Assessing the Integration of Islamic Social Finance Instruments (Zakat, Waqf, and Qard Hasan) in Supporting Sustainable Growth of Food and Textile MSMEs in Nigeria
Keywords:
waqf, food and textile, MSME, qard hasan, zakatAbstract
This study evaluates how well Islamic social finance tools zakat, waqf, and qard ḥasan are incorporated into helping MSMEs in Nigeria's food and textile industries thrive sustainably. Based on the Islamic goals of socio-economic justice and stewardship (khilāfah), the study looks at how these tools support inclusive financing, ecologically friendly practices, and business resilience. A mixed-methods approach was used, which included in-depth interviews with chosen business owners and managers in addition to a structured survey of 140 MSMEs. The results show that just 35% of MSMEs now use energy-efficient technology, but 48% of textile MSMEs and 65% of food MSMEs have implemented waste minimization measures. Nonetheless, a sizable percentage (72%) indicated a great desire to embrace eco-friendly technologies with the help of Islamic social finance methods. Furthermore, 80% of the MSMEs surveyed said they adhered to fair labor standards, which reflects the moral perspective promoted by Islamic finance principles. Positive socio-economic spillover effects were seen at the home level, where patronage of these MSMEs was linked to a 20% decrease in food waste and a 15% decrease in clothing expenditure. The study highlights the important yet untapped potential of qard ḥasan, waqf, and zakat in fostering sustainable MSME development. It promotes specific legislative interventions, such as frameworks for halal sustainability certification, structured waqf-based MSME support programs, and interest-free financing for green technologies. The study comes to the conclusion that successful integration of Islamic social finance tools can promote household welfare, MSME sustainability, and economic growth in Nigeria in accordance with the larger Islamic imperatives of social justice and environmental stewardship.
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Copyright (c) 2025 Adamu Abubakar Muhammad, Usman Jibril Mikail, Rabi Shehu Dalhatu, Shafa'at Ahmad Aliyu, Abubakar Aliyu Yakub
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