Development of Waqf Assets: Potentials and Challenges in the Implementation of Cash Waqf-Linked Sukuk in Malaysia
DOI:
https://doi.org/10.53840/ijiefer300Keywords:
Cash waqf-linked sukuk (CWLS), waqf governance, Islamic social finance, cash waqf, sukuk.Abstract
Purpose – This study explores the viability of Cash Waqf-Linked Sukuk (CWLS) as an alternative financing instrument for waqf asset development in Malaysia while analysing the constraints that impede its implementation. Although Islamic social finance instruments are gaining increasing prominence, the integration between waqf institutions and capital market mechanisms remains relatively limited in Malaysia.
Design/Methodologies/Approach – This study employs a qualitative approach using semi-structured in-depth interviews with key stakeholders from waqf institutions, regulatory authorities, and the Islamic finance industry.
Findings – The findings reveal that CWLS has yet to be operationalised in Malaysia due to several challenges, including fragmented legal frameworks across state jurisdictions, limited institutional capacity, low market awareness, inadequate technical expertise, and governance-related issues. These challenges restrict innovation within Malaysia's waqf ecosystem. In response, this study proposes a collaborative implementation framework that enhances coordination among Yayasan Waqaf Malaysia (YWM), State Islamic Religious Councils (MAIN), and financial institutions, supported by improved policy coordination at both the federal and state levels.
Originality/Value – The study contributes to the literature by providing empirical evidence on the feasibility of CWLS in Malaysia and proposing a governance-oriented framework integrating Islamic social finance with capital market instruments.
Research Limitations/Implication – This study is limited by its qualitative design, which relies on semi-structured interviews with a relatively small number of key stakeholders. While this approach provides in-depth insights into the feasibility and implementation challenges of Cash Waqf-Linked Sukuk (CWLS) in Malaysia, the findings cannot be generalised to the broader waqf and Islamic finance sector. Future research could employ quantitative methods involving a larger sample of stakeholders to validate and extend the findings, thereby providing more generalisable evidence to support CWLS implementation.
Practical Implications – The findings provide practical implications for policymakers and practitioners aiming to unlock the potential of waqf assets through innovative and sustainable financing solutions.
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