What can be done with a cash Waqf?​

Mufti Faraz Adam has spent almost a decade studying Islamic law. He completed his Islamic studies in the six-year Alimiyyah degree at Darul Uloom Leicester. He then went…Read More

In the Name of Allah, the Most Gracious, the Most Merciful.

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.

A cash Waqf is a permissible form of Waqf. The income generated from utilisation of the money is to be spent, while retaining the principal amount as Waqf. Utilisation may include, for instance, Shari’ah-based lending as well as permissible and safe investments like Mudarabah where the profit share owned by the Waqf goes to beneficiaries.

A Cash Waqf allows the lending, investing and trading of the designated cash. A Cash Waqf can be positioned as a lending fund where the Waqf asset is given as an interest-free loan. In such an instance, the value of the initial Cash Waqf will be maintained as Waqf upon repayment. The Hanafi jurist Ibn Abidin states:

“Cash is only benefited from by consumption; therefore, its equivalent value will be considered as the replacement of the original Waqf cash. This is because cash is not specified [generally in Islamic law]. In addition, cash is from the moveable assets which now has customary practice of Waqf designation, and thus it qualifies as a valid Waqf asset as outlined by Imam Muhammad. [An example of a consumable asset as Waqf is as follows] It is permissible to give wheat as Waqf to the needy who can plant these grains and grow wheat for themselves. Thereafter, they can return the equivalent amount back as the Waqf asset which can be lent out to others. This can be a recurring process.” (Hashiyah ibn Abidin)

And Allah Alone Knows Best

Mufti Faraz Adam,

I Waqf Shariah Advisor