Business process model for “crowdfunding cash waqf model”

Abstract

Purpose

Cash waqf is a powerful financial instrument that deals with the issue of liquidity constraints in waqf institutions. While there are several models of cash waqf operating in different countries, there is increasing demand for innovative cash waqf models, especially within the financial technology context. This paper aims to propose a practical alternative model of funding for waqf institutions using the concepts of crowdfunding and cash waqf.

Design/methodology/approach

This study evaluated the literature relevant to cash waqf models that have been implemented in different countries and proposed a new viable alternative model.

Findings

Results offer an alternative financing model, named crowdfunding cash waqf model, for waqf institutions to overcome monetary constraints and enable development projects to be completed.

Practical implications

The current study has important implications for both officials and relevant stakeholders. It is sought to bring better consistency between cash waqf donors, solving the liquidity problem faced by waqf institutions, enhancing the transparency of waqf institutions and their use of waqf funds, wealth circulation and financing businesses without interest-based loans (riba). By incorporating a crowdfunding and investment mechanism in the model, this method of collecting funds will assist governments in reducing their expenditure on waqf institutions and other social development programmes.

Originality/value

The proposed model differs from current methods of generating cash waqf, including those are also internet-based. The proposed model is devised to help waqf institutions achieve financial sustainability by including an investment mechanism in the model to sustain the development of waqf projects.

Citation

Al-Daihani, M., Dirie, K.A., Alam, M.M. and Abdullah, A.S. (2023), "Business process model for “crowdfunding cash waqf model”", Journal of Islamic Accounting and Business Research, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JIABR-02-2023-0046