Economic Empowerment Movements in Islamic Social Finance: A Critical Institutional Evaluation of Dompet Dhuafa’s Poverty Exit Strategy

Abstract

This study presents a critical institutional evaluation of Dompet Dhuafa’s poverty exit strategy within the framework of Islamic social finance in Indonesia. Using a document-based case study approach, the research integrates secondary qualitative institutional analysis drawn from official reports, national poverty statistics, and empirical literature. The study applies three analytical frameworks the Capability Approach, Sustainable Livelihood Framework, and Institutional Theory to assess program impact across dimensions of income, asset strengthening, and institutional sustainability. Findings indicate that while Dompet Dhuafa exhibits strong organizational capacity and allocates significant ZISWAF resources to productive sectors, the majority of mustahik beneficiaries experience only partial upward mobility, transitioning from poor to near-poor status without achieving structural poverty exit. Empowerment outcomes are concentrated in human and financial capital, with limited diversification in livelihood strategies and constrained integration of natural capital. Institutionally, Dompet Dhuafa operates as a robust civil society actor, yet its macro-transformative potential remains limited due to the lack of systemic integration with public policy and national development frameworks. The study concludes that Islamic social finance holds substantial localized impact but requires greater alignment with state mechanisms and cross-sectoral collaboration to function as a scalable and sustainable poverty alleviation instrument