From Charity to Enterprise Development: Assessing the Role of Cash Waqf in Financing Micro, Small, and Medium Enterprises in Muslim Societies

Micro, small, and medium enterprises (MSMEs) contribute to employment, household income, and local economic development, yet many entrepreneurs face difficulties obtaining affordable finance, business training, and reliable market access. Cash Waqf offers a potential Islamic social finance mechanism for addressing these constraints while supporting productive economic activity. However, its contribution depends on how endowment capital is managed, which financing arrangements are used, and whether entrepreneurs receive the non-financial support needed to sustain their businesses. This article examines the institutional conditions under which cash Waqf can support enterprise development without compromising capital preservation, Sharia compliance, or financial accountability. Using a qualitative documentary and conceptual approach, it synthesises research on cash Waqf, Islamic microfinance, enterprise development, institutional governance, and financial inclusion. The analysis distinguishes charitable assistance from productive enterprise support and develops a proposed Cash Waqf Enterprise Development Framework comprising capital stewardship, appropriate financing contracts, business-development services, market linkages, and performance accountability. It argues that cash Waqf should not be evaluated solely by the amount of money distributed or the number of entrepreneurs financed. Assessment should also consider business survival, revenue stability, employment creation, beneficiary inclusion, institutional costs, and the protection of endowed capital. The article’s contribution is an integrated institutional framework for comparing Waqf-supported enterprise programmes and identifying the conditions under which they may produce sustainable outcomes. Because no primary field data are analysed, the framework remains a proposition for empirical testing rather than evidence of demonstrated programme impact.