Aimatul Yumna, Joan Marta, Ramel Yanuarta Re
Purpose – The purpose of this study was to evaluate the impact of a waqf-based microfinance program on clients’ well-being during the COVID-19 pandemic. Design/methodology/approach – This study obtained primary data from a survey distributed to 282 respondents, consisting of 150 clients and 132 nonclients of the Bank Wakaf Mikro (BWM) Al Kausar in Indonesia. This study constructed a well-being index (WBI) and compared clients’ and nonclients’ WBI before and during the pandemic using the difference-in-differences (DID) method. DID measures the effect of a treatment in a “treatment group” versus a “control group” using data from two periods. Findings – This study found that clients and nonclients alike experienced an increase in well-being throughout the pandemic, but the increase was greater for clients than for nonclients. This study argues that the waqf-based microfinance program run by Bank Waqf Mikro model can assist their clients – as more vulnerable groups in society – to maintain their well-being during the pandemic. Research limitations/implications – To ensure the effectiveness of waqf-based microfinance programs in diverse settings, this study should include more respondents from different institutions. Practical implications – This research has several practical recommendations, particularly for integrating Islamic charity for microfinance. The findings of this study suggest that the BWM model, which combines three institutions – the government, zakat groups and Islamic boarding schools (pesantrens) – can play a substantial role in enhancing the welfare of its members during the pandemic. Originality/value – This study contributes to the body of knowledge on Islamic microfinance by providing empirical evidence of the importance of waqf-based microfinance in reducing the pandemic’s impact on clients well-being. © 2024 Emerald Publishing Limited
Department of Management, Universitas Negeri Padang, Padang, Indonesia; Department of Economics, Universitas Negeri Padang, Padang, Indonesia; Department of Management, Universitas Negeri Padang, Padang, Indonesia
