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Evolution In Waqf Jurisprudence And Islamic Financial Innovation

Author

Listed:
  • Mohammad Abdullah

    (FAB, Siraj (Islamic Window of First Abu Dhabi Bank))

Abstract

This paper aims to analyse the evolutionary process in the jurisprudential structure of modern waqf (Islamic endowment) and underlines the scope of Islamic financial innovation through the mechanism of waqf. The paper proposes the innovative models of parallel waqf, waqf-based social and financial instruments, waqf-based ?uk?k, micro-tak?ful, and waqf-based commodity bank. The research adopts the qualitative approach and employs socio-legal research methodology for the analysis. The paper relies on desk-based research. Compared to the classical structure of waqf which was confined within the domain of a perpetual charitable institution, this paper finds that modern waqf has ushered in several new dimensions into its fold. Modern waqf is in the process of re-evolution. Waqf, in the current scenario, has evolved into a financial product, a property-conveyance tool, an instrument of contract, an investment tool, a risk mitigation mechanism and an incorporated entity. The scope of this paper is limited to analysing the jurisprudential evolution of waqf and its impact on the Islamic finance industry. It does not seek to discuss the overall role or impact of waqf on the society as a whole. This paper also does not endeavor to compare and contrast the mechanism and modalities of other philanthropic institutions vis-?-vis waqf. This paper examines the jurisprudential underpinnings of waqf and their implications and applicability to the Islamic finance industry. The paper draws on the process of how the mechanism of waqf has already been employed to develop various innovative Islamic financial products and how this process can be a catalyst for further innovation in the Islamic finance industry. The main contribution of the paper is encapsulated in the analysis of how the jurisprudential structure of the modern waqf has been evolving in the last few decades to accommodate the modern needs of Islamic finance. It further enumerates a few innovative Islamic financial products which can be developed by exploiting the available flexibility in the evolved version of modern waqf.

Suggested Citation

  • Mohammad Abdullah, 2018. "Evolution In Waqf Jurisprudence And Islamic Financial Innovation," Journal of Islamic Monetary Economics and Finance, Bank Indonesia, vol. 4(1), pages 161-182, August.
    • Handle: RePEc:idn:jimfjn:v:4:y:2018:i:1i:p:161-182
    DOI: https://doi.org/10.21098/jimf.v4i1.920
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    References listed on IDEAS

    as
    1. Shah Shirazi, Nasim, 2014. "Integrating Zakāt and Waqf into the Poverty Reduction Strategy of the IDB Member Countries," Islamic Economic Studies, The Islamic Research and Training Institute (IRTI), vol. 22, pages 79-108.
    2. Mohammad Abdullah, 2015. "Analysing the moral aspect of qard: a shariah perspective," International Journal of Islamic and Middle Eastern Finance and Management, Emerald Group Publishing Limited, vol. 8(2), pages 171-184, June.
    3. Mohamed Aslam Haneef & Ataul Huq Pramanik & Mustafa Omar Mohammed & Md. Fouad Bin Amin & Aliyu Dahiru Muhammad, 2015. "Integration of waqf-Islamic microfinance model for poverty reduction," International Journal of Islamic and Middle Eastern Finance and Management, Emerald Group Publishing Limited, vol. 8(2), pages 246-270, June.
    4. Mohammad Abdullah, 2015. "Analysing the moral aspect of qard: a shariah perspective," International Journal of Islamic and Middle Eastern Finance and Management, Emerald Group Publishing Limited, vol. 8(2), pages 171-184, June.
    5. Mohamed Aslam Haneef & Ataul Huq Pramanik & Mustafa Omar Mohammed & Md. Fouad Bin Amin & Aliyu Dahiru Muhammad, 2015. "Integration of waqf-Islamic microfinance model for poverty reduction," International Journal of Islamic and Middle Eastern Finance and Management, Emerald Group Publishing Limited, vol. 8(2), pages 246-270, June.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Waqf; Charity; Charitable Trust; Endowment; Innovation; Islamic Finance; Social Finance;
    All these keywords.

    JEL classification:

    • O20 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - General
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • P13 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Cooperative Enterprises

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