Revitalization of Waqf for Socio-Economic Development, Volume I (eBook)

Foreword 5
Acknowledgements 6
Contents 9
Notes on Contributors 12
List of Figures 23
List of Tables 26
Part I Role of Waqf Management in Socio-Economic Development 28
Chapter 1 Introduction 29
References 39
Chapter 2 Role of Cash Waqf Deposit (CWD) as an Instrument for Socio-Economic Development: Bangladesh Perspective 40
1 Introduction 40
1.1 Objectives of the Paper 41
1.2 Organization of the Paper 42
2 Definition of Cash Waqf Deposits (CWD) 42
2.1 Takaful Waqf Model 43
3 Role of Islamic Banks in Management of Cash Waqf Deposits in Bangladesh 44
3.1 Cash Waqf Deposit Management by the Islamic Banks in Bangladesh 44
3.2 Parties to a Cash Waqf 46
3.3 The Investment Strategy of Cash Waqf Deposits 46
3.4 Profit Distribution Framework of CWD 47
Strategies Followed by the Banks to Popularize the Cash Waqf Deposits 50
4 Issues and Problems in Management of Cash Waqf Deposits in Bangladesh 52
5 Future Directions for Better Management of Cash Waqf Deposits 53
6 Final Remarks and Recommendations 54
References 55
Chapter 3 Waqf Philanthropy and Orphans’ Socio-Economic Development in Northern Nigeria Based on Maqasid al Shariah Principles 56
1 Introduction 56
2 Islamic Philanthropy Concept 58
3 Waqf 59
4 Major Concepts and Categorizations in Maqasid al-Shari’a 60
5 Methodology 61
6 Analysis and Findings 62
7 Conclusions and Recommendation 66
References 67
Chapter 4 FinTech-Enabled Cash Waqf: Effective Intermediary of Social Finance 68
1 Introduction 68
2 Overview of Waqf and the “FinTech-Enabled Cash Waqf” 70
2.1 Overview of Waqf and the Scope of This Paper 70
2.2 Overview of the “FinTech-Enabled Cash Waqf” 71
3 Practical Forms of the FinTech-Enabled Cash Waqf 74
3.1 Prerequisites for Practice 74
3.2 Potential Forms of FinTech-Enabled Cash Waqf 76
4 Significance of FinTech-Enabled Cash Waqf in Product Development 78
4.1 Criticism Against the Current Form of Product Development 78
4.2 FinTech-Enabled Cash Waqf Can Contribute 79
5 Conclusion 79
References 80
Chapter 5 Experiences and Lessons of Cash Waqf in Bangladesh and Other Countries 84
1 Introduction 84
2 Definition of Cash Waqf 85
3 Main Features of Cash Waqf 86
4 Economic Values of Cash Waqf 87
5 Current Practices of Cash Waqf in Bangladesh 89
6 Cash Waqf—An Alternative Islamic Financing Model in Bangladesh 89
6.1 Operational Guidelines of Cash Waqf-Based Products Adopted by Some Islamic Banks in Bangladesh 90
Cash Waqf-Based “Mudarabah Deposit Account” 90
The Objectives of Cash Waqf Mudarabah Deposit Accounts (CWMDA) 91
Cash Waqf in Perpetuity and Mutawalli’s Discretions 91
CWMDA Created with Lump Sum Amount or by Installments 92
Issuance of CWMDA Certificate and Receipt 92
How CWMDA Operates 92
Investment in Conformity with Shariah 92
High Rate of Investment Income 92
Distribution of Usufruct to the Beneficiaries 93
Profit–Loss Sharing 93
Cash Waqf Management Committee 93
Readily Available List of Purposes 93
Family Rehabilitation 93
Education, Sports, Da’wa and Culture 93
Health and Sanitation 94
Social Service 94
Arrangement After Serving the Specific Purpose or Death of W?qif 94
Liabilities and Rights of the Bank 94
7 Cross-Country Review of Cash Waqf 95
7.1 Bahrain 95
Objectives of the Waqf Fund 95
Contributors of Waqf Fund 96
A Waqf Fund Sponsored Programs 96
Human Capital Development in Islamic Finance 96
Research and Collaboration with Other Nations 96
Curriculum Development 96
7.2 Indonesia 97
DDR Cash Waqf Fund 97
Health Care 97
Education 97
