Journal of Islamic Economics, Management, and Business

Vol.2. No.2. (2020), 39-54, DOI: 10.21580/jiemb.2020.2.2.8083

Magister of Sharia Economy, Faculty of Islamic Economics and Business
Universitas Islam Negeri Walisongo (p-ISSN: 2721-0197; e-ISSN: 2721-0324)
Published online in http://journal.walisongo.ac.id/index.php/JIEMB

The ideal model of waqf financing

Ahmad Furqon
Faculty of Islamic Economics and Business, UIN Walisongo Semarang, Indonesia
JIEMB | 39
Abstract
Purpose – The aim of this research is to find out the financing mechanism or the
waqf assets funding done by nazhir and to find the ideal mechanism for the
development of waqf assets.
Method – This is a qualitative research with a case study approach. The research
object was selected using purposive sampling, namely nazhir waqf in Central Java
which manages productive waqf including: Sultan Agung Waqf Foundation
(YBWSA), Semarang Grand Mosque Management Agency (BPMAS), and
Pekalongan City Muslimin Foundation (YMKP).
Result – This study found that the Sultan Agung Waqf Foundation (YBWSA)
implements a mechanism for waqf financing in the form of public funding,
government assistance, murabahah, and ijarah. BPMAS implements a waqf
financing mechanism in the form of donations & alms, government assistance,
ijarah, and cash waqf. Meanwhile, YMKP provides financing for the development
of its waqf assets in the form of government assistance and qardul hasan.
Implication – This study can be used by government, policy maker, business
party, or scholar to create an optimal and ideal mechanism in developing waqf
assets.
Originality – In the past, studies of waqf asset management were performed in
the context of middle east, mostly Kuwait. This study provide waqf asset
management in context of South East region.

Keywords: waqf asset management, waqf management in Indonesia

 Ahmad Furqon

Introduction
Waqf is a typical Islamic generosity instrument providing
continuous values of virtue for the giver. The benefit of the waqf
management is to provide good value for others in need. The result
JIEMB | 40 of waqf can be used for community welfare for social, educational,
and economic purposes. The result of waqf can be distributed to the
poor, houses of worship, schools, cemeteries, orphanages, the
elderly, and so on. Because of its various potential benefits, waqf is
a source of strength for Muslims that must be developed properly
so that it can bring prosperity.
Nazhir's efforts in developing waqf assets are constrained by
several things, including the absence of funds for the development
of these waqf assets. The provisions of Islamic Law which prohibit
the use of waqf assets to be pawned, used as collateral, and sold,
reduce the potential of waqf assets to be used as financing or
financing capital. In fact, as this provision is considered to be
narrowing the space for nazhirs’ movement, it serves the purpose of
securing waqf assets in order to maintain their integrity.
According to Masggykuri Abdillah (member of the Institutional
Division of the Indonesian Waqf Board), there are three major
problems in the development of waqf in Indonesia: first, the
perception of waqf is limited to places of worship or tombs, and has
not been developed productively so that it has no economic value.
Second, the managerial ability of waqf/nazhir managers is still
limited. Third, the limited investment funds for productive waqf
(Potensi Waqf Indonesia, 2015).
According to Hasanah (2011), when waqif is giving waqf assets
to nazhir for management, he does not give additional money to
manage them, so nazhir has to think about the cost of maintaining
and developing those assets. If nazhir is not creative or does not
have sufficient knowledge about the funding or financing to develop
the waqf assets, it will result to neglected waqf assets or become
undeveloped. This research can serve as a guide for nazhirs in
determining the financing or funding mechanism to develop and
manage waqf assets.
This research was conducted to find out the ideal financing
mechanism according to nazhir productive waqf which does not
depend on government assistance but focuses more on the private
sector or others. The formulation of the problem in this research is:

Journal of Islamic Economics, Management, and Business-Vol 2. No.2 (2020)

