ISLAMIC FINANCIAL INSTRUMENTS AND HOUSEHOLD ECONOMIC RESILIENCE IN DEVELOPING COUNTRIES

Abstract

Household economic resilience represents a key prerequisite for the stability and long-term sustainability of societies in developing countries, especially under conditions of inflation, economic crises, income insecurity, and widespread poverty. In this context, the paper analyzes the potential of Islamic financial instruments such as zakat, waqf, qard hasan, takaful, mudaraba, and musharaka in strengthening household resilience and economic security. The research aims to determine how these instruments can contribute to reducing financial vulnerability, promoting social inclusion, and enhancing the overall stability of communities. The study applies a theoretical and analytical approach, along with a comparative review of institutional practices in countries with well-developed Islamic financial sectors, including Malaysia, Indonesia, Sudan, and Bosnia and Herzegovina. The findings indicate that adequately integrated and well-regulated Islamic financial mechanisms hold significant potential to contribute to poverty reduction, increased access to financial services, and the strengthening of long-term economic resilience among households in developing economies.