Implementation of the Economic Values of Prophet Muhammad in Community Empowerment through the Islamic Financial System
Article Sidebar
Main Article Content
Abstract
This study aimed to apply the economic values of Prophet Muhammad to strengthen community empowerment through the Islamic financial system. The program emphasized ethical financial literacy, interest-free microfinance, and the integration of Zakat and Sadaqah into productive use as a means to achieve social justice and sustainable development. A participatory action research approach was implemented in a Muslim rural community. Activities included workshops on Islamic economic ethics, the establishment of a Qard Hasan (interest-free loan) fund, and coordination of Zakat and Sadaqah distribution for small business support. Data were collected through observation, interviews, and focus group discussions with community members and leaders. Three main findings emerged. (1) Islamic financial literacy and ethical awareness significantly improved, leading to behavioral transformation in financial practices. (2) The Qard Hasan fund effectively supported local microenterprises and achieved a repayment rate above 90%, creating a sustainable cycle of empowerment. (3) The integration of charitable funds for productive purposes enhanced social solidarity, trust, and cooperation within the community. The findings reveal that the practical application of Prophetic economic values can bridge moral principles with real economic empowerment. However, challenges included limited institutional partnerships and short observation periods. These limitations suggest the need for broader implementation and longer-term evaluation. Implementing Islamic financial ethics through community-based mechanisms provides an effective framework for social transformation and inclusive development. Future research should explore long-term impacts, digital financial applications, and cross-community comparisons to strengthen the global relevance of Prophetic economic models.
Downloads
Article Details
Section
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
You are free to:
- Share — copy and redistribute the material in any medium or format for any purpose, even commercially.
- Adapt — remix, transform, and build upon the material for any purpose, even commercially.
- The licensor cannot revoke these freedoms as long as you follow the license terms.
Under the following terms:
- Attribution — You must give appropriate credit , provide a link to the license, and indicate if changes were made . You may do so in any reasonable manner, but not in any way that suggests the licensor endorses you or your use.
- ShareAlike — If you remix, transform, or build upon the material, you must distribute your contributions under the same license as the original.
- No additional restrictions — You may not apply legal terms or technological measures that legally restrict others from doing anything the license permits.
Notices:
You do not have to comply with the license for elements of the material in the public domain or where your use is permitted by an applicable exception or limitation .
No warranties are given. The license may not give you all of the permissions necessary for your intended use. For example, other rights such as publicity, privacy, or moral rights may limit how you use the material.
How to Cite
References
Ahmad, G. N., Widyastuti, U., Susanti, S., & Mukhibad, H. (2020). Determinants of the islamic financial literacy. Accounting, 6(6). https://doi.org/10.5267/j.ac.2020.7.024
Avdukic, A., & Asutay, M. (2025). Testing the development impact of islamic banking: Islamic moral economy approach to development. Economic Systems, 49(2), 101229. https://doi.org/10.1016/j.ecosys.2024.101229
Barkin, D., & Lemus, B. (2014). Rethinking the social and solidarity society in light of community practice. Sustainability (Switzerland), 6(9). https://doi.org/10.3390/su6096432
De Oliveira, B. (2023). Participatory action research as a research approach: advantages, limitations and criticisms. Qualitative Research Journal, 23(3), 287–297. https://doi.org/10.1108/QRJ-08-2022-0101
Forno, F., & Graziano, P. R. (2014). Sustainable community movement organizations. Journal of Consumer Culture, 14(2). https://doi.org/10.1177/1469540514526225
Gibson, N. (2010). Participatory action research approaches and methods. Gateways: International Journal of Community Research and Engagement, 3. https://doi.org/10.5130/ijcre.v3i0.1039
