Role of Cash Waqf in Islamic Microfinance

Microcredit system is one of proposed solution for accelerating the Investment process and reinforcement of financial foundation and savings in rural areas and rural communities poverty reduction in two past decade. Getting microcredit from commercial banks entails lots of pledges and assurance which poor and low-income people can’t afford them. Hence, these people may turn toward informal financing in the cities and villages. Therefore, establishing Islamic institutions and new methods on microcredit financing would resolve the financial needs of poor and have the shariah framework in financial activities due to making more opportunities for employment, running micro size business and eliminate the poverty in the society. The aim of this paper is to study the cash waqf as an Islamic micro finance source. For this purpose, experiences are provided, specially institutions in the field of providing micro finance. Then potential behavior of cash waqf in microfinance and its results are studied. The results of this research which are based on analytical-descriptive method, shows that there is a potential capacity that cash waqf can be used in the frame work of Islamic finance due to empowering the usury free micro finance and solve the socio-economical problems in society.