This paper proposes a conceptual framework integrating blockchain and Artificial Intelligence (AI) to modernize the management of Zakat and Waqf, two foundational instruments of Islamic social finance. These mechanisms aim to address wealth redistribution, poverty alleviation, and socio-economic sustainability, but traditional management practices are hindered by inefficiencies, including lack of transparency, governance challenges, and resource misallocation. By leveraging blockchain’s immutable records and traceability alongside AI’s predictive modelling and resource optimization, this paper introduces a theoretical model that enhances accountability, operational efficiency, and socio-economic impact. Grounded in Islamic finance principles, particularly Maqasid al-Shariah, this framework seeks to promote ethical, equitable practices through innovative technologies. The proposed model, with its potential for piloting in Malaysia, known for its leadership in Islamic finance offers a starting point for theoretical exploration into how blockchain and AI can be integrated into Zakat and Waqf systems. By addressing key challenges such as delayed disbursements, underutilized Waqf assets, and donor mistrust, this conceptual framework provides a theoretical solution that aims to improve governance, operational efficiency, and resource allocation. Aligned with the principles of social justice, transparency, and financial inclusion, this framework also complements key Sustainable Development Goals (SDGs), including No Poverty (SDG 1), Quality Education (SDG 4), and Reduced Inequalities (SDG 10). The framework’s scalability to other Muslim-majority countries, especially those with centralized governance models like Brunei, further establishes its potential as a replicable model for modernizing Islamic social finance globally. This research offers a theoretical approach to advancing Islamic social finance, with an emphasis on innovation, financial inclusion, and sustainable development.
Keywords
- Blockchain,
- Artificial Intelligence,
- Islamic Finance,
- Zakat,
- Waqf,
- Islamic Social Finance
How to Cite
Siti Raihana Hamzah, Azuan Ahmad, Norizarina Ishak, & Ahmad Fadly Nurullah Rasedee. (2025). Revolutionizing Financial Inclusion: A Blockchain-AI Model for Zakat and Waqf Management in Malaysia and Beyond. IEco | Islamic Economics Journal, 3(1), 173–193. Retrieved from https://unissa.edu.bn/journal/index.php/ieco/article/view/1339
