Professional Diploma in Waqf Management

Wakaf in Singapore - Its Applications & Future Prospects

Instructor: Dr Faleel Jamaldeen

Student: Fazrihan Bin Mohamed Duriat

12 July 2021
Wakaf in Singapore – Its Applications & Future Prospects Professional Diploma in Waqf Management

Content Page
1. Introduction .................................................................................................................................... 3
2. Foundation of Waqf ........................................................................................................................ 3
2.1 Types of Waqf........................................................................................................................... 3
2.2 Rules & Characteristics of Waqf................................................................................................ 4
3. Waqf Legislation in Singapore ........................................................................................................ 5
4. Waqf properties in Singapore ........................................................................................................ 6
5. Current Issues ................................................................................................................................. 6
6. Integrating Waqf With Fintech ....................................................................................................... 7
7. Conclusion....................................................................................................................................... 7
References ............................................................................................................................................. 8

Page 2 of 8
Wakaf in Singapore – Its Applications & Future Prospects Professional Diploma in Waqf Management

1. Introduction

.ُ‫عو لَه‬
ُ ‫ح يَ ْد‬ َ ‫اريَ ٍة َو ِع ْل ٍم يُ ْنتَفَ ُع ِب ِه َو َولَ ٍد‬
ٍ ‫صا ِل‬ َ ‫ع َملُهُ ِإالَّ ِم ْن ثَالَث َ ٍة ِم ْن‬
ِ ‫صدَقَ ٍة َج‬ َ َ‫سا ُن ا ْنق‬
َ ‫ط َع‬ ِ َ‫ِإذَا َمات‬
َ ‫اإل ْن‬
When a human dies, all his/her good deeds come to an end, except three things: Sadaqah Jariyah
(i.e. Ongoing charity), beneficial knowledge and a righteous son who prays for him/her.

- Sunan an-Nasa'i 3651

In today’s world with a capitalist economic system, the Islamic financial industry is looking at ways to
benefit society, instead of purely seeking profits. Islamic social finance is the way moving forward, with
zakah and waqf as the main tools.

Waqf can be seen as a type of charity that provides continuing benefits to the public or specific group
of people. Specifically, ISRA (2018) defines it as a “sadaqah jariyah” (‫ )صدقة الجارية‬based on Islamic piety.

2. Foundation of Waqf

2.1 Types of Waqf

Waqf can be classified in different ways.

Based on the flow of benefits, waqf can be categorized in the following manner:

• Direct waqf, where the asset donated is used directly for the intended purpose for the
beneficiaries.
• Investment waqf, in which the asset may be used for commercial purpose (e.g. lease),
afterwhich the net profits will be channeled to charitable bodies as mentioned in the
waqf deed.

Based on nature of the beneficiaries, waqf will be categorized differently as below:

• Religious waqf, with focus on the mosques and religious schools

• Philanthropic waqf (also known as waqf khayri), where the aim is to target mainly the
poor such as preparing a well to provide water for villages, including providing education,
health care and environmental protection.
• Family waqf. This is called waqf ahli or posterity waqf, where the children and
descendants of the donor (i.e. waqif) shall have the first right to enjoy the benefits and
revenue of the waqf, after which excess can be given to the public. This is also
encouraged because the Prophet (‫ )ﷺ‬dislike a Muslim from leaving his family poor.

Page 3 of 8
Wakaf in Singapore – Its Applications & Future Prospects Professional Diploma in Waqf Management

Waqf can also be classified based on the type of donated asset:

• Physical waqf, where the subject matter is a physical asset. Those assets will be endowed
and either invested or used directly by the beneficiaries. Those immovable will include
houses, wells and toilets, although it is also common to see movable ones like bicycles,
boats and Koranic books with Braille, as long as they are non-persishable.
• Cash waqf, where the asset is generally cash or financial securities (e.g. stocks). This
was practised by the Ottoman Empire. There is greater flexibility in using the monies to
maximize returns while keeping risks manageable.
• Corporate waqf. This is unique as it may not be found in traditional Islamic literature.
Yet, it is an innovation as there is an legal entity with status of management-trustee to
exercise powers for the intended beneficiaries per the waqf deed.

2.2 Rules & Characteristics of Waqf

The main objective of a waqf is to for the trustee to protect and preserve the waqf asset and the
interest of the waqif. The waqf should remain properly maintained, productive and beneficial to
society, not idle and abandoned. Hence, the trustee chosen must be responsible and capable. As
waqf is a voluntary act of benevolence, it cannot violate any Shariah rulings, such as providing
interest-based microfinancing to the needy. Usage of waqf must align with what are stipulated by
the waqif in the waqf deed.

