1. Based on theoretical advances in financial economics and
Islamic finance, there are various innovative instruments and
procedures for financing investment in waqf have been
introduced (Monzer Kahf, 1998(.
1
TRADITIONAL
MODE
INNOVATIVE
MODE
WAQF FINANCING
Financing the Development of Waqf Part 2: The application and
issues
2. 1.Waqf through new property acquisition
2.Borrowing
3.Waqf property substitution
4.Hukr ( long lease with large advance lump sum(
2
THE TRADITIONAL MODE OF WAQF FINANCING
SOURCE: MONZER KAHF (2011(
HOSSEIN PIRASTEH & HOJJATOULLAH ABDOLMALEKI (2011(
THE NEW MODE OF WAQF FINANCING
1.Use/ apply muamalat contract and innovative methods
to increase the waqf properties and improve the
usufruct or revenues that it can generate for future
consumption
3. 3
GOVERNMENT FUND
Normally creating new awqaf properties through acquisition
by the government are common. The government allocate
funds to help acquire more waqf properties . In the old days,
there are many waqf mosques, schools, hospitals and
universities that established through this method. This is among
the common method of financing.
In today’s environment:
1.King Abdul Aziz kingdom waqf the fund for the development
and extension of Masjidil Haram.
2.Government of Malaysia allocate fund to JAWHAR–
The money are used to develop idle waqf land into
Orphanage, Hotels, Religious school, Bazaar, Shelter for
Women and etc. .
4. 4
Cash waqf
Definition
Cash waqf can be defined as the confinement of an amount of money
or cash from the founder and the dedication of its usufruct, according to
founders condition in perpetuity to the welfare of society
History
From the Islamic history, it is difficult to trace the cash waqf in Arabic
society because they claimed that this type of endowment is subject to
riba. However, on the 15th century the Ottoman courts approved these
kind of endowment and the cash waqf growing popular at the end of
16th century. Cash waqf has emerged in later times compared to
property waqf and it is a step forward for the Islamic economic. This is
because since all those who want to support the social causes most of
them may not have property for waqf but instead cash, it is easy for
.them to contributed
5. 5
Legitimacy of Cash Waqf
From Hanafi school of thought, Imam Abu Hanifah agreed that all
movable properties subject to waqf including the waqf of dirham and
dinnar, for instance waqf al-nuqud (cash waqf). In line with that opinion,
Imam Zufar stated that jewelry could also be subjected to waqf.
Similarly, both Imam Muhammad and al-Sarakhsi agreed that movable
items as the subject matter for waqf.
Imam Malik also agreed that both movable and immovable properties
considered as subject matter for waqf even if it is cash waqf. In addition,
Imam Shafii and Hanbali discussed on the validity of both immovable
and movable properties as a subject matter of waqf. In recent time,
World Fiqh Council (Majma’ al-Fiqh) issued fatwa on this matter had
also agreed on the creation of cash waqf.
6. 6
If the purpose of the money/cash been used as the subject for cash
waqf does not mislead the cash become depleted, thus, the
money/cash can be subject to cash waqf (Baharuddin Sayin, 1994).
According to Baharuddin (2011), the condition for money/cash that
might be used as cash waqf is that:
1) The cash/money that declared for cash waqf should be exchanged
with an asset such as property, stocks, or capital at which only its
usufruct, dividend, or revenues that may be used.
2)The cash/money that declared as cash waqf should be exchanged
with fixed asset such as land or buildings and only its usufruct that
might be used
3)The cash/money itself should be valid unless the cash waqf is not
allowed.
7. 7
Practise of Cash waqf in Malaysia
Imam Shafii approved the creation of waqf from non-Muslim even if it is
for the purpose of a mosque. His opinion based on hadith: “The Prophet
(pbuh) said Allah will not oppress Muslim for their good deeds, as they
will be rewarded in this world and in the hereafter. But for non-Muslims
they will be rewarded for all their good dedds only in this world”. Thus,
based on the hadith, it enable the non-Muslim to participate in cash
waqf creation.
The 77 th. Meeting of Fatwa Committee of the National Council for
the Religion of Islam agreed to allow cash waqf practise in Malaysia . “
In Islam, performing waqf in the form of cash is allowed” (
www.e-wakafjohor.gov.my andwww.mais.net.my)
8. RECENTLY, GETTING FINANCING FOR WAQF
THROUGH CASH WAQF INSTRUMENTS ARE
POPULAR IN MALAYSIA
8
States Minimum Waqf Price (RM)
Penang Waqf Fund Scheme
Selangor Waqf Share
Pahang Waqf Share
Johor Waqf Share
Terengganu Waqf Share
Malacca Waqf Share
5
10
10
10
10
10
9. Mechanism of Cash Waqf at MAIS
Figure 2. Waqf Collection through Infaq Scheme
Source: Perbadanan Waqf Selangor, MAIS (2013)
34760
85862
23840
96737
148663
251146
622661
0
100000
200000
300000
400000
500000
600000
700000
2006 2007 2008 2009 2010 2011 2012
Total Waqf Contributions (RM) through Infaq Scheme
10.
11. 11
Malaysia Cash Waqf
Initiate by Malaysia Waqf Foundation. All contributions from
waqif will be transform into fixed asset as it will give the
continuous impact and benefits to the society.
Methods of cash waqf collection
1.Salary deduction.
For government staff they can contribute through code 4474
2.Counter Malaysia Waqf Foundation
3.Cheaque or postal order to Malaysia Waqf Foundation
3.Collaboration with banks
i) internet banking
ii) cash deposit machine
iii) Auto debit
12. 12
Innovation in managing cash waqf instruments
1. Dividends earned for example by individuals, state baitulmal,
corporations are channeled to an Waqf Institution Account as cash
waqf. The waqf institution collaborate with bank (Cash Waqf
Selangor Muamalat)
2. The associated waqf institution will act as a mutawalli where it
manage and invest the accumulated cash-waqf. The revenue
generated will then be directed to charitable projects after
operational expenses have been deducted. (Badan waqf Indonesia)
3. Transform the cash waqf (Taslim) into fixed asset that can
generate revenue or usufruct. The foundation create the
“Tawzi’ account to keep the revenue generate by fixed asset. Part
of Tawzi’ return for the benefit of ummah and part of it to generate
more return (Malaysia Waqf Foundation),
13. 13
Continue… Innovation in managing cash waqf instruments
Corporate cash waqf model
This model is a public waqf which had been practiced in Malaysia
specifically in Kumpulan Waqf an-Nur 1998, Turkey in Sabanci
Foundation-1974, Pakistan in Hamdard Foundation-1953 and
South Africa in the National Waqf Foundation-2000. The founder in
this model is not only individual but corporations or organization.
The revenue generated from cash waqf and fixed asset waqf will be
directed to charitable projects after operational expenses have
been deducted.
(Source: Dr. Magda Ismail Abdel Mohsin- INCEIF)
14. 14
Benefits and advantages of using cash waqf instrument
compared to real estate.
1.Easiest way to perform waqf as cash waqf mechanism is more
dynamic
2.Waqf can be perform based on financial ability
3.Provide opportunities to involve with waqf even though with
out real estate like land or buildings
4.In today’s situation, many real estates not fully owned by
the owner as the bank still hold the title. This is because most
of the real estate get the financing from the bank .
Therefore,
the cash waqf instrument provide a platform for those who
want to waqf their wealth.
5.The collections can be used to develop idle waqf real estate
Disadvantages
1.If the collections are small the money cannot be used to
acquire fixed asset (ambulance, shops, mosques)
2.Lack on knowledge on the legality and availability of this
instrument.