Towards becoming a global Islamic financial hub, an Islamic-based business framework can be explored and expanded to transform dynamic existing businesses that were incorporated using conventional capitalistic approach into Islamic-based organizations to address the socio-economic injustice within the nation, and consequently to transform the nation into a high income status by creating wealth equitably to the ummah with ethical and moral values. According to Md Saad, Kassim and Kassim (2013), the concept of corporate waqf can be used as an innovation to create wealth through business and corporate efforts to encourage economic growth. The view is waqf corporations can sustain corporate ownership of wealth and resources in the community and hence are able to address leakages and erosion of ownership due to its longevity (Muhammad Ali, 2014).  This study is thus motivated to reexamine the waqf concept in the context of a business environment to transform existing dynamic businesses into Islamic-based business models to enhance business sustainability and wealth creation for the ummah.

This study aims to propose and validate Community-Driven Corporate Waqf  (i-Biz) as a mechanism to enhance business sustainability  towards  Wealth Creation  for the Ummah. Specifically, this study will: 1) Explore public perception on corporate waqf as a mechanism to enhance wealth creation, 2) Investigate the existing corporate waqf practices locally and internationally, 3) Develop a new community-driven corporate waqf model to enhance business sustainability, 4) Explore the feasibility of applying community–driven corporate waqf for government-linked companies (GLCs), 5) Examine the implementation of community-driven corporate waqf toward wealth creation for the ummah, and 6) Develop a corporate waqf business database profiling system for monitoring the performance of intrapreneurs and businesses under the mother corporation to offer development intervention to enhance their performance.

 

While conventional microfinance institutions (MFIs) have expanded their operations in the last two decades, poverty-focused MFIs based on Islamic principles are lagging behind. The existing MFI model focuses only on the aspects of funding (and subsequent collection) and setting up of businesses by entrepreneurs. No intervention is made to link entrepreneurs with suppliers and marketers for their microfinance businesses. As such, many microfinance businesses are suffering from lack of sustainability and could not progress to a higher level, just like the Islamic microfinance institutions (Islamic MFIs), themselves. As a consequence of this particular issue, The Islamic MFIs cannot reach out the poor, as well as it is demanded.  Several research have been conducted investigating reasons of lack of sustainability of the Islamic MFIs (Achraya, 2006; Babandi, 2011, Tapha, 2007). These studies mostly found that lack of sustainability of microfinance institutions is steaming from not having sustainable financial and managerial performance. Interestingly, a new area has recently been raised among the scholars about another reason for lacking sustainability and outreach of microfinance institutions. These particular research found that microfinance institutions with efficient internal control mechanisms are more likely to have better sustainable organizational performance (CGAP, 2013; Campion, 2010). Based on this argument, designing, construction and implementation of efficient internal control system seems to be necessary for Islamic microfinance institutions. As such, its potential benefits like enhancing level of sustainability may lead the Islamic microfinance institutions to serve the clients more efficiently.

Recently, a third sector, comprising non-profit organizations has been identified as a potential main contributor to the national economy.  An economic model that incorporates the third sector together with the public and private sectors is argued to be not only economically viable, but ethically superior, in achieving economic development (Mohd Nahar et. al., 2014).  However, most non-profit organisations in Malaysia rely either on government allocations or public donations for funding.  A sustainable third sector should generate its own funding by establishing social enterprises.  A social enterprise is a business that has both social (creation of jobs) and commercial (profits) goals. However, a social enterprise will participate in social investment where it reinvest its profits back into the enterprise or use them to further the organisation’s social goals, rather than deliver a return to investors. Therefore, the adoption of Islamic–based social investment can provide all-inclusive and complementary initiatives in generating wealth for the nation. However, as non-profit sector is generally less well regulated, there are an array of potential abuse and misappropriations of assets that can arise. Hence, there is a need to develop an accountability and risk management framework and practices in safeguarding the sector and build greater trusts with the relevant stakeholders.