Economic Empowerment and Social Welfare 98
7.3 Kuwait 98
Objectives of Kuwait AWq?f Public Foundation (KAPF) 98
Waqf Fund Board of Directors 99
7.4 Malaysia 99
Public Response to Cash Waqf in Malaysia 99
Potential for Cash Waqf in Malaysia 100
Cash Waqf Shares and the State Islamic Religious Council (SIRC) 100
7.5 Singapore 101
Cash Waqf by Salary Deduction 101
7.6 Turkey 101
Public Facilities Supported by Cash Waqf 102
Financial Services Provided by Cash Waqf 102
Revenue Earned by Cash Waqf 102
Cash Waqf and the Debate on Interest 102
8 Role of Cash Waqf in Poverty Alleviation 103
9 Recommended Cash Waqf Model for Bangladesh 103
10 Conclusion 106
References 107
Chapter 6 The Role of Waqf (Endowment) in Economic Development of Bosnia and Herzegovina: A Historical Overview and Future Prospects 109
1 Introduction 109
2 Defining Waqf (Endowment) 110
3 The Institution of Waqf in Islam 111
4 The Role of Waqf in Economic Development of Bosnia and Herzegovina 115
4.1 Phase I—The Ottoman Period 115
4.2 Phase II—The Habsburg Monarchy 119
4.3 Phase III—The Kingdom of Serbs, Croats, and Slovenes (SHS) 122
4.4 Phase IV—The Socialist Federal Republic of Yugoslavia (SFRY) 123
4.5 Phase V—Pre- and Post-Dayton Peace Accord 124
5 Conclusions 126
References 127
Chapter 7 Using Waqf for Socio-Economic Development in Bangladesh: Potentials, Challenges, and Policy Directions 130
1 Introduction 130
2 Research Methodology 133
3 Literature Review 133
3.1 Concepts of Waqf, Its Features, and Uses 133
3.2 Review of Articles/Papers 135
4 Current Status, Potentials, and Significance of Waqf in Bangladesh 138
4.1 Current Status of Waqf in Bangladesh 138
4.2 Regulation and Supervision of Waqf Estates 139
4.3 Potentials of Waqf Development in Bangladesh 139
Development of Existing Waqf Estates 140
Growing Income of Middle Class 140
Expanding Corporate Sector 140
Great Potentials of Cash Waqf 140
Bright Prospect of Remittance Waqf 140
Potentials of Micro-Waqf 140
4.4 Significance of Waqf Development in Bangladesh 141
Reducing Poverty and Achieving Sustainable Development Goals 141
Promoting Financial Inclusion 142
Reducing Public Expenditure 142
Distribution of Income and Wealth 143
Permanent Social Security 143
Transforming Social Capital 143
Developing an Inclusive Economy 144
5 Methods of Financing Waqf Properties 144
5.1 Al-Hukr (Indefinite Lease) 144
5.2 Al-Ijarahtain (Dual Lease) 145
5.3 Mursad Loan 145
5.4 Istisna 146
5.5 Diminishing Musharakah 146
5.6 Build-Operate-Transfer (BOT) 147
5.7 Cash Waqf 147
5.8 Corporate Waqf 147
5.9 Issuance of Sukuk 148
6 Challenges for Developing Waqf in Bangladesh 149
7 Recommendations 150
8 Concluding Remarks 152
References 153
Chapter 8 Cash Waqf Deposit Product: An Innovative Instrument of Islamic Banks for Socio-Economic Development in Bangladesh 157
1 Introduction 157
1.1 Cash Waqf 158
1.2 Waqf Literature Review 160
2 Research Methodology 164
3 Theoretical Underpinning of Cash Waqf 164
3.1 Cash Waqf 164
3.2 The Application of Cash Waqf as Modern Instruments 164
Waqf Shares Model 165
Corporate Cash Waqf Model 165
The Waqf Mutual Fund Model 165
Wakala with Waqf Funds Model 166
The Cash Waqf Deposit Product Model 166
4 Cash Waqf Deposit Product Development in Bangladesh 167
4.1 Objectives of Cash Waqf Deposit Product 168
4.2 Guidelines of Governing the Operations of Cash Waqf Deposit Product 169
4.3 The Modus Operandi of the Cash Waqf Deposit Product 170
4.4 Cash Waqf Certificate Scheme 172
5 Cash Waqf Deposit Product for Socio-Economic Development in Bangladesh 173
