Developing Cash Waqf Model as an Alternative Financing for Social Enterprises to Support Decent Work and Economic Growth in Indonesia

Abstract

Social enterprises have substantially affected Indonesia’s economic growth and may contribute to the Sustainable Development Goals (SDGs’) achievement. Social enterprises empower minority groups by giving greater accessibility to a facility for a sustainable means of livelihood to the low income and disadvantaged groups, which make up a considerable part of the population, thereby creating an inclusive workforce. However, financial issues still pose a challenge for the sustainability of social enterprises in Indonesia due to the awkward reconciliation of their social missions, a characteristic of their businesses, with the less attractive returns for their investors. Cash waqf is one of the Islamic social finance instruments accepted to invest and manage certain funds to solve different social challenges relevant to the SDGs. Hence, this study aims to achieve the following objectives: (i) to identify the current issues of social enterprises; and (ii) to propose an Integrated Cash Waqf Social Enterprise Business (ICWSE-B) model in achieving the SDG8 in Indonesia. This paper adopts a qualitative research method with primary data obtained mainly from interviews. The findings suggest that financing remains the most significant challenge for most social enterprise businesses. The study also introduced an innovative integrated business model of social enterprise and cash waqf known as the ICWSE-B model to solve many social enterprises’ financial issues. The proposed ICWSE-B model is considered most suitable for social enterprise as it supports decent work and economic growth of the SDGs.