Potential of Cash Waqf Linked Sukuk (CWLS) Model as Financing Tool in Malaysia

Abstract

Cash waqf-linked sukuk (CWLS) is an innovation of Islamic social finance and an Islamic capital market instrument that has been introduced in Indonesia for various purposes, including social and economic contributions. Based on Indonesia’s experience and success in implementing CWLS for the benefit of society and Indonesia's economy, it seems to be a practical practice in Malaysia as well. This is because Malaysia and Indonesia have similarities in their communities and landscapes. Besides, Malaysia is quite familiar with and popular in implementing cash waqf and sukuk in general. Hence, the introduction of CWLS stands a chance to be accepted and practice in Malaysia in future. This financing tool aims to ease the collection of cash waqf funds, and act as an alternative for waqf assets to be developed, instead of focusing on the traditional practice. Therefore, this conceptual paper aims to discuss the potential of practising CWLS in the Malaysian context by conducting a document and content analysis. In the end of the research, it can be concluded that there are possibilities for CWLS to be implemented in Malaysia, which then assists in overcoming the issue of society, specifically in financial segment, and how this is in-line with Malaysia’s commitment in achieving Sustainable Development Goals (SDGs).