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Article
Publication date: 22 June 2022

Ascarya Ascarya and Atika Rukminastiti Masrifah

This study aims to devise policies in implementing cash waqf system of Baitul Maal wat Tamwil (BMT) in Indonesia, enabling the BMT to optimize its commercial and social…

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Abstract

Purpose

This study aims to devise policies in implementing cash waqf system of Baitul Maal wat Tamwil (BMT) in Indonesia, enabling the BMT to optimize its commercial and social activities to better achieve outreach, sustainability and welfare impact.

Design/methodology/approach

This study uses the strategic assumption surfacing and testing (SAST) method, with three groups of knowledgeable respondents, including expert, BMT practitioner and regulator to formulate important and certain policies.

Findings

The results show that four types of policies are required to improve cash waqf system of BMT, including 12 internal strategic policies, 15 internal operational policies, 15 external strategic policies and 9 external operational policies, which were found to be within a “certain planning region.” All of these policies have been agreed significantly by each group of respondents, as well as by all respondents combined. The most important-certain policies include Shiddiq, Amanah and professional Nazir, inculcate Islamic values to BMT employees and members, standard operating procedure and standard operating management of cash waqf management, technical assistance for Nazir to manage cash waqf and IT systems for BMT-cash waqf administration.

Research limitations/implications

The qualitative method used has its limitations, which could be improved by incorporating other methods. Moreover, the case and respondents are all Indonesian, so that the results are possibly only applicable to BMTs in Indonesia.

Practical implications

BMTs could adopt these policies in implementing their cash waqf management optimally.

Social implications

The management of cash waqf by BMT could help improve the social activities of the Baitul Maal directly from social cash waqf and indirectly from productive cash waqf.

Originality/value

To the best of the authors’ knowledge, this is the first study using SAST method to determine policies needed by the BMT to upgrade its cash waqf management producing more social programs for the society.

Details

International Journal of Islamic and Middle Eastern Finance and Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1753-8394

Keywords

Book part
Publication date: 19 November 2018

Muhammad Ikhwan Mauluddin and Asmak Ab Rahman

Purpose – Differing opinions about the status of cash waqf are not new among jurists. Several studies have been conducted relating to this issue. This chapter discusses…

Abstract

Purpose – Differing opinions about the status of cash waqf are not new among jurists. Several studies have been conducted relating to this issue. This chapter discusses cash waqf from the perspective of certain scholars in Indonesia, the Majelis Ulama Indonesia (MUI, Indonesian Scholars Council) and the scholars of Aceh, and the fatwa (opinion) on cash waqf.

Methodology/approach – Data for this study were collected from interviews and academic literature to reach general and specific conclusions. The study was conducted in Aceh, Indonesia.

Findings – Different views exist on the validity of cash waqf between the MUI and the scholars of Aceh. The MUI has declared that the practice of cash waqf is allowable and valid, while some scholars of Aceh reject it except when the cash is exchanged (istibdal) for permanent assets.

Originality/value – MPU scholars and pondok scholars are not in agreement as to the legality of cash waqf. Pondok scholars reject the practice of cash waqf except if the money is substituted (istibdal) into a fixed asset. This is so even when many other scholars of Aceh ruled that cash waqf is still valid even if it is not converted into a fixed asset.

Details

New Developments in Islamic Economics
Type: Book
ISBN: 978-1-78756-283-7

Keywords

Article
Publication date: 17 January 2022

Ascarya Ascarya, Muhamad Nadratuzzaman Hosen and Siti Rahmawati

Productive waqf is one type of ethical business/investment, which should comply to Islamic law, with so many models to choose from. The purpose of this study is to…

Abstract

Purpose

Productive waqf is one type of ethical business/investment, which should comply to Islamic law, with so many models to choose from. The purpose of this study is to determine factors of simple productive waqf, propose several simple productive waqf models and select the best simple productive waqf models appropriate to be adopted by waqf institution in Indonesia.

Design/methodology/approach

This study applies the analytic network process, including field survey, focused group discussion and in-depth interview, with two groups of respondents, namely, expert and waqf practitioner.

Findings

The results show that the determinants of simple productive waqf in Indonesia are the waqf institution, productive waqf asset to be developed, how to finance the productive waqf, how to manage the productive waqf and the compliance of productive waqf. Proposed productive waqf models include cash-waqf and self-managed model, Islamic bank financing and self-managed model, Sukuk and external partnership model, cash-waqf and external partnership and cash-waqf + co-financing and external partnership. Moreover, the best simple productive waqf model is cash-waqf and self-managed model, followed by cash-waqf and external partnership, where they could achieve the most in all socio-economic variables, well-being compliance and moral/ethics within the theory of unity of knowledge, Tawhid.

