REVIVING WAQF THROUGH ISLAMIC FINANCE: A SUSTAINABLE MODEL FOR SOCIOECONOMIC DEVELOPMENT"

Abstract

Waqf, a traditional Islamic endowment institution, has historically played a pivotal role in the socioeconomic development of Muslim societies, funding education, healthcare, infrastructure, and poverty alleviation. However, in contemporary times, its impact has diminished due to mismanagement, legal complexities, and lack of innovation. This study explores the potential of reviving Waqf through the integration of Islamic finance instruments to establish a sustainable model for inclusive development. By leveraging Shariah-compliant financial tools such as Sukuk (Islamic bonds), Mudarabah (profit-sharing), and Wakalah (agency), dormant Waqf assets can be revitalized and strategically deployed to address modern economic and social challenges.

The paper examines successful global case studies and proposes a framework that aligns Waqf governance with modern financial regulations and transparency standards. The integration of Islamic finance not only ensures ethical and risk-sharing mechanisms but also attracts institutional and private investments to support scalable Waqf projects. Additionally, digital transformation and fintech can play a key role in enhancing the efficiency, accountability, and outreach of Waqf-based initiatives.

The study argues that a revitalized Waqf system, underpinned by robust Islamic financial practices, can significantly contribute to poverty reduction, education, healthcare accessibility, and social justice in both Muslim-majority and minority regions. Furthermore, this sustainable model supports the UN Sustainable Development Goals (SDGs), particularly those related to economic growth, reduced inequalities, and responsible institutions. By harmonizing tradition with innovation, the paper presents Waqf as a dynamic instrument capable of driving sustainable and inclusive socioeconomic progress in the 21st century.