Understanding the Potential Benefits of Cash Waqf

Cash waqf has a tremendous potential to help solve economic problems in Indonesia. Its implementation is predicted to bring immense benefits.

cash waqf benefits
Illustration. Waqf has been used to build various facilities for the benefit of the community. (ACTNews/Reza Mardhani)

ACTNews, JAKARTA – The COVID-19 pandemic that has been going on for almost two years have brought a dire impact on the health system and the economy. Since economic activities were halted to prevent the spread of the virus, the number of the poor and unemployed has been increasing.

Islam has provided solutions in dealing with the economic crisis, one of which is the utilization of waqf. Contemporary Islamic scholars have made cash waqf as a product of ijtihad whose benefits will reach the community at large.

Cash waqf is waqf performed by an individual, group, institution or legal entity in the form of cash or securities such as shares and checks. The waqf assets will be managed by Nazir (administrator) in a productive form whose proceeds will be used for the benefit of the community. The potential for cash waqf in Indonesia is said to reach IDR 180 trillion per year.

With this great potential, many are optimistic about the development of waqf. Governor of Bank Indonesia (BI) Perry Warjiyo said waqf can be an alternative instrument to help the national economic recovery. According to Perry, the potential for waqf in Indonesia is huge because of the large Muslim population in the country.

One form of productive cash waqf implementation is the agriculture-based program. (ACTNews/Reza Mardhani)

"This instrument (waqf) can be an alternative to support economic activity as well as financial market deepening to help accelerate economic recovery," he said at the International Forum on Contemporary Fiqh Issues on Islamic Economies and Finance in mid-October 2020.

Historically, waqf has held an important role in supporting public facilities. Deputy Chairman of the Implementing Body of the Indonesian Waqf Board Imam Saptono invited the public to look back at the golden age of waqf when it became a lifestyle for Muslims. Various public facilities were funded by waqf for the benefit of the community.

"Once the waqf industry has developed and the waqf investment has become so widespread, our descendants will benefit from the fruits of waqf contribution. They might be born at waqf hospitals, study at waqf-funded schools, work in waqf-funded businesses, pray at waqf mosques, and get buried in waqf cemetery when they pass away, "explained Imam during the Live Virtual Waqf Training held by Global Wakaf Academy – Aksi Cepat Tanggap on Tuesday (4/27/2021).

Imam explained that during the reign of Umar Abdul Aziz in 818-821 AD, no else received zakat. One of the reasons was because the state lent capital without interest to merchants in need. Umar even asked his wife, Fatimah, to donate her jewelry to the state treasury (Baitul Mal).

"Every time we perform umrah and visit Arafah, we can see a water channel named after Lady Fatimah, the wife of Umar bin Abdul Aziz who had donated her jewelry for its construction,” said Imam.

According to Imam, the benefits of waqf can be enjoyed by the whole community, not only Muslims. “Waqf is one of the instruments that shows Islam as a mercy to mankind. Waqf not only benefits Muslims and non-Muslims, but it can also be used for nature conservation, financing the preservation of animals, and so on,” said Imam.[]