Taking stock of the waqf-based Islamic microfinance model

Abstract

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.

Determinants of cash waqf fund collection in Malaysian Islamic banking institutions: empirical insights from employees’ perspectives

“…Waqf has been a key source of funding for Muslims over the past centuries, starting with the extensive endowments made by the Prophet Muhammad (peace be upon him) and his companions. Waqf can be classified based on its nature and purpose into different forms, such as waqf khayrī (charitable waqf), waqf al-sabīl (public endowment) and waqf al-ʿaw ari Á d (contingent endowment) (Abdullah and Ismail, 2017;Rashid, 2018;Nafar, 2019). Waqf khayrī is normally established to finance education institutions, mosques and shelters.…”

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

“…(2016) Norm and attitude have positive impacts on microentrepreneurs' intentions to adopt the Integrated Cash Waqf Micro Enterprise Investment (ICWME-I) model in Malaysia. Abdullah and Ismail (2017) A cash waqf is suitable for Islamic microfinance institutions because the financing given to them is very inexpensive. Hamber and Haneef (2017) The case of Singapore, which proposes waqf-based social microventure funds.…”

“…(2015) Ahmed and Salleh (2016) Thaker et al. (2016) Abdullah and Ismail (2017) Hamber and Haneef (2017) Zabri and Mohammed (2018) Banking Ramli and Jalil (2014) Darus et al. (2017) Hamza (2017) Mohammad (2015) Non-bank Finance Hasan and Sulaiman (2016) Rahman and Ahmad (2011) Zakaria et al.…”

“…This collaboration can also reduce poverty ( Haneef et al., 2014 , 2015 ; Ahmed and Salleh, 2016 ), reduce the gap between the rich and the poor ( Rahman and Ahmad, 2011 ; Zakaria et al., 2013 ), increase financial access ( Hamber and Haneef, 2017 ; Moh'd et al., 2017 ; Abdullah and Ismail, 2017 ; Hamber and Haneef (2017) ; Zabri and Mohammed, 2018 ), create new banking products ( Ramli and Jalil, 2014 ). and possibly establish waqf-based banks ( Mohammad, 2015 ) that are distinct from other common banks.…”

Significance of Granting Legal Personality to Waqf Establishments in The Republic of Guinea

“…With this new feature, a primary development from the current status would see the disassociation of the two, allowing for waqf establishments to carry on a life of their own and outlive their founders. This would realize and fulfill the resilient and functional aspects needed for the said establishments to disrupt the existing practice (Abdullah & Ismail, 2017).…”