DIGITAL ISLAMIC SOCIAL FINANCE AND SUSTAINABLE DEVELOPMENT: A CONCEPTUAL PAPER
DOI:
https://doi.org/10.35631/IJEMP.935025Keywords:
Digital Islamic Social Finance, Zakat, Waqf, Sustainable Development, Maqasid Al-ShariahAbstract
Digitalisation is increasingly being integrated into Islamic social finance, yet the mechanisms through which it may support sustainable development remain conceptually underexplored. Existing studies often examine individual Islamic social finance instruments, specific digital technologies, or their broader links with the Sustainable Development Goals, with limited integration of digitalisation mechanisms, governance conditions, and Maqasid al-Shariah within a single framework. This conceptual study explores how digital Islamic social finance may support sustainable development, identify its main governance and operational challenges, and develop a conceptual framework for strengthening inclusive and sustainable socio-economic outcomes. A qualitative conceptual approach is adopted, involving library-based research and thematic synthesis of relevant literature from 2004 to 2025. The synthesis identifies four mechanisms through which digitalisation may strengthen Islamic social finance: efficiency, transparency and accountability, financial inclusion and outreach, and impact measurement. However, their effectiveness may depend on governance quality, Shariah compliance, digital readiness, and Maqasid al-Shariah orientation. The review also identifies governance fragmentation, cybersecurity and data-privacy risks, digital exclusion, weak digital literacy, and limitations in impact measurement as key challenges. The paper adds to the existing literature through the integration of digitalisation, Islamic social finance, governance, Maqasid al-Shariah, and sustainable development within a single conceptual framework, demonstrating that sustainable socio-economic outcomes depend not on technology adoption alone, but on its integration with appropriate institutional safeguards and welfare-oriented objectives.
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