Risk Management in Waqf Administration in Malaysia

Abstract

Waqf governance and management faced many challenges nowadays. Various developments have emerged in Islamic fintech sector and have created new battlefield in economy including Islamic finance. This, to a certain extent, contributed to the new game changers in the Waqf sector. This paper aims to investigate the existing as well as the potential risk in Waqf governance and management in view of the developments taking place in Islamic finance as well as the Islamic social finances. Specifically, the study identifies legal risk and threats in Waqf management. It is acknowledged that global development creates borderless phenomenon in all aspects of life, socially, economically, and politically where Waqf must be ready to resist and overcome the challenges. The findings show that legal framework contributes a considerable degree of risks in Waqf management in Malaysia while Islamic fintech has directly and indirectly contributed to the new expectation in Waqf governance and management. Waqf is no more seen as a commodity that may be managed or dealt with in isolation but with synergy and innovation with other social finance products taking all opportunities available in Islamic fintech. Contemporary waqf tapping on Islamic finance is unavoidable and necessary for waqf to remain relevant, sustainable, and functionable beyond providing religious duties and preferences. Having a global standard of practice is necessary in addressing the potential risk in Waqf management.