Islamic Social Finance as a Catalyst for Eco-Friendly Community Development: A Qualitative Phenomenological Study

Muhamad Hamdhan Arifin; Tuti Nadifhah

doi:10.61132/iceat.v3i1.244

Authors

Muhamad Hamdhan Arifin Universitas Muhammadiyah Kudus
Tuti Nadifhah Universitas Muhammadiyah Kudus

DOI:

https://doi.org/10.61132/iceat.v3i1.244

Keywords:

Eco Friendly Communities, Environmental Zakat, Green Waqf, Islamic Social Finance, Qualitative Methodology, Thematic Analysis

Abstract

This study explores the capacity of Islamic Social Finance (ISF) instruments, specifically green waqf, dynamic zakat, and targeted sadaqah, to act as strategic catalysts for eco-friendly community development. The central research problem centers on the financial exclusion of grassroots community-led ecological initiatives from conventional commercial banking due to high collateral demands, combined with a persistent conceptual gap in utilizing faith-based social assets for systemic environmental preservation. Adopting a qualitative research paradigm, this study utilizes a phenomenological approach and qualitative content analysis based on semi-structured in-depth interviews with twenty key stakeholders, including Islamic microfinance managers, environmental activists, and local community beneficiaries across institutional green projects. The proposed analytical framework maps thematic dimensions to evaluate operational models, multi-stakeholder integration, and socio-religious driving forces. The main findings reveal that when ecological preservation is embedded as a core tenet of religious stewardship (Khilafah), community-led green initiatives experience heightened trust, organic compliance, and asset permanence. Synthesis of the insights demonstrates that integrating micro-social finance with green infrastructure significantly reduces grassroots resource dependency. Ultimately, this study concludes that institutionalized ISF offers a scalable, trust-anchored alternative to commercial capital, transforming environmental action from a regulatory compliance burden into a community-led spiritual obligation.

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