Waqf as a financial instrument for the development of social enterprises in Pakistan

Abstract

The aim of this research is to develop an understanding of waqf entrepreneurship and social enterprises. We look into different aspects of these entities their operation, fund management and challenges they face. This paper further applies the waqf model under Islamic financing for social enterprises. This research is fundamentally, descriptive, and Qualitative in nature. Sources of information are both primary and secondary. Primary source includes an interview from a youth-led organization operating in Pakistan. The secondary sources include research articles and archival record. The studied established that in Pakistan, social enterprises have no legal status with only few policies that indirectly apply. Some of the financial sources of social enterprises identified are donations, grants, concessional loans. Social enterprises face several issues in Pakistan. These include lack of funding, social recognition, government support and hardships in doing business. Islamic Financial Institutes also have the potential of playing a key role in financing social enterprise. Through the use of Islamic financial instruments like Zakat, Sadaqah, Waqf, Sukuk etc., Islamic financial institutes can alleviate this sector. We particularly look at waqf-based financing for social enterprises.