INTERNATIONAL WAQF &

BLOCKCHAIN FORUM 2018

FINTECH AND FUTURE OPPORTUNITIES
FOR THE DEVELOPMENT OF WAQF

Assoc. Prof. Dr. Magda Ismail

Thursday 1st March 2018
Bank Rakyat Conventional Centre,

A member of
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 FINTECH & THE FUTURE
OPPORTUNITIES FOR THE
DEVELOPMENT OF WAQF

• An overview on waqf?
Content • Recent Development of Idle waqf
• Recent creation of cash waqf
• Challenges facing the current waqf development
• Fintech and the future opportunities for the
development of waqf
• Crowdfunding & the development of waqf
• Blockchain, Cryptocurrency & the development
of waqf
• Call for the creation of Waqf Coin

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 AN OVERVIEW ON WAQF

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 DEFINITION OF WAQF
• IMMOVABLE WAQF: “The confinement
of an asset, movable or immovable, by a
founder and the dedication of its usufruct in
perpetuity to the beneficiaries/welfare of
society”.
• MOVABLE/CASH WAQF: “The
confinement of an amount of money by a
founder(s) and the dedication of its usufruct
in perpetuity to the welfare of society”
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 ESSENCE OF WAQF IN
AL-QURAN & HADITH

َ ‫لَ ْن تَنَالُوا ْالبِ َّر َحتَّى تُ ْنفِقُوا ِم َّما تُ ِحب‬

‫ُّون َو َما تُ ْنفِقُوا ِم ْن َش ْي ٍء فَإِ َّن هَّللا َ بِ ِه َع ِلي ٌم‬
By no means shall ye attain righteousness unless ye give
(freely) of that
which ye love; and whatever ye give, of a truth God
knoweth it well.
(Surat al-‘Imran, 3:92)
‫إذا مات االنسان انقطع عمله إال من ثالث؛ صدقة جارية‬
‫وعلم يُنتفع به وولد صالح يدعو له‬
The Prophet (s) said: When a man dies his acts come to
an end, except three things, recurring charity,
knowledge (by which people benefit), and pious
offspring, who pray for him.
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 CLASSIFICATION OF WAQF
PROPERTY
SUBJECT TO THE ENDOWED
PROPERTY
Land, fields, farms, agriculture lands
IMMOVABLE
Buildings such as mosques, houses,
WAQF
schools and hospitals.

Books, crops, weapons, animals,

MOVABLE
medical instruments, jewelry and cash-
WAQFS
money

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 CLASSIFICATION OF WAQF PROPERTY
SUBJECT TO THE BENEFICIARIES

• For the poor and needy

• Dedicating lands for mosques, schools,
PUBLIC WAQF hospitals, orphanages houses, guest
(WAQF KHAYRI, WAQF houses and land for cemeteries
‘AM) • Constructing highways, digging well
• Etc..

FAMILY WAQF The founder endows his property to his:

(WAQF AHL, WAQF KHAS) • Children and grandchildren,
• Relatives
• Specified people or group of people.

COMBINED/MIXED
WAQF
Waqf Mushtarak (Public + Family Waqf)

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 CONDITIONS ON THE
CREATION OF WAQF
Once a founder declares his property as waqf, his
IRREVOCABLE
heirs cannot change its status

Once the waqf is created it must be perpetual, in

PERPETUAL
order to ensure regular and continual support
towards the beneficiaries and the society at large.

Once waqf is created it cannot be the subject of

INALIENABILITY
any sale, disposition, mortgage, gift, inheritance,
or any alienation whatsoever.

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 FLEXIBLE STIPULATIONS FOR WAQF
DEVELOPMENT
1. Ziyadah (Increase) and Nuqsan
(Decrease)

2. Idkal (Addition) and Ikhraj (Removal) BENEFICIARIES

3. I‘ta’ (Granting) and Hirman

(Dispossession)

4. Taghyir (Replacement) and Tabdil

(Conversion)
WAQF ASSETS
5. Istibdal (Substitution) and Ibdal
(Exchange)
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DEVELOPMENT OF WAQF PROPERTIES THROUGHOUT
HISTORY

WAQF

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 RECENT DEVELOPMENT OF
IDLE WAQF

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 DEVELOPMENT OF IDLE WAQF PROPERTIES
CLASSICAL & TRANSFORMATION OF OLD
INNOVATIVE MODE OF WAQF INTO
FINANCING
• Stisna‘a /Construction Residential Areas, Residential
Financing, Towers, Residential Apartments
• Hikr/Long Lease. (sheltering the mass)
• Build-Lease-Transfer BLT
• Build-Operate-Transfer BOT, Hotels, Commercial Buildings,
• Joint Venture, Towers
• Sukuk al- Office, Service Apartment
Musharakah/Partnership Bonds (opening jobs for the mass)
• Musharakah Hospitals, Clinics, Schools,
Mutanaqisah/Diminishing Colleges,
Partnership (providing jobs and health care for
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 RECENT CREATION OF
CASH WAQF

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 WAQF SHARES SCHEME

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 WAQF-SHARES
Waqf-shares is used as raising fund for financing
MALAYSIA KUWAIT ISLAMIC RELIEF
/UK
• Building mosques • Needy Waqf • Education Waqf
• Building Islamic Scheme Scheme
school • Mosque Waqf • Water and
• Medical facilities, Scheme Sanitation Waqf
• Commercial • Orphans Waqf Scheme
development Scheme • Orphans Waqf
• Purchasing • Empowerment Scheme
vehicles used for Waqf Scheme, • Qurbani Waqf
da’wah. • Water Waqf Scheme
Scheme • Healthcare Waqf
• Health Waqf scheme
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• Education Waqf Relief Waqf
 DIRECT CASH-WAQF

