Temporary Waqf (Waqf Muʾaqqat) as the Enabler of Cash Waqf Linked Sukuk: Structure, Socio-Economic Impact and Lessons for Malaysia
Abstract
Cash Waqf Linked Sukuk (CWLS) links cash waqf with Indonesia’s sovereign sukuk market and allows founders to dedicate funds either permanently or for a fixed term. This study examines how temporary waqf (waqf muʾaqqat) functions within the instrument and what Malaysia can learn from it. Using a desk-based qualitative case study combined with doctrinal analysis, it analyses 61 documents—statutes, fatwas, official disclosures, press reports and studies available up to September 2026—selected against explicit criteria, coded under nine categories and triangulated across official, press and academic sources. A longitudinal dataset of all identifiable series from 2020 to 2025 is compiled. Four findings emerge. First, under the temporary option the endowed corpus is the cash itself for the tenor of the sukuk; its return is the benefit allocated to beneficiaries, and the corpus reverts at maturity—a structure grounded in Mālikī doctrine and Indonesian statute but contrary to the Shāfiʿī requirement of perpetuity. Second, orders across six retail series rose from IDR 14.91 billion to IDR 306.28 billion, but the growth came mainly from institutions; individual founders numbered between 591 and 1,041 per series, and their orders levelled off at about IDR 37 billion. Third, projected coupon flows must be distinguished from reported disbursements: only SW001 has published outcome data (1,927 eye patients treated within six months against a five-year target of 2,513), and a quasi-experimental evaluation of empowerment programmes found no statistically significant difference between beneficiaries and non-beneficiaries. Fourth, CWLS is not a “zero cost” instrument; government financing cost, investor return, the founder’s opportunity cost and social-transfer value are distinct quantities. For Malaysia, the lessons that its Waqf-Featured Fund Framework cannot already deliver are sovereign protection of principal, a maturity-stage option to convert to perpetual waqf, and integrated founder data. Recommendations are classified by federal, state, regulatory and institutional responsibility.