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Micro enterprises are emerging as an important sector in economic system of the Malaysia by contributing significantly to Gross Domestic Product (GDP) and providing employment opportunities to millions of workers in the country. Despite its importance in contributing towards the enhancement of wellbeing of the society and the continuous efforts from the government, Micro enterprises in Malaysia, are struggling with several issues. Majority of them are facing difficulties in obtaining financing as they rated as a market segment associated with high risk. Contemporary Islamic banks are in paradigm of shifting its portfolio towards debt financing and after considering the current Islamic finance and banking phenomenon, there is a need arise for special purpose Islamic financial institution to serve the capital requirements of micro enterprises. This study suggests a mosque based sustainable model for financing micro enterprises using cash waqf with a significant feature of involving mosque-based administration committees (AJK) to intermediate between the Waqf Corporation of Selangor (PWS) (Waqf assets managing body of State Islamic Religious Council of Selangor (MAIS)) as Mutawalli of waqf, and micro enterprises at village level. The study is based on the Selangor state as the case study. The model suggested by this study may helpful in addressing the financing constraints of Micro enterprises and further improving wellbeing of the Muslim society by better usage of cash waqf. Thus will enhance the lives of ordinary individuals to stand by their own which will result in equitable distribution of economic resource among Muslims. Outcome of this study may enlighten Islamic financial institutions, waqf administrators and policy makers for their strategic planning activities in Islamic microfinancing.