5.1 Growth of Cash Waqf Accounts, Deposit, and Profit Distribution of IBBL 177
5.2 Opportunities of Cash Waqf Development Through Islamic Banks in Bangladesh 177
5.3 Top Clients of Cash Waqf and Two Cases of IBBL 179
6 Proposed Integrated Approach of Cash Waqf and Islamic Microfinance 181
7 Implication of Cash Waqf Toward Country’s Economic Development 185
8 Conclusion 186
References 188
Chapter 9 Can We Combine Sukuk and Waqf? A Case Study of Indonesia 190
1 Introduction 190
2 ANP, BOCR, and Waqf Research 193
2.1 Sources and Methods of Data Collection 193
2.2 General Description of the Method of Analytic Network Process (ANP) 193
2.3 The Analysis of Benefits, Opportunities, Costs, Risks (BOCR) 194
2.4 Research Stages 194
2.5 Data Processing 195
3 Problem Complexity 196
3.1 Decomposition 196
Benefit 196
Benefit for Issuer 196
Benefit for Investors 197
Opportunity 197
Opportunity for Issuer 197
Opportunity for Investors 198
Cost 198
Cost for the Issuer 199
Cost for Investors 199
Risk 200
Risk for Issuer 200
Risk for Investors 200
Alternative 201
Regulation 201
Partnership 201
Education 202
3.2 Results of the Geometric Mean and Rater Agreement 202
4 Ready to Launch Sukuk Waqf? 208
Appendix 1 210
Appendix 2 210
References 211
Chapter 10 Opportunities and Challenges of Waqf in Bangladesh: The Way Forward for Socio-Economic Development 213
1 Introduction 213
1.1 Meaning and Origins of Waqf 213
1.2 Waqf Institutions in Bangladesh: The Regulatory Framework 215
2 Genesis of Waqf Laws and Regulations in Bangladesh 217
3 The Present Legal and Administrative Structure of Waqf Administration in Bangladesh 218
4 The Key Barriers to the Development of Awaqf in Bangladesh 220
4.1 Inadequate Manpower 220
4.2 Unregistered Waqf Properties 220
4.3 Illegal Occupation and Misappropriation of Waqf Properties 221
4.4 Uncollected Arrears 222
4.5 Operational Inefficiency and Problem of Waqf Disputes 222
4.6 Absence of Provisions in the Waqfs Ordinance 1962 Relating to the Development of Waqf 223
4.7 Integrity of the Mutawallis and Their Qualifications 224
4.8 Unauthorized Alienation 225
4.9 Personal Use of Waqf’s Compensation Money 226
4.10 Lack of Progressive and Innovative Ideas 226
5 The Prospects of Utilizing the Potential of Waqf in Bangladesh 227
5.1 Waqf Income and the Program for Community Development and Eradication of Poverty 227
6 Suggestions, Recommendations, and Plans for Action 228
6.1 Need for a New Waqf Act 228
6.2 Development of Urban Waqf and Issuance of Waqf Bond 229
6.3 Collaboration with Other Countries 230
6.4 Establishment of National Waqf Advisory Board (NAWAB) 230
6.5 Education and Training for Mutawallis 231
6.6 Increasing Staff Benefit 231
6.7 Waqf Tribunal 231
7 Summary and Conclusion 232
References 232
Part II Waqf Management and Poverty Alleviation 233
Chapter 11 Integration of Zakat and Awaqf for Poverty Alleviation and Development 234
1 Introduction 234
1.1 Definition of Basic Human Needs: Conventional Concept 235
1.2 Definition of Human Needs: Islamic Perspective 236
1.3 Definition and Significance of Zakat 236
1.4 Significance of Awaqf 237
1.5 Significance of Conventional Microfinance 238
1.6 Poverty Alleviation and Islamic Microfinance 239
Unique Position of Bangladesh in Microfinance 239
Islamic Modes of Microfinance 240
1.7 Poverty Situation in the World and in Bangladesh 242
2 Role of Zakat for Poverty Alleviation 242
3 Role of Awaqf for Poverty Alleviation 245
3.1 Introduction 245
3.2 Waqf Is Charitable by Nature 246
3.3 Waqf Fulfills Needs of the Backward Sections 246
