Internal External

WAQF FINANCING

Acquire Asset Develop

SOURCES OF WAQF FINANCING

INTERNAL & EXTERNAL- WAQF FINANCING

Internal Financing Contributors

• Donation• Cash Waqf• Shares Waqf• Waqf Shares

(return)

Individual/Corporate Sector

Baitulmal Fund SRC

Govt. Grant Federal Government/State

Grant for Social welfare

NGO from inside & outside Malaysia

Corporate Social Responsibility(CSR)

GLC/Private Companies

External Financing

Instruments/Islamic Financial Contracts

Financial Institution

i. Istisna’

ii. Istisna’ Ijarah

iii. Musharakah mutanaqisah

iv. Ijarah Mausufah Fi al-

Dzimmah

Equity Financing

Shares, Sukuk

Others -

Obstacles

Issues: Waqf land/waqf asset cannot be use as collaterala.In normal condition the land or waqf asset that will be acquire or develop through bank’s financing will be use as collateralb.In relation to the rules of waqf, any asset that related to waqf cannot be used as collateral

Solutionsa. Among the solutions to get the bank’s approval are:i. SRC lease the land/asset not related to waqf to it subsidiary. The subsidiary use this asset as

collateral; ii. Cash deposit; iii. Government/Third party act as guarantoriv. Other types of collateral

Acquire Asset

• Acquire Asset (Building, Fixed Asset or other asset in the construction process or build by third parties)

• Among the contract/ mechanism that can be use by Islamic Bank are:

i. Istisna’

ii. Istisna’ Ijarah

iii. Musharakah mutanaqisah

iv. Ijarah Mausufah Fi al-Dzimmah

• SRC can make an installment payment to the bank via SRC internal fund.

Islamic Financial Contract – with bank or other entity

Islamic Financial contract that can be used:

•Istisna’: The price will be agreed upon earlier but the building/asset will be hand over later.

•Mudharabah : are joint venture contract – one party act as rabbul mal and the other act as mudarib.

•Musharakah : All partners contribute capital.

•Musyarakah Mutanaqisah : All partners contribute capital. The shares will be later own through continuously repurchase the shares back.

Equity Financing

a. Islamic Financial contract that can be used:

i. Musharakah

ii. Musyarakah Mutanaqisah

iii. Shares

iv.REITs/ Private Equity

v. Sukuk Musyarakah

vi.Sukuk Intifa’

Equity Financing – Musyarakah Waqf Setee Aisyah

Musharakah Mutanaqisah, Nurul Izzah dan Abdul Ghaffar (2013).

 

Sukuk Musharakah MUIS, Singapura. Shamsiah Abdul Karim (2009).

Sukuk Intifa’ Zam-zam Abraj al-Bayt, Arab Saudi. Jamil A.K Jaroudi (2007).