Islamic Social Entrepreneurship: Entrepreneurship focused on the community empowerment and enhancement – Take the bold step

Social Entrepreneurship (SE) is identified as one of the solutions to societal challenges related to inequality caused by the gap between the rich and the poor. SE practices foster the empowerment of communities in sustainable manners to bring back control at local level and break the mentality of reliance on others.

The Western concept of SE has become a sought-after theme for researchers and the subject of continuing debates in various sectors, recently. The question then arises whether the concept of SE really new to Islam? The book: Waqf (Endowment): A Vehicle for Islamic Social Entrepreneurship”, provides evidence that SE was practiced in the Muslim world even as early as 1400 years ago.

So what is Islamic Social Entrepreneurship (ISE)?

Positioning of ISE

Well it fills the gap in the middle, in between the "Not for Profit" and "For Profit" sectors and enables both Muslims and non-Muslims to achieve social and economic justice. The aim of ISE is not to stop investing in businesses or to stop trading with "for profit " organisations. Neither is the intension to stop giving donations to "Not for Profit" organisations.   For socio-economic development, you need the opposite ends of the spectrums, both the “Not for Profit” and the “for profit” organisations are vital – they both serve a purpose which is essential for the empowerment of communities. ISE was designed to sit in the middle  where there is a vacuum at the moment as the middle is non-existence. It is anticipated that ISE would bridge the gap between the "for profit" and "not for profit".

ISE is based on the rich Islamic tradition and culture of common-good based on the values, norms and beliefs of solidarity and cooperation of sharing assets and resources for creating both profit and social impact.  It gives a platform to solve many of the socio-economic issues challenging today’s communities – both Muslim and the wider non-Muslim communities.

Dimensions of ISE

ISE is the union of three individual concepts: Religion, social and entrepreneurship.
ISE takes into account three dimensions, namely

  •  the spirituality of the Islamic faith,
  • the social aspects of common good and
  • entrepreneurship based on Islamic teachings.

The ISE is designed for the benefit of 3 things, namely,

  • the “socio-economic development”,
  • the “spiritual & social development” and
  • “spiritual and economic development” of the communities.

The  Islamic spiritual dimension was engineered using the concept of tawhid (Unity), fiqh of ibadah (Islamic jurisprudence on devotion) , maqasid al shariah (Objectives of Islamic law), sadaqah jariah (continuous reward). In terms of the social dimension, it was designed utilising the concepts of solidarity in Islam, the concept of tawhid (unity) and Ibn Khaldun’s concept of asabiyyah (social cohesion).  The entrepreneurship dimension was composed based on the fiqh of muamalah (Islamic law on commercial social transaction) , Islamic Gift Economy, the notion of wealth, structure of suq (market) during Prophet Muhammad (SAW)’s time.


Goals of investing in ISE initiatives
Investment strategies play a pivotal role in ensuring that the objectives of the social enterprise are fulfilled. There are many approaches or strategies to engage in ISE practices, all taking into consideration both the social impact and profit creation. The author’s PhD research findings from both the questionnaire survey and semi-structured interviews revealed that the research participants engaged in SE practices provide social impact in terms of community empowerment, poverty alleviation, social justice and sustainability initiatives. It is, therefore, recommended that in combination with profit, the investment approaches of the social enterprise should consider ISE goals as exhibited in the figure below entitled ‘Goals of investing in ISE Initiatives’.

For more knowledge on Islamc Social Entrepreneurship, please refer chapter 4 & 6 of the book entitled: “Waqf (Endowment): A Vehicle for Islamic Social Entrepreneurship”. Please click here for details on the book.

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