Integrating Zakat and Waqf Systems to Support Halal Entrepreneurship and Inclusive Growth in Pakistan

Abstract

Pakistan, a nation with a large Muslim population, possesses significant potential in the global halal industry, yet it faces persistent challenges of poverty, unemployment, and underdeveloped halal infrastructure. This article explores the strategic integration of Zakat, an obligatory almsgiving, and Waqf, a perpetual charitable endowment, as powerful Islamic social finance instruments to foster halal entrepreneurship and achieve inclusive economic growth. Drawing on a theoretical framework rooted in Islamic ethical principles and sustainable development paradigms, we argue that leveraging Zakat for initial capital and Waqf for sustainable infrastructure and long-term financing can unlock this potential. The article identifies key drivers for this integration, including the productive utilization of Zakat, the untapped potential of Waqf assets, and the critical need for financial inclusion for Small and Medium-sized Enterprises (SMEs). It also discusses challenges such as governance, awareness, and infrastructure gaps. A proposed framework outlines how various stakeholders can collaborate to channel these funds effectively, ultimately contributing to job creation, poverty alleviation, and enhanced participation in the global halal economy, aligning with national development goals and Islamic values.