Management of cash waqf fund generation through the implementation of istibdal in Kedah

Abstract

Purpose The purpose of this study is to examine the management of cash waqf fund generation through the implementation of istibdal in Kedah. Design/methodology/approach The data are obtained through literature and empirical data. The authors first review the literature on the importance of waqf fundraising, the implementation factors of istibdal waqf and the relevance of istibdal method as a waqf fund generation medium to understand the extent to which the scholarly articles have discussed these topics. Furthermore, the authors conducted face-to-face interviews with two Kedah Islamic Religious Council (Majlis Agama Islam Kedah [MAIK]) officers, who were directly involved in the affairs of istibdal waqf to obtain holistic information regarding implementing istibdal waqf properties in Kedah. As a result, several themes are defined from the interview data before being analysed based on the content analysis method. Findings The results of the study show two istibdal implementation processes outlined by the Kedah Islamic Religious Council (MAIK), namely, the istibdal implementation process for waqf land registered title deed, and waqf land registered as reserve certificate for religious use like mosque and cemetery. The results also showed three factors in implementing istibdal in Kedah: the acquisition of waqf land by the state authority (PBN), istibdal application by the state education department (JPN) and istibdal application by the mosque committee. Out of eight cases of istibdal implementation, four have generated cash funds for MAIK through investment methods from the sale of waqf lands and rental of replaced shophouses that are able to cover the expenses of managing waqf properties in Kedah. Several suggestions are also recommended for MAIK to improve its istibdal policy, thus enabling the institution to generate cash waqf funds at the maximum rate. Research limitations/implications This study only focused on the implementation factors and the generation of cash waqf funds through istibdal in Kedah, while it can be expanded to other states like Terengganu, Kelantan and Penang. Furthermore, this study only interviewed officers who manage matters related to the affairs of waqf properties, as the session can actually be extended to other respondents, such as those specialising in cash fund generation investments and others. Practical implications This study proposed some improvements to the policy and guidelines of istibdal waqf property to MAIK after a few shortcomings were identified throughout this study. If improved, these proposals will have a significant impact, especially on the waqf properties involved in the implementation of istibdal, where it has the potential to bring cash generation and ensure the constant economic value of waqf properties. Social implications This study has a tremendous impact on society, in which their areas have cash waqf funds that can be developed. It can benefit the needy and increase funds for the welfare expenditure of Muslims through rental income, investment and development. Progress on waqf property provides a high indication of the efficiency of an organisation in managing the waqf property. Thus, the public, especially the rich, is motivated to fulfil their charitable practices through waqf mechanism and share their wealth with the needy. Originality/value This study contributes to comprehensive field data on the implementation factors and generation of cash waqf funds through the implementation of istibdal in Kedah. The results of this study are significant to be used by waqf property management.