 The ideal model of waqf financing

1. What is the financing mechanism that has been carried out

by the waqf nazhirs in Central Java?
2. What is the ideal financing mechanism for the development
of waqf assets in Central Java?
JIEMB | 41
Literature review

Studies on the mechanisms for financing waqf assets have

been the concern of scholars for a long time. Previously, scholars
have discussed financing mechanisms related to efforts to protect
waqf assets from damage or extinction (Kahf, 2006).
Al-Kabisi in his book entitled Al-Ahkām al-Waqf fi asy-Syarīah
al-Islamiyah mentions two financing models carried out by previous
well known scholars: Ibdāl/istibdāl and al-Ijārah (Al-Kabisi, 2004:
349). In addition, Kahf (2006) discusses the financing of waqf
property in his book entitled al-Waqf al-Islāmy, tathawwuruh,
idāratuh, tanmiyyatuh. Kahf classified the waqf financing
mechanism, which he called shiyagh tamwīl al-awqāf, into two,
namely the traditional financing mechanism and the modern
financing mechanism. The traditional financing mechanism
according to Kahf is adding the old waqf with the new waqf (at-
Tamwīl bi Idhāfati Waqf Jadīd ilā al-Waqf al-Qadīm), borrowing waqf
assets (al-Iqtirādh lil waqf), exchanging waqf assets (Istibdāl al-
Waqf), monopolying waqf property (al-H) ukr fi al-Waqf), and leasing
waqf property (al-Ijāratāni fi al-Waqf). As for modern financing
mechanisms, Kahf divides it into two; first, coming from the internal
financing mechanism by empowering waqf assets, the financing
model can be in the form of al-Murābah} ah, al-Ijārah and al-Istis}
nā' and second, the external financing model by relying on public or
government assistance (Kahf, 2006).
There are several studies discussing the mechanisms for
financing waqf assets such as the dissertation research conducted
by Bin Azuz (2003) at al-Jazair University with the title Fiqh Istis|mār
al-Waqf wa Tamwīluh fi al-Islām (Dirāsat Tat) biqiyah 'an al-Waqf al-
Jazāir). Before discussing the mechanism of financing waqf, the
researcher explains the provisions of Islamic financing and its
peculiarities. The financing mechanisms mentioned in this study are
al-Musyārakah, al-Musāqāt, al-Mughārasah, al-Muzāra'ah, al-Ba'i,
as-Salam, al-Mud} ārabah, al-Murābah} ah, al-Istishnā` or al-
Muqāwalah, al-Ji'alah, Stock Company, voluntary financing such as
financing from alms, bank loans, and solidarity posts. The object of

Journal of Islamic Economics, Management, and Business-Vol 2. No.2 (2020)

 Ahmad Furqon

this research is the financing and investment of waqf assets in

Algeria.
Another study done on the matter was conducted by Al-Hājary
(2006) with the title Taqyīm Kafāat Istismār Amwāl al-Awqāf bi
Daulah al-Kuwait. This study describes the measurement of the
JIEMB | 42
investment capacity of waqf assets in Kuwait. The research begins
by discussing the meaning of investment, types of investment,
investment tools applicable in the capital market and Islamic
investment tools. The core of the research is to explain the
mechanism for the financing of waqf assets and the development of
waqf investment in Kuwait.
Another research was conducted by Sabit, Iman, and Omar
(2005) at the Malaysia University of Technology Research Center
entitled an Ideal Financial Mechanism for Development of the Waqf
Properties in Malaysia. This study discusses the ideal financing
mechanism for land waqf development in Malaysia. Several
financing models are described by classifying them into four
classifications, namely: classic financing models, institutional
finance-based financing models, financing company-based
financing models and finance-based financing models itself. The
research concludes that the ideal financing mechanism applied in
Malaysia is through cash waqf.
In addition to research reports, there are several studies
discussing the mechanism for land waqf financing. Dawwabah
(2005) explains the definition of financing, the basic principle of
financing, stated that the basic law of all forms of financing is
permissible as long as there is no syara' argument against it. The
determination of the financing model is a matter of ijtihadiyah, which
allows changes and differences based on benefits and needs
according to the time and place. There are several principles that
must be understood in making financing, namely (1) the conditions
proposed by the waqif are the same as those of Allah SWT, which
must be followed; (2) current assets waqf is allowed; (3) exchange
of waqf assets can be done in a state of emergency; (4) waqf must
be managed by nazhir who is in charge of the financing of waqf
assets. The author proposes forms of financing, namely: family
sukuk, public interest sukuk, investment sukuk, and shanādīq al-
Istitsmār.
The last study was conducted by Mohammad Thahir Tsabit Haji
Mohammad (2009) entitled Alternative Development Financing

