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Funding higher education through waqf: a lesson from Malaysia

Muhammad Usman (Department of Economics, College of Economics and Social Development, Institute of Business Management (IoBM), Karachi, Pakistan)
Asmak Ab Rahman (Department of Syariah and Economics, Academy of Islamic Studies, University of Malaya, Kuala Lumpur, Malaysia)

International Journal of Ethics and Systems

ISSN: 2514-9369

Article publication date: 12 April 2022

Issue publication date: 5 January 2023

1097

Abstract

Purpose

This paper aims to highlight the importance of waqf in financing higher educational institutions (HEIs) and its potential as an alternative source of generating additional funds for the HEIs, and discourses on waqf practice, fundraising, waqf management and utilisation of waqf income for the development of higher education in Malaysia.

Design/methodology/approach

This paper is based on the information gathered through interviews with 12 participants who are actively engaged in waqf in different capacities. The participants can easily be classified into three expert groups; personnel of waqf-based universities, personnel of the respective State Islamic Religious Councils (SIRCs) and waqf practitioners. In addition, archival records, relevant documents and library sources have been used in the research.

Findings

The study learnt that waqf in Malaysia is centralised and exclusively controlled by the SIRCs, which are, as a rule, sole trustees of all categories of awqaf in the respective states; hence, any form of private trusteeship is considered illegal. It is a prerequisite for the establishment of a waqf fund to obtain permission from the respective SIRCs, and bring it under the purview of the council prior to setting up a waqf. The ministry of higher education has taken some initiatives to encourage HEIs to use waqf as an alternative source of generating funds. Subsequently, numerous public universities have set up waqf funds and developed a comprehensive mechanism for raising the fund through traditional and modern methods and technologies. A major chunk of the waqf funds is collected in the form of cash, but the amount falls short of reaching critical mass to enable the waqf to become self-sustaining. The study found that the universities also involved themselves in various social welfare programmes, especially in health care, and some income-generating projects besides seeking support from the waqf fund for their academic and educational activities.

Practical implications

The paper brings out the fact that waqf offers the best features as an alternative fiscal instrument to finance projects of public good, including higher education at three selected waqf-based universities in Malaysia.

Social implications

The study’s findings will be helpful to the ummah in general and Malaysia in particular. It can help policymakers, legislators and academicians in formulating new strategies for the common good and sensitize the countries facing a huge fiscal deficit and lack of development to the viability and potential of waqf as a catalyst for progress and economic activity.

Originality/value

The paper shares the experience of Malaysia’s waqf-based universities, waqf fundraising, management and income utilisation. It accentuates the fact that waqf can help finance academic activities at universities and sheds light on some useful examples of waqf-based universities founded in earlier periods of Islamic civilisation.

Keywords

Acknowledgements

The researchers express their gratitude to the Ministry of Higher Education Malaysia and the University of Malaya for allocating funds for this project under a research grant [LRGS/2013/SME-UM/SI/02] and [PG006-2014B]. The authors are especially thankful to Associate Professor Dr Siti Mashitah Mahamood and Ustaz Azizi bin Che Seman of the Academy of Islamic Studies, University of Malaya, for their unrelenting support throughout this study.

Funding: The researchers were able to accomplish this study with the help of research grant LRGS entitled “Models of Waqf Financing, Investment and Development of the Higher Educational Institutions: A Study in Malaysia and Some Selected Countries” [grant number LR001A-2013B] and “Models of Waqf Financing, Investment and Development of Higher Educational Institutions: A Comparative Study of Malaysia and Pakistan” [grant number PG006-2014B].

Citation

Usman, M. and Ab Rahman, A. (2023), "Funding higher education through waqf: a lesson from Malaysia", International Journal of Ethics and Systems, Vol. 39 No. 1, pp. 107-125. https://doi.org/10.1108/IJOES-12-2021-0217

Publisher

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Emerald Publishing Limited

Copyright © 2022, Emerald Publishing Limited

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