Waqf-Linked Sukuk to Enhance Development

Summary

Despite the long existence of Waqf in Indonesia, little is known about its potential. Roughly translated into religious, pious and charitable donation, Waqf’s is dedicated to make better the livelihood of other people. In other words, Waqf is not always only about charity but also to generate profit that would ultimately benefit the social welfare. One way to achieve such goal is through the utilisation of Waqf assets for sukuk issuance (or Waqf-linked Sukuk). Without an existing fatwa, Indonesia lacks a clear legal framework regarding this matter. This is clearly an unfortunate gap as with a proper guideline, the management of Waqf-linked sukuk will undoubtedly open the possibility for numerous growth in Indonesia. However, the Islamic Finance community remains hopeful that a regulation will be issued soon seeing the benefits brought by Waqf assets.

Published in: 2020
Author: Mirza A. Karim
Topic: Islamic Finance