Islamic Social Finance and Welfare Enhancement: A PRISMA Systematic Review of Zakat, Waqf, and Islamic Microfinance in Developing Countries

Abstract

Islamic economics has long been promoted as a normative framework for achieving social justice and welfare, yet empirical implementation remains uneven across developing nations. This study aims to systematically examine how Islamic economic principles are translated into practical welfare outcomes and to address the gap between theory and empirical practice. This research employs a Systematic Journal Review using the PRISMA framework to identify, screen, and synthesize relevant empirical studies on Islamic economics and welfare enhancement. Peer-reviewed qualitative, quantitative, and mixed-methods studies from developing countries were selected and analyzed based on predefined inclusion criteria. The findings indicate that productive zakat, waqf, and Islamic microfinance programs significantly contribute to poverty alleviation, income growth, and social empowerment. Quantitative evidence demonstrates a statistically significant negative relationship between Islamic social finance instruments and poverty levels. However, variations in impact are influenced by governance quality, institutional capacity, and implementation strategies. In conclusion, Islamic economics can effectively enhance welfare when normative principles are supported by robust institutional frameworks and evidence-based implementation.