Indonesia's micro, small and medium enterprises (MSMEs) sector, with over 65 million businesses, is globally the largest. The sector accounts for more than 60 per cent of the country's GDP and employs over 97 per cent of its workforce. Yet, lack of access to finance due to the nature of the business, has constrained development of the sector. This study aims to examine usage of blockchain to aid microfinance and expedite MSMEs' access to finance in Indonesia. Employing qualitative research techniques, the study focuses on Baitul Maal Wa Tamwil's use of blockchain in providing micro sukuk for financing MSMEs. The study finds that using blockchain to offer microfinance services facilitates greater transparency about MSMEs, enables efficiency and accountability in their access to finance. It bridges the gap to MSMEs' access to finance, reduces cost of transactions and mitigates setbacks related to them. As blockchain drives the evolution of enterprises and microfinance institutions in Indonesia, regulatory bodies must stay abreast of these advancements to ensure that innovation progresses in tandem with appropriate regulations. As a learning experience, appropriate governance and legal framework needs to be phased in to accommodate blockchain, its peculiarities, and for it to foster financial access and deepen inclusion.

This research explains and reviews two innovative solutions based on blockchain that were used for Islamic social finance (ISF) projects by two separate companies, namely Finterra and Blossom Finance. Policy implications are suggested for the future use of blockchain in innovative financial products for the Islamic finance industry. This is a qualitative research conducted through library research and semi-structured interviews with experts and founders of Finterra and Blossom Finance. Data obtained from published literature and the interviews were accordingly examined and interpreted through content analysis to present the results in this research. There is rising interest in ISF for economic revival in the aftermath of the COVID-19 pandemic. Innovation through blockchain technology seems to be the future of ISF, hence the need for relevant stakeholders to understand the technology. However, there is a regulatory gap in terms of a proper legal framework to support blockchain-related innovations in ISF and a policy gap in the management of Shari'ah and legal risks involved in ISF transactions. This research is original because it explains unique case studies from the source of innovation itself, analyses the hurdles that were present, and offers recommendations for future use of innovative technology in the Islamic financial sector.

Equity trading through stock markets is a popular avenue for investors to obtain capital gain and profits. However, a much less known stock exchange has also existed in the conventional markets known as the social stock exchange (SSE). Conventional SSE initiatives have been successful among a few conventional economies such as Brazil, Canada, Singapore/Mauritius and recently India. An SSE enables social enterprises that have as their business social and environmental causes to list their projects or instruments for investors to invest in. Unlike for-profit stock exchanges, an SSE’s aim is not monetary gain for the investors but returns in terms of counteracting social upheaval and environmental conservation. In other words, impact investment is the aim of investors. Thus, investors impact the world through their investments in the social enterprises on the exchange. This research examines the prospect of developing a digital Islamic social stock exchange (ISSE) and proposes that Islamic economies can pilot an ISSE to deploy the Shariah vision of philanthropy, investment and sustainability. In expounding this proposal, the research reviewed the SSE of Brazil, Canada, Singapore/Mauritius and India and conducted three in-depth interviews with prominent scholars in this area. While paving the way to enable social enterprises whose goals are social and environmental causes to obtain funding, appropriate exposure and connections, the research neatly situates social stock exchange within the principles of Shariah and ascertains the need for establishing an ISSE. The research accordingly formulated suggestions about requisite legal, regulatory and Shariah elements for establishing a digital ISSE and its operating structures.

This book addresses the growing significance of Islamic social finance as an alternative and sustainable financing approach in the world. With a focus on Malaysia, a global leader in Islamic banking and finance, the topics covered fills the gap in the extant research by providing in-depth coverage of the legal framework surrounding Islamic social finance. Written with students, researchers, and policymakers in mind, it explores the unique features and principles of Islamic social finance, which aims to achieve social objectives alongside financial returns. By examining real-life case studies and digital examples, readers will gain valuable insights into the practical application of Islamic social finance principles. Each chapter concludes with self-review questions, allowing students to assess their understanding and consolidate their knowledge. This book serves as a valuable resource for academics, researchers, and practitioners seeking to explore and implement Islamic social finance principles. With its comprehensive coverage and practical insights, it will will play a crucial role in promoting the understanding and adoption of Islamic social finance for sustainable development.