Journal of Islamic Economics, Management, and Business-Vol 2. No.2 (2020)

 The ideal model of waqf financing

Instruments for Waqf Properties. In this article, several models of

land waqf financing are mentioned, such as Join Ventura, Sukuk,
Mudhārabah Bonds, Ijārah, Money Waqf, Stock Waqf, and Exchange
of Land for Cash Waqf.
JIEMB | 43
Methodology

This research uses an inductive research strategy with

qualitative analysis methods. Questions that have been formulated
were answered by utilizing the theory of waqf financing.
The stages of the research are as follows:
1. Determining the research object, namely waqf nazhirs of
YBWSA, BPMAS, and YMKP.
2. Collecting field data. The data are collected using interview
techniques and documentations. Interviews were conducted
with nazhirs in the three institutions.
3. Analyzing the data. The analysis of the collected data was
carried out using the inductive-descriptive method. Inductive
analysis is done by summing up the facts so that the separate
facts can be organized into a coherent series. Descriptive
analysis is done by fully describing the results of the inductive
analysis above through written language that is easy to
understand.

Results and discussion

Endowment financing at the Sultan Agung Waqf Foundation
Sultan Agung Waqf Foundation (YBWSA) has several assets
derived from individual waqf and the proceeds from the purchase of
the foundation. The donated land handed over to YBWSA is
managed in the form of establishing elementary school (SD)
educational institutions, namely SD 1-3 on Jalan Suromenggalan 62,
SD 4 on Jalan Kaligawe, and for the development of SD 1-3 in
Kauman. Meanwhile, YBWSA's other assets, such as Sultan Agung
University, Sultan Agung Islamic Hospital, Student Food Center
(Pumanisa), do not come from individual waqf but through
purchases by the Foundation (Supadie, interview, 2015).
However, YBWSA assets originating from the purchase are
then considered as the foundation's waqf assets, according to Didiek
Ahmad Supadie as YBWSA Secretary (interview, 2015) YBWSA
considers them as waqf assets that must be safeguarded. The act of
Journal of Islamic Economics, Management, and Business-Vol 2. No.2 (2020)
 Ahmad Furqon

considering them as waqf assets will make YBWSA be more careful

in managing them, because it is a mandate that cannot be misused.
Treating YBWSA assets as waqf can provoke the grace of Allah
SWT. YBWSA general chairman Hasan Toha Putra said, as quoted
by Supadie (2015), that YBWSA's success was not due to the
JIEMB | 44
greatness of its management, but solely because of the grace of
Allah SWT.
There are several forms of waqf asset financing that have been
carried out by YBWSA in developing managed waqf assets. They
are as follows:
1. Public Funders
Public funding is funding assistance from the community in the
form of donations, alms, or benevolent loans. In developing the
donated land, YBWSA receives donations and alms from the
community, both in an active and passive ways. Active means being
active in raising funds from the community. This was done when the
Sultan Agung University was about to establish a hospital.
Meanwhile, the passive ones were donations and alms that came to
YBWSA. The fact is that the passive way begins with the donors'
knowledge of the programs that are being carried out by YBWSA
and their trust in YBWSA. At the beginning of its establishment in
1950, the Waqf Board received the first donations from
philanthropists which were distributed through K. Abdullah worth
f.172.93 (read: one hundred seventy-two rupiah, ninety-three cents).
Furthermore, YBWSA received donations and alms from the
congregation of recitation held by the Waqf Board. As stated in the
history, HM Sulchan once asked Ustadz Abu Bakar Assegaf’s
willingness to preach and invite recitation congregations to be
willing to provide financial assistance for the completion of school
buildings. This invitation was responded positively by the recitation
congregation, so that the plan to build a school building could be
carried out, with the establishment of a 2 (two) floor building in the
Suromenggalan Alley in 1954 (Supadie, 2015). The collection of
funds from the donations and alms for the congregation has been
continuing until now.
The construction of the Sultan Agung Islamic Hospital also
received a lot of attention and assistance from the community, not
only from the domestic country but also from abroad. Among other
things are 4 VIP rooms, each from Sumitomo Shoji Kaisha Ltd Tokyo,

