Waqf is a financial or non-financial charitable institution established by someone by withholding an immovable and movable property, with a view to perpetually use it (i.e., the property itself) or to spend revenue derived from the asset (e.g., money and the activities in which it is invested) on either well-defined causes or general social and charitable causes. The welfare of the beneficiaries is the common intention, whether the cause is specified or not. Once a property (or another asset) is locked into a waqf, its ownership changes from the benefactor to God. This means a waqf is essentially a permanent trust that cannot be dissolved, although the designated beneficiaries may benefit from its revenue generating activities.
A wqaf have been used by Muslim philanthropists in the past and at present, in pursuit of religious satisfaction. Although it is a common assertion in the Islamic literature that waqf is a unique Islamic financial institution, there are parallels in other traditions as well. For examples, endowments and trusts in the Western world are similar to the institution of waqf. Admittedly, such developments in the West took place much later than the use of waqf in Islamic countries, and it is possible that trusts and endowments were an Islamic influence in the Western world.
Their role in job creation and sustainable employment has been highlighted by many researchers on the topic. According to some estimates, three-quarters of all the arable land during the time of the Ottomans belonged to a wqaf. Furthermore, there were 8.23% people employed in the waqf sector in 1931. The comparable figure for the public sector employment was 12.68%.
Deposits, however, is only one of the many products based on the cash waqf. Other products include:
- Waqf shares scheme;
- Direct cash waqf scheme
- Semi-compulsory waqf scheme;
- Corporate waqf scheme; and
- Cooperative waqf scheme
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