Sustainable Responsible Investment (SRI) Sukuk are instruments aimed at improving the condition of societies and communities. Sukuk itself are Shari ah compliant alternatives to bonds or technically they are certificates of equal value represent fractional ownership or investment in assets, structured according to Shari ah principles. The Sustainable and Responsible Investment Sukuk Framework was issued by the Securities Commission of Malaysia for Sukuk that funds green projects, social projects or projects that develops waqf (endowment) assets. This note examines the use of Sukuk for more than just commercial gain, this paradigm shift is welcomed and necessary to stay true to the Maqasid al Shari ah (the goals and objectives of Shari ah) to provide ease for people. In this note, two examples of SRI Sukuk namely Sukuk Prihatin (Empathetic Sukuk) and Ihsan Sukuk (Excellence Sukuk) will be examined. The SRI Sukuk focusses on positive social change, while there is a return on investment there is also an additional emphasis on enabling less privileged segments of the society to benefit from the funds provided through the issuance of the Sukuk. The objective of this note is to explain SRI Sukuk framework and examine case studies and provide recommendations for future SRI Sukuk issuances and understand how the Maqasid al Shari ah (the goals and objectives of Shari ah) is being pursued.1 The methodology used in this note is non-doctrinal and document analysis. Secondary sources were reviewed to answer the research objective.

The use of blockchain technology in financing has been based on its high benefits of efficiency and transparency. However, not many in-depth discussions have been done on such blockchain utilization for Islamic social finance or the metaverse. This paper further explores these three areas of blockchain, the metaverse and Islamic social finance by proposing the use of blockchain and the metaverse for social projects of providing education to the underprivileged with the use of Islamic social finance instruments. In fulfilling this objective this research will explain how blockchain technology was applied in Islamic social finance through the case study of Blossom Smart sukuk, thereafter the opportunities for education under Islamic financial principles through blockchain in metaverse will be explored. The authors believe that further innovation in this area would see renaissance in Islamic social finance both in the real world and in metaverse.

This research examines cash waqf-linked sukuk (CWLS) and ascertains its viability in Malaysia under the relevant legal and regulatory frameworks of waqf (Islamic endowment) and sukuk (Islamic investment securities). This is explored with a view to a possible implementation of CWLS in Malaysia by Islamic social and commercial finance institutions. The research adopts a qualitative methodology and uses content analysis in synthesising relevant data to determine the viability and prospects of CWLS in Malaysia. Semi-structured expert interviews were conducted, and data obtained therefrom was analysed alongside published literature on CWLS to identify issues in the applicable waqf and sukuk legal and regulatory frameworks that pertain to CWLS viability. The combination of cash waqf with sukuk is potentially an impactful financing mechanism for mobilising funds whereby charity is linked with productive and income-generating economic activities. CWLS facilitates the development of alternative social financing instruments that expedite social welfare and economic revival in the aftermath of the COVID-19 pandemic, as Indonesia demonstrates. However, Malaysia's waqf legal and regulatory framework have established a decentralised system of waqf administration, which may impede the efficacy of the structure and operations of CWLS in the country. Hence the research proposes a reform of the framework to enable the establishment of a more capable and viable CWLS structure for digital, retail and institutional investors. This research discovers hindrances to the prospect of CWLS in the legal, Shari'ah and regulatory dynamics of waqf and sukuk in Malaysia that previous studies overlooked. This research provides an in-depth understanding of challenges to CWLS' implementation in Malaysia with invaluable insight for regulators, policymakers, practitioners and researchers, thereby contributing to practical knowledge in the area.