Waqf (the plural is awqaf) is an Arabic word derived from the root verb waqafa. It is a form of Islamic endowment or an inalienable trust. According to Lev (2005), waqf is epitomized as the highest form of charity in Islam. Notably, its benefits are not only restricted to the Muslim community, but it goes beyond religious, sectarian, cultural and racial boundaries. There are no direct injunctions on waqf in the Quran, however the detailed concept of waqf can be found in the hadith.
From the birth of Islam in the Arabian Peninsula till the Ottoman caliphate period (15th – 19th century) the glorious waqf administration continued to flourish. During the period of the Ottoman caliphate, it was estimated that three-quarters of all the arable land belonged to waqf (Boudjellal, 2008). Even during the Umayyad, Abbasid and Ottoman caliphate, waqf had a strong presence in other Muslim minority principalities. It was through these waqf lands that one of the major economic problems, i.e. employment, was addressed by creating job opportunities (Cizakca, 1984). Apart from waqf for religious purposes, education was the second largest recipient of waqf proceeds. It is noteworthy that the financing of education through waqf led to several positive outcomes, such as free education.
Unfortunately ever since the colonial occupation of many Muslim countries, the development of waqf properties has become very sluggish. This situation is further worsened by the presence of vast idle and stagnant waqf lands attributed to poor management and administration of institutions handling awqaf. Besides that, the general public believes that waqf is mainly associated with properties that are for religious and educational purposes only, and thus lack the proper understanding of the potential dynamics in the concept of waqf.
Apart from the general discussion on waqf mentioned above, the article will further highlight the various contemporary modes of financing through waqf. However, due to the limitations of the article, it will focus mainly on the development of waqf through sukuk. This discussion will provide a more exciting turn-out of waqf through case-studies underlined. The final part of the article will deal with issues raised during the development of waqf through sukuk, followed by the conclusion and recommendation on the way forward.