Research limitations/implications

The simple productive waqf models proposed are not exhaustive, since there are so many variations of the model. Moreover, the case and respondents are all Indonesian, so that the results are possibly only applicable to Indonesia.

Practical implications

To increase the probability of successful productive waqf development, waqf institutions could apply cash-waqf and self-managed model first, while other models could be applied in staged in line with waqf institution experience.

Social implications

The successful development of productive waqf could increase the social programs provided by waqf institutions to the society.

Originality/value

Productive waqf development is desperately needed due to many unproductive waqf lands in Indonesia, while studies have been limited, and there is no study discussing the productive waqf model appropriate for Indonesia.

Details

International Journal of Ethics and Systems, vol. 38 no. 3
Type: Research Article
ISSN: 2514-9369

Keywords

Open Access
Article
Publication date: 20 September 2021

Khaled Nour Aldeen, Inayah Swasti Ratih and Risa Sari Pertiwi

The purpose of this study is to explore the awareness and willingness level of millennials in Indonesia towards cash waqf (cash endowment). Cash waqf has gained huge…

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Abstract

Purpose

The purpose of this study is to explore the awareness and willingness level of millennials in Indonesia towards cash waqf (cash endowment). Cash waqf has gained huge attention in Indonesia because of its flexibility, especially after the Majlis Ulama Indonesia (MUI) officially announcing in 2002 that cash waqf practices in the country are Sharīʿah-compliant. Millennials comprise 33.75% of the total Indonesian population. Therefore, it is vital to analyze cash waqf from an Indonesian perspective. This study provides vital information for all institutions that are concerned with the enhancement of cash waqf contributions in Indonesia.

Design/methodology/approach

Self-structured questionnaires were distributed in Java Island to collect the data. The data were examined by employing suitable statistical tools. Besides, post-interview fact-finding was conducted with cash waqf experts from different related institutions in Indonesia to reach a more in-depth understanding about cash waqf issues.

Findings

The results depict a high level of awareness about cash waqf among millennials in Indonesia. The results further reveal a lower willingness level to contribute to cash waqf of the sample population as compared to their level of awareness about cash waqf. Moreover, cash waqf promotions must focus on delivering a deeper understanding about the concept and how it differs from other types of Islamic philanthropy. The results suggest that waqf trustees in the country must be more transparent. Moreover, the Indonesian Waqf Board should implement stricter rules to monitor waqf trustees.

Research limitations/implications

This research restricts the sample population to Indonesian Muslims who were born between 1980 and 2000.

Practical implications

As a Muslim-majority country, one would expect Indonesia to make much progress in cash waqf. By providing an explanatory understanding of willingness and awareness of cash waqf among Indonesians, this research can be helpful in designing proper educative marketing campaigns for future endowers to cash waqf activities to ensure cash waqf institutions provide efficient services. It is advisable to emphasize the transparency of waqf organizations. This will add to the nāz˙irs’ (waqf trustee) reputation, thereby boosting waqf's national shares by ensuring a proper allocation of cash waqf. The regulator should be more strict in monitoring nāz˙ir practices. For instance, it could include a periodic assessment of waqf entities.

Originality/value

This study is original in nature; there is no previous study that addresses the millennial’s perspective toward cash waqf in Indonesia. Hence, this study presents precious information for policy makers, practitioners and researchers.

Details

ISRA International Journal of Islamic Finance, vol. 14 no. 1
Type: Research Article
ISSN: 0128-1976

Keywords

Article
Publication date: 5 September 2016

Mohamed Asmy Bin Mohd Thas Thaker, Mustafa Omar Mohammed, Jarita Duasa and Moha Asri Abdullah

This paper aims to attempt to offer a viable alternative model of source of financing which is known as integrated cash waqf micro enterprises investment (ICWME-I) model…

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Abstract

Purpose

This paper aims to attempt to offer a viable alternative model of source of financing which is known as integrated cash waqf micro enterprises investment (ICWME-I) model for micro enterprises in Malaysia.

Design/methodology/approach

The literature on the issues of accessing to finance faced by micro enterprises and cash waqf are reviewed critically and used in the attempt of proposing an alternative model.

