Upper-middle-class Muslim characteristics on cash waqf (Islamic endowment) participation for productive purposes: does one-fits-all strategy still works?

Abstract

Purpose To better understand the characteristics of Indonesian Muslims, this study uses cluster analysis to group upper-middle-class Muslims based on psychographic variables related to participation in cash waqf for productive purposes. Design/methodology/approach This study used mixed methods to build and analyse the segmentation of upper-middle-class Muslims towards cash waqf and propose scenarios for a cash waqf model based on the findings. Findings This study identified six clusters for upper-middle-class Muslims related to the participation in cash waqf for productive purposes. All clusters show heterogeneous values of all factors. Although relatively few Muslims perform cash waqf for productive purposes, the high scores for the economic rational, family and community factors indicate great potential for the development of various cash waqf models for investment purposes. The next challenge will lie in reviewing the “one-fits-all strategy” in the development of program, education and socialisation. Based on the findings, this study proposes three scenarios of cash waqf participation: as wakif only (waqf donor), investor only (capital provider) and hybrid participation (waqf donor and capital provider). Research limitations/implications The limitation of this study is the location and object of the sample are only Muslims in Indonesia who are categorised as upper-middle class in terms of their monthly income. Based on this study’s findings, other Muslim-majority countries worldwide have the potential to develop a cash waqf model that is integrated with financial instruments and involves the role of Islamic banking and other Islamic commercial institutions in future research development. Researchers can also attempt to include a simulation or experiment method to construct and validate the proposed cash waqf model based on this study’s findings and to explore other factors that have not been addressed. Practical implications The findings of this study can contribute as a foundation for the development of a cash waqf model and business-marketing strategy to increase the participation of upper-middle-class Muslims. Social implications The findings of this study will support the acceleration of cash waqf collection for investment initiatives, which in turn will have a broader social and economic impact nationally. Originality/value To the best of the authors’ knowledge, this study constitutes the first attempt to specifically investigate upper-middle-class Muslim segmentation toward cash waqf participation for productive purposes. This study’s knowledge is helpful for various stakeholders such as academia, the Islamic banking industry, regulators and the Muslim community about customer segmentation to Islamic banking products and services related to cash waqf.