Abstract
This research's focus is specified to the interlinkages between three concepts, i.e. social cohesion, women's economic empowerment, and mudharabah investments. Instead of microfinancing, this paper explores the possibility of utilizing mudharabah as a tool in uplifting vulnerable societies, especially women and promote social cohesion in the surrounding community. We explore the importance and value that empowering women economically can bring to improving society's cohesiveness and whether mudharabah can be used to achieve this. A case study method was used to highlight existing models used by NGOs to assist vulnerable women. However, existing models are limited to the funds available in the organization and turn; this restricts the aid that the NGO can give out. A mudharabah model would help NGOs outsource funding to individuals and institutions who can contribute capital to women and uplift them from their current economic condition. This paper proposes a two-tier mudharabah structure as an alternative financing model that can be used as a conduit for circulation and distribution of wealth in a society. This structure is financially viable and limits the capital providers' losses to the amount of their contribution.
Highlights
This research's focus is specified to the interlinkages between three concepts, i.e. social cohesion, women's economic empowerment, and mudharabah investments
We propose a two-tier mudharabah model as a sustainable financing tool that social institutions can adopt as an alternative to the currently available microfinancing line of products
This paper explores the potential of mudharabah as a tool to lift and empower vulnerable women and promote social cohesion
Summary
According to Islam, an individual cannot exist without society (Fazlur Rahman, 1980). Profits generated by that enterprise or activity are shared following the percentage specified in the contract, while losses are to be borne solely by the capital provider unless the losses are due to misconduct, negligence or breach of contracted terms". Both the involved parties take on a portion of the risk to share in a mutually agreed and contribution-based, fair manner and not borne by just one of them(Ul Haque & Mirakhor, 1986). It can be argued that similar focus can be applied to enabling women through structured Islamic financial instruments. We provide an overview of two organizations working towards such goals
Sign-in/Register to view highlights & summary Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
