Cash Waqf-Based Financing Model As An Inclusive Funding Instrument For The Micro-Economic Sector In Disaster-Affected Areas In Aceh

Abstract

The microeconomic sector in Aceh, particularly in disaster-prone areas such as Aceh Tengah and Pidie Jaya, faces severe financial exclusion and loss of business capital in the aftermath of natural disasters such as earthquakes, tsunamis and flash floods. Conventional post-disaster humanitarian aid is generally temporary and short-term, whilst formal financial institutions impose strict collateral requirements and complex administrative procedures that are difficult for small business owners to meet. This study aims to formulate a modified model of cash waqf-based financing as an inclusive and sustainable alternative funding instrument to accelerate the recovery of micro-enterprises in post-disaster areas. Using a descriptive qualitative literature review method, data was collected from national waqf regulations, scientific publications, and institutional reports, which were subsequently validated by academic experts and waqf practitioners. The research resulted in an integrated development model in which investment surpluses or cash waqf reserves are converted into interest-free revolving business capital (Qardhul Hasan) packaged with structured business mentoring. This model successfully eliminates administrative barriers and collateral requirements. Furthermore, this research emphasises the importance of multi-stakeholder synergy, involving the Aceh Regional Government as a facilitator, Sharia Financial Institutions as professional fund managers, and civil society organisations as community mentors at the grassroots level. Expert validation results recommend the establishment of a disaster risk pooling fund and the adoption of financial technology to effectively mitigate the risk of default from severely affected micro-enterprises.