Journal of Islamic Economics, Management, and Business-Vol 2. No.2 (2020)

 The ideal model of waqf financing

NV. HMS & Co, NV. Sapto Argo Puro and the Sukun Kudus Cigarette
Factory which was inaugurated on May 20, 1973.
During the construction of two wards for the care of the dhu'afa
(poor people), Sultan Agung Islamic Hospital also received a lot of
assistance, including:
JIEMB | 45
1. Assistance from Evangelische Zentral Stelle Fur
Entwicklungshilfe EV, Bonn, West Germany with the amount
of DM 680,000,-
2. Assistance from PT. Mega Jakarta
3. Assistance from the Djarum Kudus Cigarette Factory
4. Car assistance from CV. Toha Putra
5. Assistance from NV. Aktivum Jakarta, a Philips X -ray machine
6. Langsep cigarette factory (Sultan Agung Islamic Hospital,
2011).
7. Government Assistance
YBWSA finances the development of waqf assets through non-
binding government assistance, such as during the construction of
Sultan Agung University, the Waqf Board received government
assistance. For example, the funds received by YBWSA during the
construction of an Elementary School (SD) in Suromenggalan Alley,
with the amount of Rp. 50,000,- (fifty thousand rupiah) from Islamic
aid funds in Jakarta, through H. A, Ghaffar Ismail as Secretary
General of Islamic Aid Funds (Supadie, 2015).
During the construction of the Sultan Agung Hospital, the Waqf
Board also received government assistance, such as the assistance
from the Government of Indonesia (President Soeharto) in the form
of a Toyota Crown Ambulance, cash assistance amounting to Rp.
2,500,000 from the Central Java Provincial Government, an
ambulance car assistance from Jasa Raharja Insurance, along with
a set of tools for emergency measures, as well as ambulance
assistance from the Regional Office of the Ministry of Health, Central
Java Province including the medicines (40 Years Book Team of
Sultan Agung Islamic Hospital, 2011).
The large number of donors shows the people's trust in
YBWSA. In addition, it also shows the ability of YBWSA
administrators in establishing cooperation and shilaturrahim with
donors. Murabahah financing was mura taken by YBWSA in
developing waqf assets. The funds for murabahah were taken by
YBWSA to buy equipment for the Sultan Agung Islamic Hospital
(Supadie, interview, 2015). YBWSA makes it possible to take

Journal of Islamic Economics, Management, and Business-Vol 2. No.2 (2020)

 Ahmad Furqon

murabahah financing because the collateral used is not in the form

of waqf assets but instead it uses waqf assets obtained by buying.
2. Ijarah
YBWSA also received funds for the development of waqf
JIEMB | 46 assets by renting out the kiosks in the Pumanisa building. There are
two floors utilized for business ventures; the first floor is leased to
stalls selling student lecture needs, such as photocopy centers,
internet cafes, stationery stores, etc. Meanwhile, the second floor is
rented out for stalls selling snacks for students. In Pujasera (food
counters) there are 24 food vendors, 1 cafe, and 10 beverage outlets
renting lots to trade in Pumanisa (Pumanisa Unissula, 2015).

