Maqasid Al-Shariah Realisation in Islamic Microfinance: A Conceptual Framework for Sustainable Halal Development

Abstract

The fast-growing global halal economy has resulted in the need for Islamic financial tools that can support inclusive, ethical, and sustainable economic growth. While the literature on Islamic microfinance has garnered significant scholarly attention in the context of financial exclusion, poverty reduction, and Shariah-compliant finance, most studies focus on assessing its success in terms of institutional conformity, operational effectiveness, and financial outreach. Understanding how Islamic microfinance can fulfil the higher purposes of Maqasid al-Shariah while contributing to sustainable halal development has received only limited attention. This conceptual paper aims to fill this theoretical gap with the help of an integrated framework that positions Islamic microfinance as an effective tool of achieving Maqasid al-Shariah in the contexts of halal economy. The study relies on the existing literature on Islamic microfinance, as well as Maqasid al-Shariah, Islamic social finance, Shariah compliance, and halal ecosystem development to create a comprehensive framework linking ethical financing, social justice, entrepreneurial empowerment, institutional governance, environmental responsibility, and halal value chain development. The proposed framework maintains that Islamic microfinance should not be assessed in terms of procedural Shariah compliance only, but also in terms of its contribution to equitable wealth distribution, human wellbeing, responsible entrepreneurship, and long-term sustainability. By providing a shift from compliance-centred financing to value creation centred around the idea of Maqasid, the paper contributes to the theoretical understanding of Islamic microfinance as well as practice recommendations for officers of Islamic financial institutions, halal industry representatives, and researchers.