Cooperative-waqf model: a proposal to develop idle waqf lands in Malaysia

Abstract

Purpose Waqf (Islamic endowment) in the form of cash is important to address the problem of developing idle waqf lands. Although there are various existing models of cash waqf, there is still a need for innovative cash waqf models. This paper aims to offer an alternative mode of financing for developing idle waqf lands using the concepts of cooperatives and waqf. Design/methodology/approach The present study first evaluates relevant literature on financing issues faced by waqf institutions in developing idle waqf lands as well as existing models of cash waqf. Based on the prevailing gap in cash waqf models, the study proposes a hybrid model of cooperative-waqf to finance idle waqf lands in Malaysia. Findings The proposed model is unique owing to the new dimension of membership being embedded into the waqf project. It considers donors as members of the waqf project, which is funded through the cash waqf collected, and thus, donors are given the privilege to receive benefits from the commercialised projects that are developed on the waqf lands. The existing models of cash waqf use traditional methods in which donors merely contribute cash waqf without any awareness of how the contributions are utilised. Usually, this problem occurs due to the lack of reciprocal communication between cash waqf donors and waqf institutions. Research limitations/implications The present study examines the case of waqf land development in the context of Malaysia only. Secondly, the paper does not contain any empirical analysis, and the development of the paper is based on existing literature that discusses various models of cash waqf practised in Muslim-majority and -minority countries. Future research can conduct surveys of donors and other stakeholders on the practicality of the model. Practical implications It is expected that the proposed cooperative-waqf model will be able to create a synchronised relationship between cash waqf donors and waqf institutions and hence boost participation in developing waqf lands. Originality/value The present study adds to the existing literature in the area of waqf and cash waqf models, especially the application of this instrument in the context of Malaysia. It also offers a new hybrid model to the State Islamic Religious Councils (SIRCs) – Malaysia’s sole trustee of waqf assets management – such that the implementation of the proposed model could boost the collection of cash waqf in developing commercial projects on idle waqf lands.

Waqfintech and Sustainable Socio-Economic Development

“…Indirect cash waqf refers to cash donations that are accumulated and invested before distribution to the beneficiaries (Mohsin, 2014). Under this model, donors contribute directly to the waqf institutions by depositing cash to a specific bank account and the collected waqf funds are then invested according to Shariah principles (Pitchay et al, 2018). In turn, the waqf institutions channel revenue from the investment towards humanitarian causes or religious matters.…”

“…Over the years, waqf practices and institutions went through tremendous changes following colonisation and secularism (Mohsin and Muneeza, 2019). Some waqf properties lost their waqf status due to loss of supporting documents during war and colonisation (Pitchay et al, 2018). In contemporary times, waqf institutions face financial constraints in funding the redevelopment of mosques (Shukri et al, 2019) which calls for innovate financing to rejuvenate the development of waqf assets and fund charitable causes.…”

“…One of the important aspects of the waqf fund is that the use of waqf extended beyond matters directly related to the religious needs of Muslims. Besides funding religious activities and improving welfare of the Muslims, waqf institutions also aim to improve the social welfare of less-privileged groups especially the poor and people in need (Pitchay et al, 2018). In addition to financing religious establishments, waqf has been used to finance public services such as the building of roads, bridges, schools, libraries and hospitals (Shukri et al, 2019).…”

Critical assessment of Islamic endowment funds (Waqf) literature: lesson for government and future directions

“…(2018) Adeyemi et al. (2016) Sulaiman and Zakari (2019) Pitchay et al. (2018) Thaker (2018) Thaker et al.…”

Evaluation of Muhammadiyah Waqf Assets Utilization in Magelang Regency

“…In this case of Muhammadiyah, as waqf Nazir through Majlis of Endowments and Properties, plays significant roles to manage the waqf assets, which used as driving forces for various business charities (Usman, 2016). Pitchay et al (2018) recommend that the profit of waqf utilisation must be distributed to poor entrepreneurs to meet their needs. Through productive management, the waqf utilisation will serve (i) the participation of the poor in business, (ii) empowerment of the poor through Waqf and (iii) the development of productive entrepreneurs from Waqf assets to the poor individually or collectively.…”