Findings

The paper has developed ICWME-I model as a source of financing for micro enterprises. This model is expected to provide financial services by using cash waqf fund and involved the participatory contract between non-profit organization and micro enterprises. In addition, with the proposed model, there will be no collateral requirement, interest rate and other stringent requirements which usually imposed by existing conventional financial institutions.

Research limitations/implications

The paper is based on conceptual explorations of literature in the area of micro enterprises and cash waqf. This is a conceptual paper, so it did not use any empirical analysis.

Practical implications

The findings of this paper will provide micro enterprises with an alternative source of financing to start-up or expand their business by using cash waqf fund. The present study also has implications for government and policy makers. With the involvement of non-profit organization that is proposed in this model, it helps the government to reduce its expenses for the development of micro enterprises.

Originality/value

This paper offers an additional literature on cash waqf especially from the Malaysian context. Furthermore, this paper adds to the literature on waqf and cash waqf. The paper proposes a viable alternative model for micro enterprises as a source of financing by using cash waqf fund. This model incorporates Musharakah Mutanaqisah (diminishing partnership) as a financial arrangement between non-profit organization and micro enterprises.

Details

Journal of Islamic Accounting and Business Research, vol. 7 no. 4
Type: Research Article
ISSN: 1759-0817

Keywords

Book part
Publication date: 19 November 2018

Siti Nur Asmad Che Hassan and Asmak Ab Rahman

Purpose – This study analyses the potential of cash waqf for the socio-economic development of Kelantan state. A cash waqf scheme was established by the Kelantan Islamic…

Abstract

Purpose – This study analyses the potential of cash waqf for the socio-economic development of Kelantan state. A cash waqf scheme was established by the Kelantan Islamic Religious Council (Majlis Agama Islam Kelantan or MAIK) in an effort to contribute to the socio-economic development of the Muslim community in that state.

Methodology/approach – A qualitative method of data acquisition through interviews. Among the informants interviewed were persons well versed with waqf and Islamic affairs, and several relevant public persons in Kelantan.

Findings – The results indicate that the people of Kelantan are optimistic about the success of cash waqf, although the implementation of this instrument is still in its infancy there. The socio-economic development factors of the economy, education, well-being, agriculture, health and religious affairs can be improved with the implementation of cash waqf.

Originality/value – This chapter is the first attempt to discuss the potential of cash waqf in Kelantan.

Details

New Developments in Islamic Economics
Type: Book
ISBN: 978-1-78756-283-7

Keywords

Article
Publication date: 10 May 2021

Izra Berakon, Hendy Mustiko Aji and Muhammad Riza Hafizi

Cash-waqf is one of the transformative models of waqf assets submission to optimize the receipt of waqf of money in Indonesia. Currently, cash-waqf can be paid through the…

Abstract

Purpose

Cash-waqf is one of the transformative models of waqf assets submission to optimize the receipt of waqf of money in Indonesia. Currently, cash-waqf can be paid through the platforms that are integrated with digital sharia banking systems (DSBS) such as Jadiberkah.Id (Bank Syariah Mandiri), Digital Wakaf Hasanah (Bank Negara Indonesia Syariah) and other waqf online services provided by Bank Syariah Bukopin, Bank Commerce International Merchant Bankers Niaga and Bank Rakyat Indonesia Syariah. This study aims to investigate the role of DSBS in stimulating Muslim youth’s decision to endow cash-waqf in Indonesia.

Design/methodology/approach

This research involved 225 Muslim youth from several universities across the Special Province of Yogyakarta and Central Java as the research respondents. The analysis was conducted using partial least square structural equation modeling with WarpPLS 7.0.

Findings

The result of the structural model indicates that the research model is structurally good since it meets all model criteria. Perceived ease of use (PEU) is found as the most significant predictor of perceived usefulness (PU). Both generate a significant effect on Muslim youths’ attitudes toward DSBS. Overall, subjective norm (SN), perceived behavioral control (PBC), PU and attitudes are important determinants that lead individual decisions to use the online cash-waqf payment through DSBS. Finally, the research findings conclude that DSBS plays a significant role in encouraging the interest of young Muslim generations to participate in cash-waqf transactions.

Originality/value

This study seeks to contribute to the existing literature by enriching the discussion on DSBS’s service, especially in the context of optimizing the collection of Islamic Philanthropy through cash-waqf transaction. Also, this study integrates theory of planned behavior (TPB) and the technology acceptance model (TAM) into a single research model to explore the determinants of cash-waqf participation in digital era.

