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International Journal of Islamic Business and Economics (IJIBEC)International Journal of Islamic Business and Economics (IJIBEC)

This study addresses the limited attention given to governance mechanism required for implementing the Holding Company Waqf Model for SME financing in Indonesia. It is despite the growing discussion on cash waqf and alternative financing scheme. The study aims to identify and prioritize the governance factors required to support sustainable implementation of the model. Data were collected through in-depth interviews with seven experienced cash waqf managers in Malang during 2024. The ISM procedure involved the development of a Structural Self-Interaction Matrix (SSIM), reachability matrix, level partitioning, and driver-dependence analysis to determine the hierarchical relationships among regular and constant governance variables. The communication demonstrates the highest driving power (7) and functions as a key linkage variable in the governance hierarchy. Subjective norms and attitude toward behavior (driving power – 6 each) function as supporting independent variables. Meanwhile standard operating procedure and waqf legal protection as independent governance variables with strong driving influence. Also, the availability of regular monitoring and cash waqf blueprint model demonstrates high dependence on other governance elements. These results indicate that effective governance requires strong regulatory protection, operational clarity, and continuous supervision to reduce moral hazard and strengthen institutional trust. The novelty of this study lies in the integration of ISM into the governance analysis of the Holding Company Waqf Model, offering a structured governance hierarchy for SME financing implementation in Indonesia. The study also provides a practical governance framework that may support policymakers, waqf institutions, and SME stakeholders in developing sustainable financing mechanisms.

The purpose of this research aims to identify the benefits and drawbacks of implementing the holding company waqf model in SMEs microfinance.The study provides a comprehensive perspective on the implementation of cash waqf management and can serve as a ready reckoner for practitioners.The governance structure identified in this study supports SMEs by improving financing transparency, reducing financing uncertainty, and strengthening sustainable partnership-based financing.The Holding Company Waqf Model can be implemented effectively through strong governance mechanisms, particularly legal protection, standard operating procedures, monitoring systems, and communication.Legal protection protecting both parties contracts need to be established to reduce the risk of SMEs moral hazard not to return loan funds.If these four things have been corrected, then subjective norms, attitude toward behavior, and regular and constant communication will significantly support this new models effectiveness.The identification of benefits and drawbacks of implementing this model has implications for government, policymakers, and waqf management.With the help of waqf management, this strategy can be used to improve business performance while also seeking funding.

To address the challenges and maximize the benefits of the Holding Company Waqf Model for SME financing, several key research directions can be pursued. Firstly, further studies can focus on developing a comprehensive legal framework for waqf governance, ensuring clarity, consistency, and protection for all stakeholders involved. This includes exploring the potential for a standardized set of regulations and guidelines that can be adopted across different waqf institutions and regions. Secondly, research can delve into the operational aspects of the model, aiming to enhance efficiency and effectiveness. This may involve investigating best practices for monitoring and evaluating the performance of SMEs receiving waqf financing, as well as optimizing the processes for fund distribution and management. Lastly, given the importance of communication and stakeholder engagement, future research can explore strategies to enhance communication channels and foster a collaborative environment among waqf managers, donors, volunteers, and SMEs. By addressing these research directions, scholars and practitioners can contribute to the refinement and successful implementation of the Holding Company Waqf Model, ultimately strengthening SME financing and promoting sustainable economic development in Indonesia.

  1. DOI Name 10.28918 Values. name values index type timestamp data serv crossref email support desc prefix... doi.org/10.28918DOI Name 10 28918 Values name values index type timestamp data serv crossref email support desc prefix doi 10 28918
  2. HRMARS - Management Effectiveness in Waqf Institutions in Malaysia: A Literature Review. hrmars management... doi.org/10.6007/IJARBSS/v9-i11/6546HRMARS Management Effectiveness in Waqf Institutions in Malaysia A Literature Review hrmars management doi 10 6007 IJARBSS v9 i11 6546
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