and waqf, has to be adopted to address the Covid-19 pandemic crisis. Zakat and waqf are commonly practised in Muslims countries majority. Zakat and waqf function show the possibility and economic advantages of zakat and waqf properties for people’s prosperity. Moreover, zakat and waqf can be utilized to fill financial gaps and can likewise be utilized to create social wellbeing. This study explores the application and potential of zakat and waqf institutions for the social wellbeing of the people and economic development during and after Covid-19 pandemic. The study reviewed past studies on the potential of zakat and waqf as an alternative way for social development and economic growth. The study, therefore, observed that zakat and waqf institutions can improve economic activity through zakat and waqf properties use for various purposes such as health services, infrastructure, SMEs, poverty eradication and education.