Rifaldi Majid, Raditya Sukmana

Research output: Contribution to journalArticlepeer-review


Limited access to financing, followed by the difficulty in the absorption of crop yields, is still a fundamental problem for farmers. This study proposes an integrated agricultural low-cost financing model based on cash waqf along with its parameters and risk mitigation. The proposed model is developed from a literature review underpinned by in-depth interviews with 17 experts (regulators, academia, and practitioners), followed by a Focus Group Discussion, and finally validated by the key experts. Findings reveal that cash waqf fund could be used as a low-cost financing with several risk mitigation procedures to finance farmers who have hardship accessing financing. Through institutional engineering, a nazhir (overseer) will involve a specialist vehicle in developing a value chain to facilitate off-takers ready to buy farmers’ crops at competitive prices. The proposed model employs Mudharaba-Salam and Ijara schemes. The associated risks can be mitigated by a comprehensive feasibility study, using takaful/guarantee or reserve funds and financial restructuring. This model is expected to improve farmer welfare and national food security and deepen inclusive Islamic financial products in the agricultural sector.

Original languageEnglish
Pages (from-to)443-464
Number of pages22
JournalJournal of Islamic Monetary Economics and Finance
Issue number3
Publication statusPublished - 2023


  • Agricultural financing
  • Food security
  • Institutional engineering
  • Waqf


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