Cash waqf proceeds as sustainable funding for Qard Hasan : a new model for personal financing in Malaysia

Abstract

This study proposes a sustainable personal financing model, the Qarḍ Ḥasan via Cash Waqf (QHCW) model, as a proactive solution to mitigate future economic crises. Grounded in the Theory of Planned Behavior (TPB), it assesses the model’s acceptance by examining respondents’ knowledge, objectives, and perception within the B40 and M40 income groups, who are often excluded from conventional financial services during downturns. The model establishes a structured, interest-free fund sustained through Shari’ah-compliant investments, incorporating standard operating procedures (SOPs) from the Prophetic tradition to encourage reciprocal contributions upon repayment. Following the Dinc Framework, the QHCW fund relies on initial contributions from unaffected individuals, permitting withdrawals only after securing these deposits. Public donations remain open, with all funds allocated to low-risk, Shari’ah -compliant ventures to ensure sustainability and cover administrative costs. A mixed-method research design integrates quantitative survey data from snowball sampling with qualitative insights from open-ended respondent feedback and practitioner interviews, offering a comprehensive evaluation of feasibility, acceptance, and implementation readiness. Empirical findings confirm the QHCW model’s viability, with no Shari’ah compliance concerns identified. As an ethical alternative to interest-based banking, the model provides a sustainable financial safety net, particularly in times of crisis. The study also raises an urgent ethical concern: financial institutions, despite their mandate for economic stability, continue to impose interest during crises, deepening financial hardship. This contradiction underscores the necessity of ethical, interest-free mechanisms. The QHCW model is ready for implementation, presenting a viable, Shari’ah -compliant intervention to strengthen Malaysia’s financial resilience, enhance social welfare, and ensure economic stability in future crises. It offers actionable insights for policymakers, industry stakeholders, and Islamic financial institutions.