Endowment financing at the Semarang Grand Mosque Management

Agency
Waqf financing at the Semarang Grand Mosque Management
Agency (BPMAS) provides financing for the development of its waqf
assets using several forms of financing mechanisms, namely:
1. Infaq and alms
Funding through infaq and alms is carried out by BPMAS to
finance the operation of the Great Mosque of Semarang, renovation
of the mosque, to pay for the preacher and ustadzs who do the
recitation, as well as to finance the celebrations of Islamic holidays
held by BPMAS. In one month, the infaq obtained by BPMAS from
the mosque infaq box can reach 20 million and double the amount
during the fasting month. The donation was also used to buy land in
the former Bojong Hotel which is next to the mosque. For the
purchase of land from the former Hotel Bojong, 40% of the gas
station, 30% of the mosque's treasury, and 30% of the community's
donation were taken (Akhmad, interview, 2015).
2. Ijarah
BPMAS develops the donated land assets owned by renting
the land to investors or people who are interested in working on or
who wants to occupy the land. As one of BP's assets, the Great
Mosque of Semarang leased a building next to the mosque to BRI
bank for a rental fee of Rp. 150 million. Meanwhile, the land for lease
is the land of the Great Mosque of Semarang which is located in
Demak, precisely in Wonokerto Village, Karang Tengah District, with
a lease period of 2 (two) years, from 2012 to 2014. They collected
Rp. 41,750,000,- for the result of leasing the land. BPMAS also
leased the waqf land in Kendal, in Tanjung Sari Village, Weleri

Journal of Islamic Economics, Management, and Business-Vol 2. No.2 (2020)

 The ideal model of waqf financing

District, in 2014. From the renting of paddy fields they received Rp.
20,250,000,- (Banda Masjid Agung Semarang Empowerment Team,
2014).
As of the waqf land occupied by residents, a lease agreement
is made by the residents. For the waqf land located in Semarang
JIEMB | 47
City, BPMAS created it by making an agreement with the residents
of Siwalan Village, to give infaq monthly or daily for occupying the
donated land of the Great Mosque of Semarang. In 2014, the funds
collected from the donations were Rp. 96,849,600. The amount of
funds is only 53.42% of the initial estimate of incoming funds of Rp.
181,284,638,-. This is because there are several residents who are
in arrears in the payment of these incomes (Bondo MAS Asset
Empowerment Team, 2015). BPMAS also rents out productive
shops that were previously managed by BKM Kota Semarang.
3. Government assistance
Government assistance was obtained by BPMAS in developing
its assets, such as when purchasing a gas station belonging to th e
former Semarang Mayor Sutrisno Suharto. The gas station was sold
for 2 billion, the Central Java Provincial Government provided
assistance worth of 1 billion. The provincial government also
provided assistance worth of 500 million for the construction of the
house of the Imam of the Great Mosque of Semarang (Akhmad,
interview, 2015). BPMAS also received government assistance
worth of 2 billion for a land distribution project which would have
been prepared to build the MAS agro market. However, the project
cannot be continued because there is no guarantee from the
Ministry of Religion for the continuation of the project (Akhmad,
interview, 2015).
4. Cash waqf
BPMAS has also rolled out a financing mechanism using the
term cash waqf for the purchase of land for the former Hotel Bojong.
BPMAS creates coupons with certain stated amounts so that donors
can choose accordingly to their capabilities. Through these media,
funds are able to be raised from donors. Actually what is done by
BPMAS in this case is not included in the money waqf category.
However, it is actually a mosque waqf or parking lot waqf, because
the purchase of the land is to become the parking area for the Great
Mosque of Semarang. While the cash waqf is actually an investment
waqf in the banking sector, by depositing, or buying shares, or
sukuk. Also, the money is invested in the real productive sector, so
Journal of Islamic Economics, Management, and Business-Vol 2. No.2 (2020)
 Ahmad Furqon

that the value of the money is not lost but there are still only
investment goods, which are worth the money that has been
donated.

