Purpose -This paper aims to discuss the application of waqf (endowment) in the social finance sector for funding social and development projects and services.Design/methodology/approach -The study is qualitative. It reviews literature and provides descriptive data to present its main idea.Findings -Most Muslim-majority countries are generally income-poor, and the governments are generally weak in their tax collection, effective governance and capacity for development spending. Private sector financial institutions are scarce and mostly cater to the people who can meet the income-based lending criteria. Thus, the institution of waqf can fill the gap as a social finance institution by providing intermediation services for effectively utilising perpetual social savings. Flexibility in the rules of waqf enables it to serve beneficiaries directly or through financial institutions and to provide a wide range of social services.Research limitations/implications -This conceptual research highlights the need and potential of waqf without discussing the regulatory and operational details of how to effectively institutionalize it in different regions.Practical implications -The institution of waqf can harness the potential of selfless charitable giving in an effective way for better economic impact in the targeted social segments of society.Originality value -The paper suggests the establishment of waqf-based training and vocational centres which will increase opportunities of self-employment and contribute in upward social mobility of beneficiaries.

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Purpose The purpose of this paper is to explore two main aspects of waqf: the characteristics of waqf property and the management of waqf. This paper also discusses the governance of waqf management as a source of funds for Islamic microfinance institutions (MFIs). Design/methodology/approach This research uses content analysis method to examine various literatures that discuss the concept and management of waqf. Findings The characteristics of cash waqf such as permanence, irrevocability and perpetuity differentiate waqf from other type of donations. Therefore, cash waqf-based Islamic microfinance needs to be sustainable. Good corporate governance is vital to ensure the sustainability. As the donors of cash waqf do not aim to make financial profit, waqf-based Islamic MFIs will be able to provide low-cost capital to the poor entrepreneurs. Furthermore, to ensure the perpetuity of the waqf, it is suggested that only revenue from the waqf property should be used for microfinance fund. Social implications The cash waqf-based Islamic microfinance will help the micro entrepreneurs to get low-cost capital without collateral. At the same time, public can donate any amount they afford to contribute to cash waqf. Originality/value The creation of a cash waqf-based Islamic MFI must observe the issues of agency conflicts and the right of stakeholders to a transparent management. This paper emphasizes the importance of good governance in managing the waqf property as a source of fund for Islamic MFIs.

PurposeThe purpose of this paper is to assess key issues in measurement and management of operational risk in Malaysian Islamic banks.Design/methodology/approachDescriptive, analytical, and comparative analyses are used to discuss the issues of operational risk in Islamic bank through the implications associated with the Islamic banks' operational risk as well as the implications on risk measurement, risk management, and capital adequacy.FindingsDiscussion on operational risk in Islamic banks is significant and becoming more complicated compared with conventional banking because of the unique contractual features and general legal environment. While basic Basel II core principles of effective banking supervision apply equally well and ideally suit the Islamic banking institutions, risk measurement, and risk management practices still need specific adaptations to Islamic banks' operational characteristics. These particularities highlight the unique characteristics of Islamic banks and raise serious concerns regarding the applicability of the Basel II methodology for Islamic banks.Research limitations/implicationsThis study has important implications for the understanding of operational risk, particularly the specific issues of the Islamic banks' operational risk that arise from the different nature of the financing and investment activities of the banks. With regard to measuring operational risk capital charge, the banks have to choose the right and effective method to ensure the operational risk capital charge will be more in line with the banks' actual risk profile and thus will provide the adequate capital and an improved buffer once the losses are announced.Originality/valueThe paper will fill the gap to the existing literature of operational risk in banking institutions especially Islamic banks, by showing the needs of specific adaption of operational risk measurement and risk management practices due to the nature of Islamic banks.

Reports that poverty alleviation is a particular developmental focus in Malaysian plans. Reveals that for this to be attained microenterprises are encouraged, and that the financing of microenterprises by means of pawnshop loans in small amounts and with low risk is a popular one among the marginal groups. Examines the efficacy of this instrument of microenterprise financing.