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Papers from the International Islamic Finance Conference, Abu Dhabi, April 15-16, 2013, and the International Islamic Accounting and Finance Conference (IIAFC 2012), Malaysia, November 20-21, 2012
Introduction
Historically speaking the institution of waqf has played a significant role throughout Islamic history, from the time of the prophet (pbuh) to the beginning of the nineteenth century. Although the creation of waqf existed before Islam, yet, Islam accepted it and developed it into an institution with its legal framework. Hence, it became one of the devices developed by the Muslims to fulfil many crucial needs in various sectors that are today financed by the state/the government. Examples of such needs are; education, health care, national security, commercial and business activities, transportation facilities, shelter and food for the poor and needy, creating jobs for many people, besides supporting the agricultural and industrial sectors without inflicting any cost on the government. The beauty of this institution is that, it is one of the redistribution institutions ([6] Cizakca, 2011) and its objective is not for the sake of profit but to support the general goods and the welfare of the whole society while seeking compound rewards in the hereafter. This paper is divided into four sections, the first section highlights the legal framework for cash waqf from Shari'ah perspective, section two presents its modern applications in Muslim and Muslim minority countries and the different goods and services it provides, section three proposes a framework for cash waqf financial institution (CWFI) as an applicable scheme to provide the needs for every society without depending on government expenditure, this is followed by the conclusion.
1 Shari'ah aspect of cash waqf
Although, the term "waqf" does not appear in the Qur'an , Muslim jurists deduced its legitimacy and its law from the Qur'an and the Sunnah. In this part the legal framework for cash waqf is presented from the different schools of law.
1.1 Legitimacy of cash waqf
There is a consensus among the majority of Muslim jurists regarding the legitimacy of cash waqf. From the Hanafi school, a disciple of Abu Hanifah, Imam Zufar approved all movable properties to be dedicated as waqf including the waqf of dirham and dinnar, namely waqf al-nuqud /cash waqf. Along the same lines, Imam Zufar...