Protecting the Well-Being of Households: Delineating a Social Takāful Fund Initiative for Positive Social Impact

Purpose — This study aims to examine the social takāful fund (STF) initiative, developed by Islamic Business School–Universiti Utara Malaysia (IBS–UUM) in collaboration with FWD Takaful Berhad in Malaysia, as a measure to address economic uncertainties and vulnerabilities by enhancing household well-being. It also analyses the potential impact of the STF on marginalised communities. Design/Methodology/Approach — This study employs a case study method to generate an in-depth understanding of the STF. A semi-structured in-depth interview was conducted with the manager of the STF, and the responses were transcribed and examined based on content and thematic analysis. Findings — The STF initiative is being applied for the benefit of the community in the state of Kedah in Malaysia before it can be extended to all other states in the country. It fosters inclusivity and resilience by pooling resources to provide a safety net for disadvantaged households. The model promotes collective responsibility and has the potential to enhance societal well-being and sustainable development. Utilising the fund for four main programmes (notably, community outreach, educational empowerment, the takāful lab, and takāful subsidy programmes), this initiative addresses economic uncertainties and vulnerabilities especially among the unserved and underserved communities through income improvement, empowering financial knowledge and takāful protection. Originality/Value — This study offers an innovative approach to social finance by introducing an STF model. The initiative is unique in its alignment with Islamic finance and community support principles, providing a new perspective on collective social protection and broadening the scope by positioning takāful as a comprehensive community empowerment strategy. Research Limitations/Implications — The implementation of this model requires further investigation into the regulatory framework for such an initiative and the sustainability of funding sources to ensure long-term impact. Practical Implications — The initiative suggests that community, financial, and government institutions can collaborate effectively to implement and sustain social support programmes, contributing to the overall resilience of vulnerable households. Social Implications — The STF initiative has the potential to create a culture of compassion and mutual support within communities, addressing social disparities and fostering a sense of collective responsibility for well-being.