Principles of Waqf

What is Waqf?

In Arabic language the word "Waqf" or "Habs" means to stop or hold. Technically, waqf refers to making a property invulnerable to any disposition that leads to transfer of ownership and donating the benefit of that property to beneficiaries. In this regard, waqf can be described as the confinement of a property (movable or immovable) by a donor(s) and the dedication of its use and benefits in perpetuity for the well-being of society over generations.

As a continuous charitable contribution given away for goodwill, waqf is a binding commitment and once created, must stay permanent. This inherent perpetuity gives waqf the flexibility to accommodate the changing needs of society over time.

Why Waqf?

Waqf has been, throughout centuries, one of the cornerstones of the Islamic economic system. It provided education, health services, water, travelers' lodges, clinics and hospitals, environmental protection, mosques, schools, universities, and other public utilities.

Prophet Muhammad p.b.u.h. had in one of the famous hadith narrated by Abu Hurairah r.a. (Riwayat Imam Muslim), "When the son of Adam dies, his actions come to an end except for three; sadaqah jariyah (ongoing charity - waqf), knowledge which brought benefit and a pious child who makes supplication for him."

From the perspective of Islamic society, Waqf is seen as an essential pillar of the religious, social, cultural, scientific, economic and political life of society, which will eventually lead to sustainable development. Waqf is seen as a long-term investment into the overall community with continued benefits. Finally, with successful implementation of waqf, both society empowerment and poverty alleviation will be achieved.

Pillars of Waqf

The Shariah places the following four (4) pillars for purposes of establishing a waqf:

  1. The waqif (a party who waqf the asset)

    Refers to the donor of the waqf asset, i.e. the Unit Holder(s) of the Fund.

    • The waqif can be a natural or legal person. If the waqif is a legal person, the waqf decision should be made by the members and/or shareholders and not the board of directors.
    • The waqif must be legally entitled to dispose of his property.
    • The decision of a person whose legal competence is restricted because of irrationality is invalid.
    • The validity of waqf decision of a person whose legal competence is restricted because of indebtedness shall be subject to the confirmation by his creditors. When the creditors refuse or decline the waqf of the indebted person, the waqf becomes invalid.

  2. Mauquf (waqf asset)

    Refers to the waqf asset, i.e. the portion of annual income distribution of the Fund transferred by the Unit Holder(s) in the form of cash which is meant for waqf purposes.

    • The waqf asset should fulfil the following conditions:
      • it shall be a Shariah-accepted asset;
      • it shall be known; and
      • the waqif shall be the sole owner of the asset in which nobody else should have a right of disposition at the time of establishing the waqf;
    • Waqf asset can also be in the form of money. The income generated from utilisation of the money will be distributed to identified beneficiaries, while retaining the principal amount.

  3. Mauquf a'laih (beneficiaries)

    Refers to the recipient of the waqf asset. For the purpose of this Fund, it refers to YWM as the recipient of the waqf contribution.
    • The waqf should not be made for any impermissible purpose.
    • It is permissible to make waqf for the benefit of non-muslims, provided that the cause to be served does not involve activities which are contrary to Shariah. It is also permissible to make waqf for the benefit of the rich.

  4. Sighah (the form of the waqf)
    • Formation of waqf can take place verbally, in writing, or in any form of disposition which is normally considered as indicating it.
    • Waqf can be declared as effective starting from a future date, such as when the donor declares his property to become waqf starting from next year.

Collaboration with Yayasan Waqaf Malaysia for Kenanga Waqf Al-Ihsan Fund

YWM is a national waqf entity. It was officially established on 23 July 2008 under the Trustees [Incorporation] Act 1952 through Legal Affairs Division of the Prime Minister's Department. Its establishment was initiated by the Department of Waqf, Zakat and Hajj of the Prime Minister's Department ("JAWHAR").

YWM fulfill the following criteria as waqf administrator and recipient:

  • the waqf institution shall be authorised by the Federal or State Islamic religious council to act as a mutawalli (waqf administrator) or collection agent for waqf purposes;
  • the waqf institution shall have a proper governance structure and framework;
  • the waqf institution shall have an audited annual financial statement; and
  • the waqf institution shall have a published annual report on its waqf distribution and/or utilisation.

KIB appointed YWM as the recipient and administrator of the waqf contribution, based on the fulfilment of the above criteria and considering YWM was established as a result of the efforts undertaken by 13 State Islamic Religious Councils (SIRC) and Department of Waqf, Zakat and Hajj of the JAWHAR as Malaysia's national waqf entity. Currently, YWM is appointed mutawalli (manager or custodian of waqf) by eight (8) SIRCs in Malaysia.

In selecting YWM as the waqf recipient, KIB also considered its main function of helping SIRC to develop existing waqf properties, create new waqfs, and develop the ummah economy through waqf instruments. Besides, YWM is the primary reference centre on waqf for domestic/foreign institutions, and is the liaison institution for foreign waqf and institutions who want to implement waqf in Malaysia.

The Chairman of the Board of Trustees of YWM is the Minister in the Prime Minister's Department (Religious Affairs) and the Vice-Chairman is the Director-General of JAWHAR. The other members of the Board of Trustees consist of representatives of 13 State Islamic Religious Councils, one (1) representative from the Ministry of Finance, one (1) representative from the Ministry of Economic Affairs, and representatives from the corporate sector.

YWM is responsible for assisting, supporting and providing advisory services to SIRC on matters related to the development and reengineering of waqf assets and properties through traditional and contemporary Shariah-compliant structures and instruments.

The YWM shall distribute the Waqf Asset to any identified projects in the following sectors:

  • Education;
    • - Providing new or improving existing-education related facilities; and
    • - Providing new or improving existing-education related equipment.
  • Healthcare;
    • - Providing new or improving existing healthcare-related facilities; and
    • - Providing new or improving existing healthcare-related equipment.
  • Economic empowerment;
    • - Establishing business platforms for micro-enterprises;
    • - Providing new or improving existing economic empowerment related facilities; and
    • - Providing new or improving existing economic empowerment related equipment.
  • Environment;
    Establishing or improving existing environmental related project such as in:
    • - Renewable energy;
    • - Solid waste management;
    • - Waste water management;
    • - Reforestation;
    • - Clean water; and
    • - Affordable and clean energy.
  • Any other project in any other sector which may be determined by the Joint Committee from time to time.

Investors may obtain information relating to YWM and the progress of the waqf initiatives from

Kenanga Investors Berhad 199501024358 (353563-P). All rights reserved.
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