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In line with corporate waqf principles 1) to create an Islamic in stitution catering to the societys need

with element of corporate entity 2) to carry out the responsibility to the ummah for eternity 3) to

voluntarily share wealth, time and expertise 4) to generate wealth and protection of the income, and

5) to establish an incorporation instrument that is trustworthy and wholly; the objectives of

corporate waqf are (Ministry of Finance, 2011):

1. Ability to expand and generate wealth for individuals, private and public sector in global arena

2. Professional management

3. Preservation of the ummah economic ownership through protection of the assets

4. Released of the ummahs undeveloped assets

5. Strengthening of the ummahs economic welfare

6. assist government in nations development and reduction of spending, deficit and debts

Shaikh NomanWaqf : A Proposed Approach for Sustainable development

Can find lots of waqf models such as:

Educational,

Health services,

Microfinance - Institution provides finance on the basis of Islamic mode of finance.

Qard-e-hasan - Waqf provide interest free loan in shape of cash or any capital asset.

Habib Ahmed - Waqf-Based Microfinance: Realizing the Social Role in Islamic Finance

In case of small firms with no prior history, the asymmetric information is severe from the financiers'

perspective. Bennett (1998) points out some barriers that accentuate the asymmetric information

problems in case of smaller enterprises in developing countries. Physical barriers of poor

infrastructure like lack of markets, roads, power, communications, etc., can worsen both the adverse

selection and moral hazard problems. Physical constraints inhibit the financial institutions to gather

information on their prospective clients and once credit is advanced, it is difficult to monitor the use

of the funds. Socioeconomic factors of clients like low numerical skills due to illiteracy,

caste/ethnicity/gender aspects preventing interaction also add to the adverse selection problem.Microentrepreneurs lack of collateral due to poverty can increase themoral hazard problem. These

barriers would make assessment of projects and monitoring the use of loans very costly.

Furthermore, as the size of the loan for microenterprise is small, the administering cost of per-unit

loans increases. These factors make it economically non-viable for traditional financial institutions to

offer credit to microenterprises.

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UMUM

Hassan & Abdullah


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waqf affairs are the responsibility of the Islamic Religious Council of each state. The Islamic Religious

Councils are empowered to administer and manage waqf properties in accordance with hukum

syarak.

the government of Malaysia has formed a department for zakat, waqf and hajj under the Prime

Ministers Department on the 27th March 2004 with the aim of making the administration systematic

and effective. This department however does not have an authority to administer and manage waqf

properties but rather plays a role as a planning coordinator and observes the waqf matter.

In term of courts jurisdiction, waqf lies within the jurisdiction of the syariah court as provided in List

II (1) of the Ninth Schedule of the Federal Constitution which provides that except with respect to the

Federal Territories of Kuala Lumpur and Labuan, Islamic Law and personal waqf the

determination of matters of Islamic Law. Thus, waqf is one of the subject matters which are under

the states jurisdiction.

For example, in Selangor the jurisdiction for the Syariah High Court to hear and determine waqf is

founded in the Administration of the Religion of Islam (State of Selangor) Enactment 2003, in Pulau

Pinang, it is provided in the Administration of Islamic Religious Affairs (State of Pulau Pinang)

Enactment 1993 and in Federal Territory, the Administration of Islamic Law (Federal Territories) Act

1993.

In Selangor and Malacca, the provisions of law on waqf are provided under the Enactment of Wakaf

(State of Selangor) 1999 (hereinafter referred to as the Enactment) and the Enactment of Wakaf

(state of Malacca) 2005 and the other states that do not have such enactment are governed by the

states administration of Islamic law. Section 2 of the Enactment defined waqf as any property from

which its benefits or interest may be enjoyed for any charitable purpose whether as waqf am or waqf

khas in accordance with syariah principles, but does not include a trust which is defined under the

Trustee Act 1949.

It is a requirement for every waqf khas to be declared and validated by Sultan and the Islamic

Religious Councils are the sole trustees of the waqf property or al-mutawalli. Section 32 of the

Enactment provides that notwithstanding any provision to the contrary contained in any instrument

or declaration creating, governing or affecting it, the Islamic Religious Council shall be the sole

trustee of all waqf, whether waqf am or waqf khas. Section 91 (2) (b) of the Administration of the

Religion of Islam (State of Selangor) Enactment 2003 states that private waqf made by certain person

during death illness must be in writing before a witness and any waqf more than one third shall be

invalid.

The Islamic Religious Council of Pulau Pinang followed this model in constructing 21- storey of UMNO

Towers building in Georgetown. This building was erected on waqf land and the council leased the

building from the developer for a period of 99 years. At the end of the lease period the council will


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This mode of substitution may be defined as the exchange of a Waqf property for another that

provides at least similar income or service without any change in the provisions laid down by the

founder.

This may be true where the whole piece of land, a tool, or another object is substituted with

another. Substitution of (munaqalah / muawadah) of one waqf, with another according to Ibn

Rushd (a maliki jurist) is permitted if it is ruined and there is no means to reconstruct; provided the

exchange is with permission of court and be recorded and witnessed in the court.

The Shafiies do not allow a mosque even if it is ruined and its rebuilding is impossible, but has given

different opinions in a land that does not produce or generate income. In the latter case some jurists

of the school allowed the change and exchange of the given piece of land.

The condition of ibdal according to Shafii is that it should not contradict the conditions of the

settler.

Kahf identifies increase of income and services the sole benefit of ibdal. The classical example of this,

according to Kahf, is a school building in a sparsely populated area that can be exchanged with aschool building in a densely populated area if the new owner of the former Wqaf property happens

to have an alternate usage for it.