This study will use mixed method of qualitative and quantitative approach. Content analysis of relevant documents, survey, and focus group discussions with relevant stakeholders on selected NPOs will be conducted. The preliminary stage of the study will attempt to address the first and second objectives, which are to examine the current extent of organisational transformation of social entrepreneurial activities by NPOs and also to determine contextual factors influencing the capability and capacity of sustainable SBs by NPOs. Next, the study would further address the third objective as well as addressing the fourth objective; which are to develop a model of Islamic-based sustainable SBs in delivery of social services and to apply the technological innovation for Islamic-based SEs transformation by developing Islamic-based SBs rating system. Preliminary investigation of the current state of Islamic-based practices among TSOs operating as SEs will be explored. Analysis of findings will next lead to the development of Islamic-based sustainable SEs model and the identification of Islamic-based indicators to be used as a basis in the development of SBs Islamic-based rating system (i-SErs) which could assist regulators and publics to quickly assess TSOs operating as SBs on Islamic-based status.

This project also will combine both quantitative and qualitative research methodology and will be carried out in three (3) phases. The current research will be performed based on the gathered data from top two Islamic microfinance institutions (Islamic MFIs) in Malaysia, namely Amanah Ikhtiar Malaysia (AIM) and Tabung Ekonomi Kumpulan Usaha Niaga (TEKUN).

Phase 1 of the current research will be conducted toward getting to know more deeply about the strengths and weaknesses of Islamic MFIs, in particular. To obtain this goal previous body of literature will be investigated to provide a better understanding of the current concept of internal control mechanisms of Islamic MFIs, its measurements (for assessing) and potential consequences of its implementation. Phase 1 will be accomplished by using the gathered information and measurements for designing questionnaires and in-depth interviews to be conducted with the Islamic MFIs’ top management and officers.  

Phase 2 involves examining and then assessing the current (existed) internal control mechanisms as well as level of sustainability of each these top two Islamic microfinance providers. To achieve this objective, first the questionnaires will be distributed among top management level and officers. All the respondents should have two main in common characteristics; they should be aware about the main policies of the organization, they must be from decision makers’ level. Then, using the results of gathered questionnaires, several in-depth interviews with the top management level will be under taken, in order to finalize the assessing procedure.

And finally, the last phase of the research will be directed toward the last analyzing of the determination of the relationship between sustainability of Islamic MFI and implementation of efficient internal control system. Besides, based on the gathered a set of new and appropriate internal control mechanisms will be developed (designing and construction), specifically for microfinance institutions.  

This project also will combine both quantitative and qualitative research methodology and will be carried out in three (3) phases. The current research will be performed based on the gathered data from top two Islamic microfinance institutions (Islamic MFIs) in Malaysia, namely Amanah Ikhtiar Malaysia (AIM) and Tabung Ekonomi Kumpulan Usaha Niaga (TEKUN).

Phase 1 of the current research will be conducted toward getting to know more deeply about the strengths and weaknesses of Islamic MFIs, in particular. To obtain this goal previous body of literature will be investigated to provide a better understanding of the current concept of internal control mechanisms of Islamic MFIs, its measurements (for assessing) and potential consequences of its implementation. Phase 1 will be accomplished by using the gathered information and measurements for designing questionnaires and in-depth interviews to be conducted with the Islamic MFIs’ top management and officers.  

Phase 2 involves examining and then assessing the current (existed) internal control mechanisms as well as level of sustainability of each these top two Islamic microfinance providers. To achieve this objective, first the questionnaires will be distributed among top management level and officers. All the respondents should have two main in common characteristics; they should be aware about the main policies of the organization, they must be from decision makers’ level. Then, using the results of gathered questionnaires, several in-depth interviews with the top management level will be under taken, in order to finalize the assessing procedure.

And finally, the last phase of the research will be directed toward the last analyzing of the determination of the relationship between sustainability of Islamic MFI and implementation of efficient internal control system. Besides, based on the gathered a set of new and appropriate internal control mechanisms will be developed (designing and construction), specifically for microfinance institutions.