Endowment financing at the Pekalongan City Muslimin Foundation

JIEMB | 48
Waqf Financing at the Pekalongan City Muslimin Foundation
(YMKP) develops its waqf assets by implementing several financing
mechanisms, namely:
1. Government assistance
YMKP obtains capital to develop its waqf assets, including
government assistance, that is from the Directorate General of
Islamic Community Guidance (Director General of Islamic
Community Guidance) Ministry of Religion of the Republic of
Indonesia for the empowerment of productive waqf worth 2 billion in
grants. With the help of the Ministry of Religion and loans from
several generous people in the city of Pekalongan, YMKP can
produce waqf land which was previously an unproductive building,
by converting it into productive waqf in the form of an Islamic
Business Center, which consists of several business units, namely
Sharia hotels, restaurants/culinary business, 1 shophouse and 4
shops.
The total cost needed to fund the Productive Waqf Pilot Project
in the form of a Business Center Building is Rp. 3,128,670,500,- with
an annual income plan of Rp. 487,940,000,-. In short, the
achievement of BEP can be calculated as follows: Rp. 3,128,670,500
: Rp. 487,940,000 = 6.41 years X 360 days = 2307 days. Two billion
were obtained from the Directorate General of Islamic Community
Guidance's Productive Waqf Empowerment Assistance in 2006,
while the rest was obtained from loans from individuals.
2. Individual loans
In addition to funding from the Directorate General of Islamic
Community Guidance's Productive Waqf Empowerment Assistance,
YMKP received funds for the empowerment of waqf land owned by
individual loans, amounting to Rp. 650,000,000. The loan was
obtained without collateral, only because of the trust in YMKP. The
person who provided the loan was not a YMKP administrator or
involved in managing the waqf at YMKP. However, he made a loan
out of trust in YMKP. And YMKP can maintain this trust by repaying
the loan in 2010, which only took 4 (four) years from the time of the
loan to pay off the loan.

Journal of Islamic Economics, Management, and Business-Vol 2. No.2 (2020)

 The ideal model of waqf financing

Ideal waqf financing mechanism according to Nazhir YBWSA,

BPMAS, and YMKP JIEMB | 49
As for what kind of financing mechanism is ideal for waqf nazhir
to develop his waqf assets, the three waqf management institutions
have their own answers.
According to YBWS, the ideal financing is the easy-to-do
financing for nazhir with minimum risk, such as by lease financing
and by renting out the waqf land he owns. Since renting out the waqf
land does not cost money, it is sufficient for the waqf institution to
announce the leased waqf assets (Supadie, interview, 2015).
Renting out waqf assets is included in the category of financing that
has occurred for a long time. Kahf (2006) determines leasing as a
traditional financing mechanism. In the past, this renting method was
modified to take the form of hukr, which is a lease with a very long
term, so that the tenant can take advantage of the waqf assets that
he has rented for a lifetime. Or leasing with two payments (ijaratain).
This renting method is also with a long period of time. The first lease
payment is a large nominal amount, equal to the value of the waqf
assets, while the second lease payment is a small amount that is
paid periodically every month or year.
Using this first large payment, nazhir can produce other waqf
assets. However, the majority of waqf experts do not agree with the
long-term lease model because it can cause the loss of waqf assets
due to the length of the leasing period and the absence of profits
that can harm the recipient of the waqf. Another problem raising
from renting out land is if the land is not located in a strategic
location or is infertile to serve agricultural purposes so that nazhir
must seek other types of financing besides leasing the land.
YBWSA actually has other financing models that can be done,
and it is of added value to YBWSA compared to other waqf nazhirs.
It is financing with cash waqf. YBWSA was approved by the
Indonesian Waqf Board (BWI) as cash waqf nazhir on April 5, 2011,
and YBWSA was listed as the first cash waqf nazhir in Indonesia
(Sultan Agung Islamic Hospital's 40 Year Compilation Team, 2011:
53). That way, the money that people send for cash waqf is
transferred to the YBWSA account. YBWSA is required to introduce

