Purpose — This research examines cash waqf-linked ṣukūk (CWLS) and ascertains its viability in Malaysia under the relevant legal and regulatory frameworks of waqf (Islamic endowment) and ṣukūk (Islamic investment securities). This is explored with a view to a possible implementation of CWLS in Malaysia by Islamic social and commercial finance institutions.
Design/Methodology/Approach — The research adopts a qualitative methodology and uses content analysis in synthesising relevant data to determine the viability and prospects of CWLS in Malaysia. Semi-structured expert interviews were conducted, and data obtained therefrom was analysed alongside published literature on CWLS to identify issues in the applicable waqf and ṣukūk legal and regulatory frameworks that pertain to CWLS viability.
Findings — The combination of cash waqf with ṣukūk is potentially an impactful financing mechanism for mobilising funds whereby charity is linked with productive and income-generating economic activities. CWLS facilitates the development of alternative social financing instruments that expedite social welfare and economic revival in the aftermath of the COVID-19 pandemic, as Indonesia demonstrates. However, Malaysia’s waqf legal and regulatory framework have established a decentralised system of waqf administration, which may impede the efficacy of the structure and operations of CWLS in the country. Hence the research proposes a reform of the framework to enable the establishment of a more capable and viable CWLS structure for digital, retail and institutional investors.
Originality/Value — This research discovers hindrances to the prospect of CWLS in the legal, Sharīʿah and regulatory dynamics of waqf and ṣukūk in Malaysia that previous studies overlooked. This research provides an in-depth understanding of challenges to CWLS’ implementation in Malaysia with invaluable insight for regulators, policymakers, practitioners and researchers, thereby contributing to practical knowledge in the area.
