Productive Waqf and Community Economic Empowerment in Indonesia
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This study examines the role of nazhir governance quality and community waqf literacy in determining the effectiveness of productive waqf for community economic empowerment in Indonesia. Employing a convergent mixed methods design, the study integrates qualitative data from 15 semi-structured interviews with nazhir managers at five major waqf institutions and quantitative data from a cross-sectional survey of 320 beneficiaries across five provinces in Indonesia. The quantitative component employs Partial Least Squares Structural Equation Modeling (PLS-SEM) to test the relationships among nazhir governance quality, waqf literacy, program design quality, and the community welfare index. The qualitative component draws on thematic analysis of interview transcripts. Results indicate that nazhir governance quality and program design quality are significant positive predictors of beneficiary welfare improvement, while waqf literacy exercises a significant moderating effect. Thematic analysis reveals four institutional challenges: limited nazhir professional competence, inadequate legal infrastructure for waqf land certification, low digital integration, and insufficient coordination between the Indonesian Waqf Board (Badan Wakaf Indonesia, BWI) and regional nazhir institutions. The findings carry direct implications for the reform of Law No. 41 of 2004 on Waqf, for BWI regulatory policy, and for the scaling of innovative instruments such as Cash Waqf Linked Sukuk (CWLS) as productive waqf financing vehicles.
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