Huda, C. (2016). EKONOMI ISLAM DAN KAPITALISME (Merunut Benih Kapitalisme dalam Ekonomi Islam). Economica: Jurnal Ekonomi Islam, 7(1). https://doi.org/10.21580/economica.2016.7.1.1031
Ibrahim, B. E. D. A. (2022). Interest-free micro-finance without any religious connotation: An inclusive global model. In Research Anthology on Microfinance Services and Roles in Social Progress. https://doi.org/10.4018/978-1-6684-7552-2.ch022
Karim, S., Naeem, M. A., & Abaji, E. E. (2022). Is Islamic FinTech coherent with Islamic banking? A stakeholder’s perspective during COVID-19. Heliyon, 8(9). https://doi.org/10.1016/j.heliyon.2022.e10485
Khan, S. (2022). Islamic Capital Markets—The Structure, Formation and Management of Sukuk. Journal of Muslim Minority Affairs, 42(2). https://doi.org/10.1080/13602004.2022.2110692
Khawar, M. (2024). Economic agency of women in Islamic economic philosophy: going beyond Economic Man and Islamic Man. International Journal of Social Economics, 51(3). https://doi.org/10.1108/IJSE-05-2023-0366
Kusumawati, I. B., Fachrudin, A. D., Indra Putri, R. I., & Zulkardi. (2023). Infusing Islamic financial literacy in mathematics education for Islamic school. Journal on Mathematics Education, 14(1). https://doi.org/10.22342/JME.V14I1.PP19-34
Moosa, R., & Kashiramka, S. (2023). Objectives of Islamic banking, customer satisfaction and customer loyalty: empirical evidence from South Africa. Journal of Islamic Marketing, 14(9). https://doi.org/10.1108/JIMA-01-2022-0007
Nugraha, A. L., Al Hakim, S., Jubaedah, D., Julian, A., & Athoillah, M. A. (2023). Islamic Economic Literacy: A Paradigma Economic Thought In Indonesia. Journal of Islamic Economics and Philanthropy, 6(1). https://doi.org/10.21111/jiep.v6i1.9279
Pamuncak, M. B., Possumah, B. T., & Halim, Z. A. (2022). Integrating zakat and microfinance: A proposed framework. In Research Anthology on Microfinance Services and Roles in Social Progress. https://doi.org/10.4018/978-1-6684-7552-2.ch032
Rudman, H., Bailey-Ross, C., Kendal, J., Mursic, Z., Lloyd, A., Ross, B., & Kendal, R. L. (2018). Multidisciplinary exhibit design in a Science Centre: a participatory action research approach. Educational Action Research, 26(4). https://doi.org/10.1080/09650792.2017.1360786
Sehen Issa, J., Abbaszadeh, M. R., & Salehi, M. (2022). The Impact of Islamic Banking Corporate Governance on Green Banking. Administrative Sciences, 12(4). https://doi.org/10.3390/admsci12040190
Selim, Mohammad. (2021). Opening Qard Hasan accounts as sources and uses of funds and its effects on the market share of Islamic banks. 2021 International Conference on Sustainable Islamic Business and Finance, SIBF 2021. https://doi.org/10.1109/IEEECONF53626.2021.9686353
Selim, Mohammed, Rabbani, M. R., & Bashar, A. (2022). Qard Hasan Based Cooperative Model for Home Financing and Its Effects in Home Ownership and Real Estate Development. 2022 International Conference on Sustainable Islamic Business and Finance, SIBF 2022. https://doi.org/10.1109/SIBF56821.2022.9940024
Sunshine, J., & Tyler, T. (2003). Moral solidarity, identification with the community, and the importance of procedural justice: The police as prototypical representatives of a group’s moral values. In Social Psychology Quarterly (Vol. 66, Issue 2). https://doi.org/10.2307/1519845
Wira, A., Hulwati, Akmal, H., Adif, R. M., & Na’am, J. (2019). Islamic economic orientation model for microfinance institution. Journal of Social Sciences Research, 5(3). https://doi.org/10.32861/jssr.53.676.682
Yaakob, M. A. Z., Suliaman, I., & Khalid, M. M. (2017). The growth of waqf properties through infrastructure development according to al-hadith. Pertanika Journal of Social Sciences and Humanities, 25(February).
Yigitoglu, M., & Goregen, M. (2018). Economic and Commercial Relations of the Prophet Muhammad with the Jews. Afro Eurasian Studies, 7(2). https://doi.org/10.33722/afes.475785
Zakariyah, H., & Abdulrahman, M. M. (2021). Providing Qard Hasan from Zakat Fund for Non-Recipients of Zakat: A Shariah Analysis Study. Al-Rashad Journal of Islamic Finance, 1(3). https://doi.org/10.46722/ajif.1.3.21d
Zakiy, M. (2021). The strategy of Islamic economic colleges to prepare their graduates to work in Islamic banks. Higher Education, Skills and Work-Based Learning, 11(5). https://doi.org/10.1108/HESWBL-01-2021-0010