Journal of Islamic Economics, Management, and Business-Vol 2. No.2 (2020)

 Ahmad Furqon

itself to the community as money waqf nazhir by bringing interesting

programs having positive and good values for the community.
According to BPMAS, the ideal waqf financing is to borrow
funds from donors or investors because it does not require
bureaucracy and complicated requirements as if borrowing from a
JIEMB | 50
bank (Akhmad, interview, 2015). However, before borrowing nazhir
must calculate whether it is possible to return the loan from the profit
of the productive business that will be carried out.
Loan-based funding, known as qard hasan fiqh, is a form of
funding for productive waqf land. However, qard hasan funding has
a risk of loss if the productive waqf financed by the loan suffers a
loss while nazhir does not have any collateral to compensate for the
losses. Therefore, before applying for a loan, nazhir must make
careful calculations about the business prospects to be carried out,
so as to minimize the potential for losses.
In Islamic banks, there is financing with qardul hasan. Qardul
hasan funds in the bank are obtained from zakat, donations and alms
from bank employees, or from fines paid by customers. The bank
does not apply a margin or interest for the borrower of the fund.
Therefore, nazhir can take the opportunity to apply as a recipient of
qardul hasan funds from Islamic banks.
According to YMKP, ideal financing is the same as BPMAS's
view, which is through loan funds to members of the community who
can afford it. YMKP has experience borrowing funds from a national
entrepreneur from Pekalongan, and YMKP was able to repay the
loan.
YBWSA and BP can provide many alternative funding. MAS
and YMKP can produce the waqf land that is managed, or to procure
new waqf, in addition to the forms of funding that have been carried
out by the three nazhir institutions, including:
Musyarakah or collaboration between nazhir and investors, in
the form of continuous cooperation or cooperation which reduces
the ownership of one party and ends with the ownership of the other
party.
Musyarakah Mutanaqisah Momitiyah bi al-Tamlik. BPMAS
manages the waqf land in collaboration with investors to build a shop
or lodging unit. The profits from the business are continuously
divided in half. Another way is BPMAS buys shares from the owner
of the capital from the profits until they finally own the shop or inn.
The funding model is using musyarakah carried out by the Dewam

Journal of Islamic Economics, Management, and Business-Vol 2. No.2 (2020)

 The ideal model of waqf financing

of Islam in Pulau Pinang Malaysia with JKP.Sdn. Bhd., a state-owned

company in Malaysia as a developer, to build 36 housing units. The
profit from the sale of the house is shared between the two parties
(Hasan & Abdullah, 2008).
Funding using the Build, Operate, Transfer (Build, Use,
JIEMB | 51
Transfer) system. YBWSA, BPMAS or YMKP as the representative
of the waqif submits the construction of the project to the investor
to finance the development within a certain period. The investor is
given a concession right to manage the building concerning its
economic benefits (or a percentage of profit sharing). After the
agreed time period has passed, the management of the building is
then given to YBWSA, BPMAS or YMKP as the owner of the waqf
land.
Muasasah Tanmiyah AMWAl al-AUQA in Jordan applies the
BOT model to build a large trade center that is the Al -Istiqlal Mall,
which is funded by private investors, worth of 30 million dollars. This
mall consists of 200 shops and a parking lot that can accommodate
600 cars according to the agreement with investors. Muasasah will
receive an annual rent of 75,000 Dinar and will own it in full after 25
years. In Malaysia, the Pulau Pinang Malaysia Islamic Religious
Council followed this method of constructing a 21-story UMNO
tower building in George Town. This building was established on
waqf land and leased to the developer for 99 years, at the end of the
lease period, the Council will own the building by sale transaction.
The BOT funding model is also practiced in the construction of the
MARA building in Lebuh Buckingham with a lease period of 30 years
(Hasan & Abdullah, 2008).
Funding using istisna' model. YBWSA, BPMAS or YMKP asked
Syari'ah Bank to build an establishment with clear specifications.
The bank appointed a developer to build the desired building by
YBWSA, BPMAS or YMKP. After the building was completed, the
developer handed it over to the bank, then the bank handed over
the building to YBWSA, BPMAS or YMKP. YBWSA, BPMAS or YMKP
then pays the building construction costs in full or in installments
until the agreed time period.

