Bridging Traditions: Waqf, Islamic Finance, and the Future of Malaysian Universities

In my recent journey through Türkiye, I witnessed the practical impact of Waqf—a tradition deeply
rooted in the Ottoman era. From public water taps to majestic mosques, funded by Waqf, the experience
inspired thoughts on applying this ancient practice in modern-day Malaysia.

Historically, Waqf has been a cornerstone of community welfare, supporting projects ranging from mosques to schools. Aligning seamlessly with Islamic finance principles, Waqf represents a tangible way to integrate financial initiatives with charitable undertakings.

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Waqf and economic practices

At its essence, Islamic finance encourages ethical and inclusive economic practices. The system embodies these principles, providing a structured approach to charitable giving and community development.

Understanding the harmony between Waqf and Islamic finance is key. Both emphasize ethical investments. Integrating Waqf into Islamic finance could amplify its impact on sustainable community
development.

Imagine a scenario where Islamic finance institutions collaborate to establish a Waqf-driven initiative for education in Malaysia. This partnership could fund schools in underserved areas and provide scholarships, creating a sustainable model that aligns with both financial and charitable objectives.

In Ottoman Türkiye, the system left a lasting legacy by establishing schools, libraries, public soup kitchens (imaret), Turkish baths (hammam), markets (bazaar), and travelers’ inns (caravanserai)—all aimed at benefiting the community. Implementing this wisdom to Malaysia today could unlock solutions for education, welfare, and public infrastructure.

Envisioning the allocation of such funds to universities for education, faculty development, and research, we anticipate a transformative approach. This strategy holds the potential to recreate a learning environment reminiscent of Ottoman-era libraries, fostering accessible knowledge hubs. Waqf could address students’ needs, by providing meals and comfortable accommodations. This mirrors the historical public food centre (imaret) that cared for individuals, ensuring students could focus on their studies without worries.

A remedy

This system can also remedy infrastructure gaps in universities, transforming lecture halls and amenities, which not only enhances learning but also benefits the broader community by creating vibrant, well-equipped spaces. Its history in providing scholarships aligns with its potential in Malaysia, breaking financial barriers and empowering individuals, thus promoting equal opportunities in higher education.

Back home in Malaysia, the impact of Waqf is not a distant historical tale but a living reality. Yayasan Waqaf Malaysia (YSM) reported a significant cash contribution of RM 18,476,275.78 from 2018 to 2022. Additionally, my university, Universiti Sains Islam Malaysia (USIM), collected RM 544,594.08 in 2019 and 2020, showcasing its commitment to Waqf principles.

Recognizing cash Waqf as tax-deductible, similar to zakat, would boost community participation. This regulatory change acknowledges it’s social impact, encouraging sustained contributions. While tax exemption provides a compelling incentive for individuals and businesses to contribute to Waqf, fostering community involvement among the students can go beyond financial support.

Holistic engagements

Encouraging student volunteerism, mentorship programs, and collaborative initiatives can create a more holistic engagement with endowment efforts. This approach not only diversifies the ways students can contribute but also fosters a sense of shared responsibility for the community’s well-being.

This timeless tradition draws inspiration from its Ottoman-era roots and holds the potential to illuminate Malaysia’s path towards a brighter, more compassionate future by fostering accessible education, supporting students’ needs, and enhancing community well-being.

Ahmad Iqbal Ihsan, a fourth-year student in the Faculty of Syariah and Law at Universiti Sains Islam Malaysia (USIM), is passionately delving into the intersection of historical traditions with the
contemporary issues.