3.4 Waqf for Common Good and Development Needs 246
4 Zakat and Awaqf as Complementary Tools for Poverty Alleviation 247
4.1 Comparative Features of Zakat and Waqf 247
4.2 Comparative Advantages/Limitations of Zakat and Awaqf 248
5 Integrated Approach of Zakat and Awaqf as Poverty Alleviation Tools 248
5.1 Develop Ideal Islamic Microfinance 249
5.2 Develop Strong and Sustainable IsMFIs 250
5.3 Use of Appropriate Technology 250
5.4 Investment for Earning Profit 250
5.5 Addressing Development Needs 252
5.6 Contribution of Awaqf and Zakat 252
6 CZM Model Operating in Bangladesh 252
6.1 Achievements (Cumulative) 253
6.2 Operational Strategies of Major Interventions 253
6.3 Planning 257
6.4 Zakat Fair, Seminar, Round Table 257
6.5 Integrity with the SDGs 258
6.6 Rationale of Integrating Awaqf and Zakat 258
Lack of Infrastructure 259
Profit Earning Ventures/Businesses/Investments 259
Supplementary Income Earning Structure 259
Ambulance/Vehicles for Efficient Service 259
Appropriate ICT 260
7 Conclusion 260
References 260
Chapter 12 Waqf Resource Mobilization for Poverty Alleviation Based on Maqasid Framework 262
1 Introduction 262
2 Significance of Poverty Alleviation in IsDB Member Countries 263
3 Interdependence of Maqasid al Shariah with IDA Funds in Poverty Alleviation 265
4 International Development Association Versus Global Waqf Funds 267
5 Ranking of IsDB Member Countries—Maqasid al Shariah Composite Index 267
6 Ranking of IsDB Member Countries—Human Development Composite Index 271
7 Computation for CIPA with MSCI at Differing Weights 277
8 Resource Allocation Formulas 278
9 Computation for IDA with MSCI and HDI 279
10 Conclusion 282
References 283
Chapter 13 Islamic Microfinance and Rehabilitation Program for the Slum and Floating Population by the Waqf Funds: A Proposal Based on Empirical Evidences for the Muslim Countries 285
1 Background of the Study 285
1.1 A Discussion on the Concept of Waqf and Waqf Institution in Muslim Countries 286
Definition, Classifications of Waqf and Its Application 286
Waqf Authority and Number of Waqf Institutions in the Muslim Countries 287
1.2 A Discussion on the Concept of Slum, Slum Population, and Urban Population in the Muslim Countries 287
1.3 Nature, Services, and Status of Islamic Microfinance in the World 288
Nature of Islamic Microfinance 288
Product and Services of Islamic Microfinance 289
Sources of Fund in Islamic Microfinance 289
Islamic Modes of Investment Employed in Islamic Microfinance Industry 289
Islamic Microfinance and Its Coverage in the Muslim Countries 290
2 Objective 291
3 Methodology 291
4 Literature Review 291
5 Rationale of the Study 292
5.1 Why Is the Islamic Microfinance? 292
5.2 Why Is the Slum Population? 293
6 Islamic Microfinance and Rehabilitation Program for the Slum and Floating Population By the Waqf Funds: A Proposal Based on Empirical Evidences for the Muslim Countries 293
6.1 The Model 293
6.2 Implementation 294
7 Conclusion 299
8 Scope for Further Research 300
Appendix: Islamic Microfinance Institutions in Bangladesh 300
References 300
Chapter 14 The Investment of Waqf Properties and Infrastructure Development 303
1 Introduction 303
2 Definition/Initial Considerations 305
3 Infrastructure Development and SDGs 306
4 Status of Infrastructure in Developing Countries/MCs 307
5 Global Investment Gap 308
6 IDB Financing Modes for Infrastructure Development 310
7 Financing Infrastructure Development in IDB MCs: Challenges and Priorities 316
8 Waqf and Social Investment Gap 320
9 Summary and Conclusion 323
References 325
Index 327