Istibdal (change property to cash value)

Kahaf defined istibdal as the sale of all or part of a waqf land and to purchase with its proceeds

another piece of land dedicated as waqf for similar purposes. This is what kahf called substitution.

Substitution of waqf by its cash value is not popular among many jurists with exception of the

hanafis. It is reported that Imam Malik did not allow the sale of waqf estate at all.

Nevertheless it is also reported that Rabiah from Malikies allowed the sale of waqf property, called

muawadah, provided the proceeds of the sale are used to purchase another piece of land and then

declared as waqf, the same as the previous.

Shafiis, similarly, are very strict. Some jurists of the school allowed the change and exchange of the

given piece of land. According to some Shafiis, however, a horse for jihad can be sold, and according

to Ramli from the same school, the mosque if impossible to rebuild, can be broken, the items sold,

and the proceeds be kept if there is hope for its reconstruction, otherwise the proceeds can be spent

on another mosque.

According to Hanbalis, if the benefits of waqf are not obtainable, such as where a house is ruined, a

land is turned barren, or a mosque, for some reason, is not used by people for prayer, and cannot be

developed due to lack of finance, the land can be sold provided the purchased land is considered

waqf too in the same category as the first one, or the money is used to improve another waqf. For

example a piece of waqf land may be sold in order to improve the remaining part of it.

The sale of mosque is an extreme case, yet to these jurists, if needed, can be sold.

The Hanafi jurists have unanimously approved the process of istibdal in the following circumstances:

1. The donor makes provisions thereto.


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2. The donor does not make any provision that is he negates or is silent about, but the property

becomes stagnant as it does not produce anything, or its expenses and produces are equal. In the

both cases istibdal is valid.

3. The donor provides for istibdal and the property is still productive, but its exchange is more

profitable in general. In this case, istibdal is not valid according Ibn Nujaim and Ibn Abidin. Thus it is

the discretion of the donor to make such condition. If the founder is silent, then change or exchange

of the property is allowed only if it is necessary but not when doing so is more beneficial.

4. Istibdal shall be made by the state (court) in general philanthropic trusts; otherwise the power is

vested in the administrator.`

MAINS internally finances its development activities (including the maintenance and operational

needs) through baitulmal, saham waqf, and other waqf funds derived from the special waqf and the

general waqf. Baitul-mal acts as investor, a benevolent creditor and a donor. Baitulmal is known as

investor for its 108 own property. In the case where Baitul-mal is an investor the accounts of Baitul-mal and waqf for returns and profit of the investment are kept separately.

An interesting finding in relation to the concept of waqf appears to be that the state of Malacca has

raised donations through golf tournament and other activities. Such donations were termed sadaqah

which has raised more then RM 500000 for the project of orphanage home in Malacca. This amount

was either in terms of cash, service or physical endurance. The point to note is that raising cash funds

through cash donation and services has tremendous potential for growth. Should the concept of

waqf be liberalized as proposed in chapter two, the collected funds would be considered waqf. This

will certainly boast raising finance for the development of waqf properties as it is an additional

encouragement or spiritual incentive to the public to participate in many similar activities. This is

possible and definitely it is in the interest of Muslims.


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Dapatan

Istisna and bai bi thaman al-ajil seem to be recognised only by the state of Malacca but they are not

practiced yet. Negeri Sembilan on the other hand indicated to practice none except saham wakaf.

Apart from the differences, some of the modes are unanimously agreed or resumed to be agreed by

the given states.

i.) In terms of popularity of some Islamic financial modes, it is clear that musharakah ranks the first as

all three states recognises it.

ii.) Saham wakaf (cash proceeds of) which was listed in the recognised and practiced modes of

financing received unanimous recognition and also practiced, for all of the states apply it as a mode

of finance for the development of their properties.

iii.) While benevolent borrowing (qard hasan) and istibdal were not given under the list of recognised

modes of fiancing, all three states have indicated to apply both of them.

Over all, saham wakaf, benevolent loan, and istibdal are the primaries financial methods for the

development of waqf properties. This is followed by musharakah and others respectively.To put the above data in a different perspective i.e. in terms of classification of the different modes

of financial instruments, it is surprisingly clear that some of the modes proposed by modern and

even classical jurists are neither recognised nor practiced yet (see table 4.6).

Dari segi kedudukan keseluruhan negeri termaju ialah Wilayah Persekutuan Kuala Lumpur menduduki tempat

pertama diikuti Pulau Pinang (2), Melaka (3), Selangor (4), Negeri Sembilan (5), Johor (6), Perak (7), Perlis ( ,

Kedah (9), Pahang (10), Sarawak (11), Terengganu (12), Kelantan (13) dan Sabah (14).

Alternative Development Financing Instruments for Waqf Properties

Muhammad Tahir Sabit 2009

Additionally, the ownership of the developed property or its instalments payable by waqf institutions

may last for twenty-five to thirty-five years. Losing partial income to non waqf entities, from the

developed property can be substantial.

Kahf

Chapter two will be devoted to studying the traditional modes of financing Awqaf properties,

especially, those mentioned by Fuqaha and other social scientists in the Islamic cultural heritage.

Hence, five modes of financing will be studied: (1) increasing the principal of the Waqf by adding

newly established Awqaf; (2) exchange the Waqf property by another with higher usufruct; (3)

borrowing on the Waqf with repayment from the Waqf net revenues; (4) Al Hukr (long lease with a

large advance payment); and (5) lease with dual payment. And we will analyze the condition of

success and failure of each of these modes from a theoretical point of view as well as from the

applicability point of view.


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A productive waqf land needs to be developed and putting an investments to it.

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