The Muamalat Newsletter Vol. 2 2024

FEM eNewsletter | December 2024 45 networks, and in-kind support such as marketing expertise or specialized training. These partnerships help bridge the gap between zakat recipients and broader industry opportunities, fostering long-term sustainability for the businesses involved. Challenges and Recommendations Despite its success, the ISHRAF program faces challenges requiring improvement. One issue is the potential for moral hazards, where the lack of repayment obligations under traditional zakat models may lead to fund misuse or a lack of commitment. Introducing a microfinance model with phased disbursements and accountability measures can address this while adhering to Islamic principles. Another challenge is the reliance on manual reporting mechanisms, which can delay issue identification and progress evaluation. Implementing a digital monitoring system, such as a mobile application, would enable real-time updates, improving transparency and efficiency for all stakeholders. Expandingeligibility criteria to include theM40 group, who often face economic struggles despite being outside the traditional asnaf categories, could broaden the program’s reach. This inclusive approach aligns with the principle of ta’awun (mutual assistance) and opens doors for more individuals with entrepreneurial potential to benefit. Scaling the ISHRAF Program Scaling the program can be achieved by engaging alumni as mentors. Alumni provide relatable guidance, fostering a supportive network and inspiring new participants. Establishing comprehensive impact metrics beyond financial outcomes, such as visibility, ethical practices, and contributions to Sustainable Development Goals (SDGs), can offer a holistic evaluation of success. Additionally, organizing real-world selling opportunities like business exhibitions or product showcases allows participants to engagedirectlywithcustomers. Thispractical exposure builds confidence, strengthens market connections, and enhances the effectiveness of training. These strategies collectively ensure the program’s growth and enduring impact. Conclusion The ISHRAF program illustrates the immense potentialof zakatwhenstrategicallyallocated to entrepreneurial ventures. By integrating financial assistance with structured training, mentorship, and monitoring, the program empowers participants to achieve financial independence and contribute positively to society. This initiative underscores the adaptability of zakat to modern socio- economic challenges, showcasing how Islamic social finance principles can drive sustainable development. This study highlights the importance of innovative zakat distribution models in fostering socio-economic transformation. As the landscape of Islamic social finance evolves, initiatives like ISHRAF provide actionable insights for empowering underserved communities through entrepreneurship, ensuring that zakat remains a tool for enduring positive change.