In the Islamic system, Awqaf is a perpetual charity that means holding certain property and preserving it for the confined benefit of certain philanthropic purposes (Kabir Hassan, 2010).

WAQF MANAFAAH 1

GENERAL WAQAF

SPECIAL WAQAF

WAQF CAPITAL (Waqf Khairi)

Financing the Development of Waqf Part 1: Modes of Financing

In the Islamic system, Awqaf is a perpetual charity that means holding certain property and preserving it for the confined benefit of certain philanthropic purposes (Kabir Hassan, 2010).

Waqf manafaah – In the form of benefit that can be utilized (e.g.. Al- Quran ,dialysis center) or revenues (e.g.. rental, profit ) .

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Waqf capital – Capital of waqf can be in the form of movable and

immovable property including cash .

Concept of perpetuity and inalienability – when discuss about the waqf asset, there are issues pertaining concept of perpetuity

and inalienability that need to be consider .

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Muslim scholar are rigid about the transfer of title which actually limited to the principal capital of waqf/

waqf asset/ waqf mal but not towards its return/revenue/benefits.

Some scholar on the issue of transfer of title are flexible, where they allowed the transfer of rights on waqf property

without eliminate the concept of perpetuity and inalienability.For example : leasing and loaning .

Concept of perpetuity and inalienability – when discuss about the waqf revenues, there are issues pertaining concept of perpetuity

and inalienability that need to be consider .

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Waqf revenues – Jurist in Hanafi and Maliki school agree that whenever the capital of waqf need to be

refurbish/upgrade/ revive, the mutawallis will spend therevenues from the waqf asset itself. It seem that the revenue when spent on the redevelopment of waqf

property it is a lost of revenue .

*The rule of perpetuity and inalienability is not applicable as mutawallis used the waqf revenues not waqf capital .

WAQF FINANCING

. 1 .GOVERNMENT FUND

2 .CASH WAQF

3 .SHARES - SHARES FOR WAQF ( Common shares, unlisted i-REITs)

- WAQF SHARES

4 .JOINT VENTURE/ PARTNERSHIP - Mudharabah - Musyarakah

- Muzaraah

5 .IJARAH - Hukr

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WAQF FINANCING

.6 . SUKUK

- Sukuk intifa’ - Sukuk musyarakah

7 .ISTIBDAL

8 .ISTISNA’

9 .BUILT, OPERATE AND TRANSFER - Murabahah (BBA)

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GOVERNMENT FUND

Allocation of fund by government to Religious council for development of waqf land .

Source: JAWHAR

Cash Waqaf Cash that the waqif allocate for waqf. The cash

waqf should provide the perpetual benefits to ummah.

Eg: Dividends earned for example by individuals, state baitulmal, corporations are channeled to an Associated Waqf Institution as cash waqf.

The associated waqf institution will act as a mutawalli where it manage and invest the accumulated cash-waqf.

The revenue generated will then be directed to charitable projects after operational expenses have been deducted.

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THE CURRENT PRACTICE OF CASH WAQF FINANCING IN SELANGOR

Selangor Waqf Corporation collaborate with Bank Muamalat to form the Cash Waqf instrument.

The waqf funds being channeled to Healthcare and Education sector

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Waqaf Shares Corporate sector give their portion of

shares as waqaf item.

The best example is Johor Corporation that waqaf their shares to Waqaf An-Nur Corporation

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THE CURRENT PRACTICE OF WAQF FINANCING IN JOHOR

J-Corp waqf RM200 milion worth of it shares to SRC of Johor. The funds is put under Waqf An Nur Corporation. Based on the concept of perpetuity the waqf fund can give the continuous benefits.

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Shares for waqf – issue certificates/shares for waqf purposes.

Traditional ModeExample: Certificate that represents size or plot of area. ( Buy a certificate / Shares that issued by mosque committee for waqf purposes such as to develop the mosque.

Modern mode:

Ordinary SharesREITsUnit Trust

REITs for waqfSource: Dr. Siti Mashitoh

Sukuk Waqf Sukuk is an islamic bond with asset-back

and the sukuk holder owned the proportionate beneficial ownership in the underlying asset.

Muqaradah bond / Mudarabah bond – the bondholder act as capital provider, therefore he can be the bondholder of the project. The different with mudarabah shares, the bondholder only have right on the benefit that comes from the project but not towards capital appreciation.

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Lease - Hukr Hukr means monopoly or exclusivity

The lease practises basically using a long term lease. Instead of selling the waqaf asset, the Nazer can sell a right for a long lease.

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THE CURRENT PRACTICE OF WAQF FINANCING IN PULAU PINANG

The SRC of Pulau Pinang develop its waqf land. The project better known as Waqf Setee Aisyah. Based on the concept of hukr or long lease, they develop the housing project and shop lots on this land

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