Economic sustainability for Islamic nanofinance through Waqf-Sukuk linkage program : case study in Indonesia

Abstract EN

This paper argues that sukuk potentially to be an Islamicnanofinance instrument for mobilizing fund to the very micro society.

Further, collaboration sukuk and waqf can be an innovation for economic sustainability, particular to get low cost fund to finance the very micro society without interest rate.

Hence, this paper attempts to: (1) Introduce nanofinance of microfinance institutions in Indonesia; (2) Introduce cooperative sukuk as a local wisdom of microfinance institution in Indonesia to finance the real sector; (3) Propose model of waqf-sukuk linkage program for nanofinance by synergizing Islamic banks, waqf institutions and microfinance institutions to encourage Islamic financial inclusion for the very micro society.