Details

Journal of Islamic Marketing, vol. 13 no. 7
Type: Research Article
ISSN: 1759-0833

Keywords

Open Access
Article
Publication date: 7 June 2021

Azniza Hartini Azrai Azaimi Ambrose and Fadhilah Abdullah Asuhaimi

The purpose of this paper is to comprehensively discuss the issue of risk vis-à-vis the perpetuity restriction principle inherent in waqf (Islamic endowment)…

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Abstract

Purpose

The purpose of this paper is to comprehensively discuss the issue of risk vis-à-vis the perpetuity restriction principle inherent in waqf (Islamic endowment). Specifically, it attempts to consolidate the axioms in both conventional and Islamic finance, such as the risk-return trade-off and al-ghunm bi al-ghurm (liability accompanies gain), with the perpetual nature of waqf. Overall, this paper attempts to find a resolution to the dilemma of perpetuity restriction inherent in cash waqf against the natural occurrence of the risk.

Design/methodology/approach

This paper is based on the secondary research methodology; past literature encompassing journal articles, books, relevant financial axioms, fatwas (Islamic rulings) and state enactments is critically reviewed to present its case. In regard to state enactments, only Malaysian state enactments have been used, thus restricting the study to the Malaysian case only.

Findings

This study contends that the dilemma of the perpetuity restriction and the natural occurrence of risk can be resolved through the integration of waqf risk management, especially concerning cash waqf, with the Islamic spiritual approach. By implementing standard operating procedures that inculcate awareness on waqf risk management and Islamic spirituality in waqf stakeholders (wāqif (donor), trustee and beneficiaries), the stakeholders may accept the reality of risk that is inevitable even after all efforts have been exhausted. In other words, the violation of perpetuity is exonerated given that mental faculties aligned with revealed texts have been exhaustively used beforehand.

Practical implications

Findings from this study may broaden the choice of investment avenues for waqf trustees while adhering to the perpetual restriction of waqf. More importantly, waqf trustees will not be forced to invest in interest-bearing securities or be involved in any usurious transactions just to obtain guaranteed returns and preserve the corpus of waqf.

Originality/value

This study offers a unique perspective on cash waqf risk management by re-analyzing the axioms and concepts of finance and waqf while observing the welfare of the beneficiaries.

Details

ISRA International Journal of Islamic Finance, vol. 13 no. 2
Type: Research Article
ISSN: 0128-1976

Keywords

Article
Publication date: 8 February 2021

Buerhan Saiti, Adama Dembele and Mehmet Bulut

The problem of poverty in the Muslim world has been posing multi-faceted challenges to the life of individuals and the relations of people. Although this problem has been…

Abstract

Purpose

The problem of poverty in the Muslim world has been posing multi-faceted challenges to the life of individuals and the relations of people. Although this problem has been gaining scholarly attention and raised in relation to various issues ranging from social injustice, rampant corruption, societal instability, wide social polarization and insurgent movements that affect the regional peace and stability at large, neither effective economic mechanism proposed nor implemented to address the problem effectively. In this regard, it is also important to appreciate the recent initiations in the field of Islamic economics to present an optional view to the existing and alien economic models in the Muslim world. Therefore, the purpose of this study is to fill up this research gap by proposing a model of mobilizing funds through the global cash-waqf institution.

Design/methodology/approach

The study adopts content analysis to construct this global cash waqf model for poverty alleviation in Muslim countries.

Findings

The “global cash-waqf model” was proposed as an alternative that could be implemented and used to overcome the poverty matter in Muslim countries. It is assumed that the model will facilitate the fund mobilization among Muslim countries, which in return is going to assure full distribution and redistribution of wealth to eradicate the poverty in the Muslim world. The model was structured with a global vision in both the collection side and the distribution side.

Originality/value

The model will facilitate the fund’s mobilization among Muslim countries, which in return achieves an Islamic goal of distribution and redistribution of wealth to assure the well-being of all humanities in the society.

Details

Qualitative Research in Financial Markets, vol. 13 no. 3
Type: Research Article
ISSN: 1755-4179

Keywords

Open Access
Article
Publication date: 12 October 2018

Anwar Allah Pitchay, Mohamed Asmy Mohd Thas Thaker, Al Amin Mydin, Zubir Azhar and Abdul Rais Abdul Latiff

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

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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.

Details

ISRA International Journal of Islamic Finance, vol. 10 no. 2
Type: Research Article
ISSN: 0128-1976

Keywords

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