The role of Waqf as in instrument for social empowerment in Malaysia

Waqf has long been recognized as a crucial instrument in Islamic social finance that was viable in supporting socio-economic growth. Despite the vast potential of waqf assets in Malaysia, their utilization remained suboptimal. Additionally, significant social and economic gaps persisted, particularly in the rural regions of Peninsular Malaysia and East Malaysia. This study explored the role of waqf in supporting social empowerment in Malaysia, identified key challenges hindering its optimal utilization, and proposed strategic solutions to overcome these challenges and enhance its impact. Semi-structured interviews were conducted with stakeholders from key waqf institutions in selected states in Malaysia using a qualitative-exploratory research approach, while secondary data were also used to complement the findings. The findings highlighted that waqf had an impact on the enhancement of society’s welfare through primary sectors, including social benevolence, education, health care, and socio-economics, while also reducing dependency on government funding. However, the utilization of waqf was highly influenced by the economic conditions and social needs of each region, where economically constrained regions tended to allocate waqf for religious functions and basic socio-economic needs. Furthermore, the benefits of waqf were still hindered by various structural and operational constraints. To address these challenges, this study suggested increasing public awareness and developing a waqf funding system through cash waqf. By optimizing the role of waqf in social empowerment, Malaysia could promote inclusive development for society and ensure sustainable prosperity for future generations