Waqf-Linked Islamic Fintech Microfinance as a Business Enabler in Post-pandemic Economy: The Experience of Hal Microfinance, Kenya

The COVID-19 pandemic has resulted in economic sufferings of people and small businesses around the world. An innovative Islamic financial solution of waqf-linked Islamic fintech microfinance has been shown to provide an effective funding solution for micro and small businesses affected by the pandemic. This study aims to showcase a fintech-base Islamic microfinance model as a potential source of funding for small and micro businesses by taking the case of Hal Microfinance in Kenya. The present study adopts a qualitative research design based on analysing the literature and examining issued reports. This study concluded that the hybrid shariah-compliant microfinance model studied has a high potential to fund local small and micro businesses in Kenya and assist them during the economic hardship caused by the pandemic. This study is unique in nature as it studies the case of an innovative Islamic micro finance solution that provides funding through a shariah-compliant fintech model based on Wakalah, commodity Murabaha and Qard-Hassan. An enhanced model including Cash-Waqf is suggested to ensure sustainability of the model presented in the case study. As this microfinance initiative responds to financial and social intermediation needs, findings of this study contribute towards enhancing the role of Islamic social finance in contributing towards the economic empowerment, especially in the aftermath of the pandemic era.