A Collaborative Development Framework for Micro Waqf Banks: Strategic Prioritization Though the Analytic Network Process

Abstract

Micro Waqf Banks (MWBs) are innovative financial institutions in the Islamic finance ecosystem designed to empower micro-entrepreneurs and promote financial inclusion. However, despite their potential, MWBs face various challenges that hinder sustainable growth. This study aims to identify and map these key challenges and determine strategic responses using the Analytic Network Process (ANP) method. A qualitative approach was employed, gathering insights from experts and practitioners, and applying the ANP method to structure and prioritize complex decision-making. The consistency of expert judgment was measured using the Rater Agreement index. Five main challenges were identified: technical and operational issues (weight: 0.26), regulatory and policy constraints (0.23), partnership and collaboration barriers (0.20), human resource limitations (0.16), and community-related concerns (0.11), with a Rater Agreement of 0.67. Strategic responses were prioritized as follows: resolving technical issues (0.25), improving regulations (0.23), enhancing partnerships (0.22), strengthening human resources (0.17), and addressing community engagement (0.10), with improved agreement (0.73). Preferred strategies included regulatory reform and policy optimization (0.36), building networks with Islamic Financial Institutions and Zakat Agencies (0.19), leveraging technology-based collaboration (0.17), partnering with local governments (0.14), and establishing an apex institution (0.11), with a Rater Agreement of 0.60. The findings emphasize the importance of a comprehensive and collaborative approach to ensure MWBs’ sustainable development, focusing on regulatory reform and multistakeholder cooperation for their institutional strengthening within the Islamic social finance framework.