Journal of Islamic Economics, Management, and Business-Vol 2. No.2 (2020)

 Ahmad Furqon

Conclusion

Based on the results of the research, it can be concluded that:

The Sultan Agung Waqf Foundation (YBWSA) has
implemented a waqf financing mechanism in the form of public
JIEMB | 52 funding, government assistance, murabahah, and ijarah. BPMAS has
implemented a waqf financing mechanism in the form of donations
& alms, government assistance, ijarah, and cash waqf. Meanwhile,
YMKP provides financing for the development of its waqf assets in
the form of government assistance and qardul hasan.
YBWSA considers that the ideal financing is the one that nazhir
can easily do and has minimal risk, that is to lease out the waqf
assets they own. Meanwhile, BPMAS and YMKP consider that the
ideal financing for the development of waqf assets is qardul hasan
(benevolence loan).

References
Al-Hājary, Abdullah Sa’ad, 2006, Taqyīm Kafāat Istitsmār Amwāl al-Awqāf
bi Daulah al-Kuwait, Kuwait: al- Amānah al-'Âmah lil Auqāf.
Al-Kabisi, M.A.A. (2004). Ahkam al-Waqf fi al-Syari'ah al-Islamiyah, Terj,
Ahrul Sani Fathurrahman, Hukum Wakaf, Jakarta: IIMaN & Dompet
Du’afa.
Bin Aziz, Abdul Qadir, 2003, Fiqh Istitsmār al-Waqf wa Tamwīluh fi al-Islām
(Dirāsat Tathbiqiyah 'an al-Waqf al-Jazāir), PhD Dissertation. Al-
Jazair University.
Dawwabah, A.M. (2005). Tashawwur Muqtarah lil Tamwīl bi al-Waqf.
Awqāf. 9th ed.
Hasan, Z., & Abdullah, M. N. (2008, February). The Investment of Waqf
Land as an instrument of Muslims: Economic development in
Malaysia. In The Dubai International Conference on Endowments’
Investment, February (pp. 4-6).
Hasanah, U. (2011). Cash Waqf and People Economic Empowerment in
Indonesia. Ekonomi Dan Keuangan Indonesia, 59(2), 215.
Kahf, Monzer,2006, al-Waqf al-Islamy, Tathwuruh, Idāratuh, Tanmiyyatuh,
Suriah: Dār al-Fikr.
Mohammad, M. T. T. H. (2009). Alternative development financing
instruments for waqf properties. Malaysian Journal of Real
Estate, 4(2), 45-59.

Journal of Islamic Economics, Management, and Business-Vol 2. No.2 (2020)

 The ideal model of waqf financing

Sabit, M. T., Iman, A. H. M., & Omar, I. (2005). An ideal financial mechanism
for the development of the waqf properties in Malaysia. Pusat
Pengurusan Penyelidikan. Malaysia: Universiti Teknologi Malaysia.
Supadie, D.A. (2015). Wakaf Mensejahterakan Umat Rekam Jejak Yayasan
Badan Wakaf , Semarang: Unissula Press.
JIEMB | 53
Tim Buku 40 Tahun RSI Sultan Agung, 2011, 40 Tahun RSI Sultan Agung
Mengabdi dan Melayani.

Journal of Islamic Economics, Management, and Business-Vol 2. No.2 (2020)

 Ahmad Furqon

JIEMB | 54

Journal of Islamic Economics, Management, and Business-Vol 2. No.2 (2020)