Islamic Business Incubators: An Innovative Model for Financing Startups through Cash Waqf -The Indonesian Experience

Abstract

This study explores the innovative integration of Cash Waqf as a financial incubator to support startups, with a case study on the Indonesian experience.  The research highlights the synergy between two distinct concepts: business incubators, which originated in Western capitalist societies to support startups, and cash waqf, which emerged in the Islamic experience—particularly during the Ottoman era—aimed at meeting societal needs through endowments in cash rather than fixed assets, as is customary in traditional waqf practices.

     The study reviews the theoretical foundations of cash waqf and its legitimacy, emphasizing its adaptability to contemporary financial practices. The example of Indonesia shows how cash waqf can help startups by using organized investment systems and modern technologies like digital financing, artificial intelligence, and blockchain technology to make things more open and efficient and help endowers' goals without having to rely on central government red tape.

The findings indicate that combining cash waqf with financial technology aligns with the principles of Islamic finance, offering sustainable solutions for economic development. The study concludes that this model provides a promising framework for other Islamic countries to foster innovation, entrepreneurship, and community empowerment while adhering to Sharia principles.