Utilization of Waqf Property and Governance Practice of Institutional Mutawalli: An Experience of Higher Education Institution

Utilization of Waqf Property and Governance Practice of Institutional Mutawalli: An Experience of Higher Education Institution

Zairy Zainol (Universiti Utara Malaysia, Malaysia), Hasyeilla Abd Mutalib (Universiti Teknologi Mara, Malaysia), Selamah Maamor (Universiti Utara Malaysia, Malaysia), Suraiya Hashim (Universiti Utara Malaysia, Malaysia), Norazlina Abd Wahab (Universiti Utara Malaysia, Malaysia) and Mohd Saharudin Shakrani (Universiti Utara Malaysia, Malaysia)
DOI: 10.4018/978-1-7998-6811-8.ch013
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Abstract

Institutional mutawalli is the institution responsible for maintaining and managing the waqf property. The success of the administration and management of the institution mutawalli is the key to professional and sound governance, which has certainly led to the sustainability and continuity of the institution. Good and proper governance promotes the optimal use and benefit of each entrusted waqf property to others. Previous studies have found that most institutional mutawalli face challenges in their governance practices, which is why these waqf properties are not used to archive their full impact on other beneficiaries. The aim of this study is therefore to understand the current utilization of waqf property in Malaysia and to explore governance practices based on the experience of higher education institutions as an institutional mutawalli (IM). A qualitative method is employed in this study using case studies with purposive sampling, where formal and semi-structured interviews were conducted with the selective representative of the IM. The participants are those in leadership positions, such as the CEO and the top management of the institution mutawalli from the higher education institution. The findings of this study discussed in detail the practice and experience of waqf institutions utilization and governance of their waqf properties. This study identifies the key characteristics of the waqf property that must be possessed by the utilization and management of the waqf property. The findings could also benefit similar and different institutional mutawallis and policy makers from identifying the essential interdependent characteristics to help them achieve growth performance.
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Introduction

Islamic social finance plays a vital role in economic development through reducing poverty and addressing challenging socio-economic problems such as education, unemployment, malnutrition and health issues. Islamic social finance instruments are in the form of zakat, sadaqah and waqf. In this era, there are various forms of Islamic social finance like Islamic microfinance, sukuk and takaful. Additionally, waqf becomes a prominent subject recently besides Islamic banking and finance, takaful, sukuk and crowdfunding.

The development and implementation of waqf property have evolved since the era of Prophet Muhammad until today. Waqf property has become the backbone of Muslim economic development until today (Sohaimi & Syarqawi Muhammmad, 2008). The impact can be seen as focused on the establishment of multiple waqf educational institutions, such as Andalus University in Cordova, Al-Azhar Al-Syarif in Egypt, Madrasah Nizamiyyah Baghdad, and several more institutions. University Al-Azhar is one of the examples of waqf property which was established more than 1000 years ago and has contributed to the educational services of thousands of Muslim students throughout the world (Abdul Ghafar & Noraziah, 2009).

According to Shariah, waqf means to stop the property or to make the property for the usage and interest to the ummah and religion (Razali, 2013). The practice of waqf is done voluntarily based on the intention of the waqf donor (waqif). The unique characteristic of waqf is that the reward to the waqif is long-lasting even after his demise. Due to this advantage, waqf property in Malaysia is expanding to make it be more developed and optimised. Most waqf property is overseen and governed entirely by the State Islamic Religious Councils (SIRCs) for every administration and development activities in Malaysia. This is because the SIRCs are the sole trustee at the state level and have the responsibilities in managing the whole of waqf property, either immovable or movable property, including its activities. This indicates that every SIRCs have their own state’s enactment, regulation, and procedure to manage all the waqf institutions and this results in different practices in all the states in Malaysia (Mohd Afendi & Asmah, 2010).

There are numerous studies on waqf and those studies not only focusing on the management problems but also on the utilisation of waqf property and the enhancement of the governance of the waqf institution itself. (Mahadi & Syed Khalid, 2016; Saripah, Nik Muniyati, & Zaiton, 2018). The main problems in the issues of waqf property utilisation is related to underutilise, unproductive and idle waqf properties (Anwar Allah Pitchay & Mohamad I’sa, 2016; Chowdhury, Chowdhury, Mohd Zulkifli, & Modh. Rushdan, 2012; Hidayatul, Shahul Hameed, Ihsan, & Ibrahim, 2011; Sanep & Nur Diyana, 2011). Unutilised waqf property is due to several supported factors such as changes on the title of the waqf land, financially underperform waqf building, non-strategic location of waqf land and difficult to get access and undeveloped waqf land due to its small size (Abd Shakor, 2011; Abdul Ghafar & Noraziah, 2009; Abul Hasan, 2014; Abul Hassan & Mohammad Andus, 2010).

Another related issue in the utilisation of waqf property is poor governance practices in the management of waqf property by institutional mutawallis. This issue leads to the difficulties of institutional mutawallis to enhance their management strategies in utilising the waqf property. It also related to variations in types of waqf institutions that create difficulties in enforcing rules governance and regulation with the different types of waqf institutions. Among other factors that contribute to the poor governance practice by the institutional mutawallis are no standardisation in terms of management and governance practices, lack of professional and expertise, lack of human capital or human resources in waqf department to manage the waqf property, non-standardisation of the legal framework and unqualified and unprofessional in certain areas (Abdul Halim, 2007, Rabitah Harun et al., 2012, Zuraidah Mohamed Isa et al., 2011, Mohd Bakri, 2014 and Syed Aisam, 2013).

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