WAQF – A SLEEPING GIANT

Author: Herbi Arfah

Waqf (pl. awqaf) simply refers to the Islamic term for endowment of one’s assets dedicated for charitable causes. It is an instrument which helps facilitate private and public projects, hence its coverage has encompassed a wide range of socioeconomical aspects throughout Islamic history. Since the early days of Islamic civilization, Waqf has played an integral role in the development of society. But where is it now?

Did you know how Prophet Muhammad (S.A.W) introduced this instrument to back the development of Islam? It was in fact Waqf which facilitated the source of economy; from religious infrastructures, educational development, and even to cover the necessity of public utilities. After this, during the periods of the Righteous Caliphates, whenever the communities were under static internal and external pressures, one of the most prominent exit options used was Waqf endowment to accelerate the recovery phase.

Following this, the era between Umayyads period to Abbasids utilized and expanded Waqf as a model for many other purposes as well. It was during this time that more than 50 libraries were built through Waqf-based financing. Similarly, other areas of the educational sector that improved and got enhanced by Waqf revenue werescientific centers for scholars, of which one a prominent example is that of the Al-AzharUniversity in Cairo, Egypt. Beyond that, areas within the healthcare system were also backed by Waqf revenues that saw development of hospital infrastructures, right through to the dissemination of medical books for the benefit of students. Waqf-based revenues also made great contributions with regards to animals’ welfare by initiating special veterinary hospitals and food banks. This and many other historical examples have continuous proven  that Waqf is indeed a great foundation, one which if employed in the right manner, even before modern times, began focusing on sustainability and social welfare through financial instruments.

It is well known that the most prominent period when Waqf was sophistically institutionalized was during the period of the Ottomans. It is of no surprise that Ottomans were eager to expand the scope of Waqf from a socially oriented instrument to industrially established businesses. It was recorded in fact that three-quarters of arable soil under Ottomans were Waqf endowment and it has contributed to not less than 10% of total employment during this time. We may ask what was the secret formula Ottomans exercised in utilizing Waqf so efficiently to benefit one of the largest territories in human history? To put it simply, it is because of how they managed Waqf to create massive acceptance within the communities that lead to increased public engagement in endowment activities.

So how far we can realize Waqf’s golden age? We have seen how Waqf when it was professionally managed, created optimal potential for public welfare. But within the few decades prior to the political turmoil within the Ottomans Caliphates, Waqf management was left without any professional care. It was further worsened because of the interference of secular values in the Islamic world where religious entitlements were supposedly separated from worldly public affairs. In the aftermath, towards the end of the Ottomans, Waqf management was intervened excessively by high level political players. This meant that the centralized framework of Waqf management failed to maintain its strength and left Waqf endowment, mostly land properties, unproductive, idle, and neglected.

Now the question is can we revive the legacy? To put it bluntly; yes, but this depends on how we learn from the past and move forward to professionally reorientate Waqf management. This is pertinent due to Waqf potentials that have been discussed extensively in many forums since 2000s which encourage new models or structures of Islamic social financing based on Waqf. Some academicians and practitioners have been attempting to modernize Waqf scope through feasible banking model, Islamic insurance (i.e. Takaful), and even through Islamic capital markets instruments. These ongoing efforts, as unique as they may be, will be most efficient when the advance technology is embedded in structuring and implementing the whole Waqf system.

Until recently, unsatisfied and low credible assets management, narrow investment strategies, lack of transparency, and unintegrated system are among the biggest challenges in achieving a new dawn for Waqf revival. With the aim to be the frontier and innovator in transforming Waqf system, FINTERRA with its well-established WAQFChain initiatives has greatly conceived the solutions for most, if not all the challenges faced by Waqf. WAQFChain, with built-in blockchain technology, allows Waqf bodies, NGOs, Corporate CSRs, Trusts and other stakeholders with the opportunity to create or fund Causes, submit project outlines / plans which are required to fund Waqf and/or Charitable projects and Causes. With its unique offers, WAQFChain aims to create a new ecosystem for Waqf development to revive it to be the golden instrument it was once in the historic, prosperous past of the Islamic economic system. To find out more about the capabilities and potential which WAQFChain offers, visit finterra.org and mywaqf.com for more information.