THE ROLE OF QARDHUL HASAN CONTRACTS IN IMPROVING THE ECONOMIC WELFARE OF THE SUKAGALIH COMMUNITY

Abstract

This research is motivated by the limited access of the community to fair and interest-free financing, especially in Sukagalih Village. Many residents still depend on informal financial institutions like "Bank Emok", which impose high interest rates and exploitative practices, putting them at risk of falling into prolonged debt. This research aims to analyze the role of the Qardhul Hasan contract in improving the economic welfare of the community through a case study of the HERC Loan Program (Haji Endang Rusyana Center). This program is a social financing initiative sourced from personal funds, operated without interest or collateral, and based on mutual assistance principles and transaction blessings. Through a descriptive qualitative approach, this research involves five informants, consisting of program managers and beneficiaries. Data were collected through in-depth interviews, direct observations, and documentation. The research results show that the HERC Loan Program has a positive impact on increasing community income, developing micro-enterprises, and strengthening household economic resilience. A flexible repayment mechanism creates a sense of psychological security, while the usury's absence provides spiritual tranquility and fosters social responsibility and ethics of loan fund use. This program is capable of reducing the community's dependence on exploitative informal financial institutions. These findings indicate that financing based on the Qardhul Hasan contract can be an alternative solution in building a fair, inclusive economy for the community, in line with Islamic values. The HERC Loan Program has the potential to be replicated in other communities as a tangible manifestation of the Sharia finance-oriented application toward blessings and social welfare.