Waqf in Islam

1. In the Islamic system, Awqaf is a perpetual charity that means holding
certain property and preserving it for the confined benefit
of certain philanthropic purposes (Kabir Hassan, 2010(.
WAQF MANAFAAH
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GENERAL
WAQAF
SPECIAL
WAQAF
WAQF CAPITAL (Waqf Khairi(
Financing the Development of Waqf Part 1: Modes of Financing

2. In the Islamic system, Awqaf is a perpetual charity that
means holding certain property and preserving it for the
confined benefit of certain philanthropic purposes (Kabir
Hassan, 2010(.
Waqf manafaah–
In the form of benefit that can be utilized (e.g.. Al- Quran,
dialysis center( or revenues (e.g.. rental, profit(.
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Waqf capital–
Capital of waqf can be in the form of movable and
immovable property including cash
.

3. Concept of perpetuity and inalienability – when discuss about the
waqf asset, there are issues pertaining concept of perpetuity
and inalienability that need to be consider.
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Muslim scholar are rigid about the transfer of title which
actually limited to the principal capital of waqf/
waqf asset/ waqf mal but not towards its
return/revenue/benefits.
Some scholar on the issue of transfer of title are flexible,
where they allowed the transfer of rights on waqf property
without eliminate the concept of perpetuity and inalienability.
For example : leasing and loaning.

4. Concept of perpetuity and inalienability – when discuss about the
waqf revenues, there are issues pertaining concept of perpetuity
and inalienability that need to be consider.
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Waqf revenues – Jurist in Hanafi and Maliki school agree
that whenever the capital of waqf need to be
refurbish/upgrade/ revive, the mutawallis will spend the
revenues from the waqf asset itself. It seem that the
revenue when spent on the redevelopment of waqf
property it is a lost of revenue.
*The rule of perpetuity and inalienability is not applicable
as mutawallis used the waqf revenues not waqf capital.

5. WAQF FINANCING
.
1.GOVERNMENT FUND
2.CASH WAQF
3.SHARES
-SHARES FOR WAQF ( Common shares, unlisted i-REITs(
-WAQF SHARES
4.JOINT VENTURE/ PARTNERSHIP
-Mudharabah
-Musyarakah
-Muzaraah
5.IJARAH
-Hukr
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6. WAQF FINANCING
.
6.SUKUK
-Sukuk intifa’
-Sukuk musyarakah
7.ISTIBDAL
8.ISTISNA’
9.BUILT, OPERATE AND TRANSFER
-Murabahah (BBA(
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GOVERNMENT FUND
Allocation of fund by government to Religious council for development of waqf
land.
Source: JAWHAR

8. Cash Waqaf
 Cash that the waqif allocate for waqf. The cash waqf
should provide the perpetual benefits to ummah.
 Eg: Dividends earned for example by individuals,
state baitulmal, corporations are channeled to an
Associated Waqf Institution as cash waqf.
 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.
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10. THE CURRENT PRACTICE OF CASH WAQF
FINANCING IN SELANGOR
Selangor Waqf Corporation collaborate with Bank
Muamalat to form the Cash Waqf instrument.
The waqf funds being channeled to Healthcare and
Education sector
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11. Waqaf Shares
 Corporate sector give their portion of
shares as waqaf item.
 The best example is Johor Corporation
that waqaf their shares to Waqaf An-Nur
Corporation
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12. THE CURRENT PRACTICE OF WAQF FINANCING
IN JOHOR
J-Corp waqf RM200 milion worth of it shares to SRC
of Johor. The funds is put under Waqf An Nur
Corporation. Based on the concept of perpetuity the
waqf fund can give the continuous benefits.
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Shares for waqf –
issue certificates/shares for waqf purposes.
Traditional Mode
Example: Certificate that represents size or plot of
area. ( Buy a certificate / Shares that issued by
mosque committee for waqf purposes such as to
develop the mosque.
Modern mode:
Ordinary Shares
REITs
Unit Trust

14. REITs for waqf
Source: Dr. Siti Mashitoh

15. Sukuk Waqf
 Sukuk is an islamic bond with asset-back
and the sukuk holder owned the
proportionate beneficial ownership in the
underlying asset.
 Muqaradah bond / Mudarabah bond –
the bondholder act as capital provider,
therefore he can be the bondholder of
the project. The different with mudarabah
shares, the bondholder only have right on
the benefit that comes from the project
but not towards capital appreciation.
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17. Lease - Hukr
 Hukr means monopoly or exclusivity
 The lease practises basically using a long
term lease. Instead of selling the waqaf
asset, the Nazer can sell a right for a
long lease.
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18. THE CURRENT PRACTICE OF WAQF FINANCING
IN PULAU PINANG
 The SRC of Pulau Pinang develop its waqf land.
The project better known as Waqf Setee Aisyah. Based
on the concept of hukr or long lease, they develop the
housing project and shop lots on this land
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