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 DIRECT CASH WAQF MODEL
Direct cash waqf used to finance different needs
such as:
SINGAPORE INDIA
• Burials of poor • Handicapped
Muslims; • Deserving Muslim students
• Orphans; • Distributing food during the month of
• Islamic schools, Ramadhan (for iftar);
• Charity projects. • Distributing books and stationeries to
poor school children;
• Financing the cost of marriages and
giving dowry
• financing the medical expenses of
poor Muslims;
• Orphanages and Islamic schools

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 DEPOSIT PRODUCT MODEL

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 DEPOSIT CASH WAQF
In Bangladesh deposit cash waqf model is practiced in Social
Investment Bank Limited (SIBL) & Islamic Bank Bangladesh
Limited (IBBL)for various socio economic activities such as:
• Improving the conditions of the hard-core poor,
• Rehabilitation of beggar;
• Rehabilitation of destitute women
• Education of orphans
• informal education facilities for children;
• Conducting da’wah activities
• Village healthcare and sanitation
• Supplying pure drinking water

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 CHALLENGES FACING THE
CURRENT DEVELOPMENT
• Only 2% of the total old waqf properties have
been developed leaving 98% still lacking funds.
• Little amount of funds have been collected from
all these waqf schemes (using traditional method).
• Lack of transparency of how the money has being
channelled to the specified beneficiaries
(discourage new contributors)
• No motivation factor for donors to contributor

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 FINTECH
&
THE FUTURE OPPORTUNITIES
FOR THE DEVELOPMENT OF
WAQF

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 WHAT IS FINTECH
Fintech is a financial technology that describes an emerging
financial services sector in the 21st century. It is defined as:

“An economic industry composed of companies or

representatives of companies that use technology to
make financial services more efficient, faster,
transparent and cheaper.”

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 FINTECH PRODUCTS IN THE
INDUSTRY

BLOCKCHAIN AND
CROWDFUNDING
CRYPTOCURRENCY
Allows people with big ideas to get
Blockchain offer virtual currencies
funding quickly and easily from anywhere
(cryptocurrency) as an alternative to typical
in the world and from people they have
fiat money. Within this platform it is
never met before. Projects provided are:
possible to save, use, and exchange
, • Donation based
cryptocurrencies while all transactions are
crowdfunding
registered and stored on a variety of
• Rewards crowdfunding
servers.
• Equity crowdfunding - Bitcoin
• P2P Lending - Ethereum
crowdfunding - Ripple

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 • How fintech can help the
development of waqf?
• How Muslim can benefit
from the crowdfunding
and blockchain to
develop the waqf?
• What are the benefit to all
societies in general?
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 WHAT IS ISLAMIC CROWDFUNDING?

• Crowdfunding is the practice of funding a project or scheme by

raising money from a large number of people who each contribute a
relatively small amount via the Internet.

• Islamic crowdfunding is a combination of the current financial

technology of crowdfunding together with the Islamic contracts
(murabahah, musharakah, muradhrabah)

• A good example of Islamic crowdfuding was implemented by Ethis

crowd .

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 CROWDFUNDING
&
THE DEVELOPMENT OF WAQF
• Donation-Based Crowdfunding
• Equity Crowdfunding
• P2P Lending-Based Crowdfunding

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 1. DONATION BASED CROWDFUNDING
CASH WAQF TO REDEVELOP THE OLD WAQF PROPERTIES
(DIRECT SCHEME)

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 2. DONATION BASED CROWDFUNDING
CASH WAQF TO PROVIDE SERVICES TO THOSE IN NEEDS
(INDIRECT SCHEME)

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 3. EQUITY CROWDFUNDING TO
DEVELOP THE OLD WAQF
PROPERTIES
Call investor to redevelop the waqf through equity
crowdfunding through
• Construction Financing, (Stisna‘)
• Long Lease (Hikr).
• Build-Lease-Transfer BLT
• Build-Operate-Transfer BOT,
• Joint Venture,
• Partnership Bonds (Sukuk al- Musharakah)
• Diminishing Partnership (Musharakah Mutanaqisah)
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 3. EQUITY CROWDFUNDING

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 4. P2P CROWDFUNDING PLATFORM

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 BLOCKCHAIN,
CRYPTOCURRENCY
&
THE DEVELOPMENT OF
WAQF

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 BLOCKCHAIN & CRYPTOCURRENCY
• Blockchain is a decentralize Ledger of all transactions
across a peer-to-peer network. Using this technology,
participants can confirm transactions without the need
for a central certifying authority. Potential applications
include fund transfers, setting trades and many other
uses.
• Cryptocurrency is a medium to exchange, created and
stored electronically in the blochcahin, using encryption
techniques to control the creation of monetary units and
to verify the transfer of funds. Bitcoin is the best known
example
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 How Blockchain can
help
the development of
waqf?

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 BLOCKCHAIN & THE CREATION OF
WAQF COIN
• Easier to choose the waqf scheme a donor would like to
contribute
• Fast sending waqf contribution to the specified
beneficiaries
• Accurate and transparent tracking any contribution send to
any scheme
• Easier tracing of the social impact of that contribution on
community and the society at large
• Encourage the good doing and translate the act of infaq
into reality through regular contribution.

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 BLOCKCHAIN & THE CREATION OF
WAQF COIN

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 THE END

Q &A

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 Thank You

Assoc. Prof. Dr. Magda Ismail A. Mohsin

Islamic Economics & Finance

Tel: 03-76514029
Email: [email protected]

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