Islamic Social Finance as a Civilizational Mechanism: A Worldview-Guided Framework for Digital Innovation

Abstract

Islamic Social Finance (ISF) is increasingly framed as a technical instrument for poverty alleviation, welfare provision, and alignment with global development agendas. While such approaches offer operational value, they risk detaching ISF from its metaphysical and civilizational foundations. This paper argues that ISF is more accurately understood as a civilizational mechanism grounded in the Islamic worldview, designed to transform society from a condition of kufr, conceptualized here in its moral–sociological sense as the concealment of blessings through hoarding, injustice, dependency, and social fragmentation, towards a condition of syukr, characterized by the ethical manifestation of blessings through circulation, dignity, justice, and social cohesion.Drawing upon Islamic metaphysics, moral economy, and civilizational theory, the study conceptualizes Islamic Social Finance as an institutional bridge linking worldview principles with socio-economic order. The paper further examines the implications of rapid digitalization in ISF, including the adoption of artificial intelligence, blockchain, and platform-based governance. It identifies key civilizational risks associated with digital transformation, such as data absolutism, algorithmic bias, dehumanization of worship, and the bureaucratization of compassion. To address these challenges, the study proposes a worldview-guided ethical framework for digital innovation in ISF, grounded in five principles: preservation of meaning (ḥifẓ al-maʿnā), human dignity (karāmah), justice (ʿadl), purification (tazkiyah), and stewardship (istikhlāf). The paper contributes a novel conceptual foundation for Islamic Social Finance, offering guidance for ethically governing its digital transformation while preserving its civilizational purpose.