Many scholars agree that waqf have these following qualities:

• Perpetuity;
• Irrevocability; and
• Inalienability.

Most waqf assets should possess permanence nature, though some scholars do allow temporary
waqf as long as the duration is clearly stipulated. ISRA (2018, p 716) clarifies that waqf of “books,
agriculture, machinery, livestock, shares and stocks” are allowed and it plays an important to also
developing human resource in capacity building so the poor can start working to get out of their
impoverishing vicious lives.

In addition, waqf cannot be revoked, especially if the asset is a mosque. Under Shariah, a waqf
becomes effective the moment declaration is made by the donor, even without prior knowledge of
the beneficiaries or any witnesses. The subject matter of the waqf will technically goes back to
Allah, so it should not be revocable. However, for ease of administration, such declaration should
be formalized via an executed waqf deed which will then have legal effects.

Waqf properties also not be encumbered. It must be free from any charge, debenture or mortgage.
Hence, in normal circumstances, they cannot be sold or transferred. However, some scholars allow
istibdal, where there is a “process of exchanging the waqf property for another property of
equivalent value with approval of judicial authorities” (ISRA, 2018, p 717).

Page 4 of 8
Wakaf in Singapore – Its Applications & Future Prospects Professional Diploma in Waqf Management

Lastly, it is necessary for waqf assets to be invested in Shariah-compliant business sectors. In

some cases, kafalah (guarantee) by a third party is needed and a sophisticated diversification
portfolio strategy is required. Risk management is necessary to ensure loss of principle is
minimized.

3. Waqf Legislation in Singapore

There are about 6 million people living in Singapore and close to 15% of them are Muslims. Under
Singapore law, the Muslims will refer to the Administration of Muslim Law Act (AMLA). The Muslim
community is quite unique, being the only community in Singapore whose affairs are regulated in the
national statutes. The objective is to promote legal pluralism and create a special status for Malays as
indigenous people of Singapore. The AMLA empowers the Islamic Religious Council of Singapore
(“MUIS”) to interpret Islamic law on behalf of all Singaporean Muslims. AMLA covers many areas for MUIS
to look into, for example, the administration of yearly hajj pilgrimages, halal certification, waqf and zakat
funds and alerting the Muslims concerning false Islamic doctrines spreading. However, MUIS do not have
any power to impose fine or penalty to anyone who breaches the AMLA except when criminal breach is
also involved.

Per AMLA requirements, all waqf properties, whether ‘am (general) or khas (specific), are vested in MUIS.
There is a total of 91 waqf assets, of which 69 are managed directly by MUIS while 29 are delegated to
trustees. In addition, MUIS is empowered to appoint and remove the waqf trustee. The total asset value
is more than SGD800 million.

MUIS implemented plans such as Wakaf Revitalisation Scheme to identify waqf properties that can give
better economic returns for beneficiaries, with assistance from its subsidiary entity, Warees Investments
Pte Ltd. It aims to enhance the value waqf properties through asset enhancement and remodelling of real
estate concepts aligned with real estate market and urban development in local context.

In addition, MUIS recently created a waqf ilmu. The objective is to fund Islamic education in Singapore.
Monies donated by the waqif will be invested in Shariah-compliant investments, after which the returns
will be utilized to fund the costs of providing Islamic education. This type of cash waqf is also done in
Pergas Endowmen Legasi Ulama (PERLU) for PERGAS to collect SGD20 million to develop a sustainable
source of income that ensures financial stability and independence to support the pool of religious teachers
and its services for the Muslim community.

MUIS also announced that they will be establishing Wakaf Masyarakat Singapura (Singapore Community
Wakaf) to financially support its religious institutions, development of religious teachers and community
programmes. This was announced by Minister-in-charge of Muslim Affairs Masagos Zulkifli at his Virtual
Hari Raya Get-Together (Straits Times, 2021). To-date, about SGD4.9 million of waqf funds have been
collected and will be distributed to mosques, Muslim organisations1 and madaris (Islamic religious schools)

1 Examples include 4PM, Casa Raudha, Pertapis Children Home and United Indian Muslim Association.
Page 5 of 8
Wakaf in Singapore – Its Applications & Future Prospects Professional Diploma in Waqf Management

4. Waqf properties in Singapore

The first waqf in Singapore was the Masjid Omar Kampung Melaka endowed by Habib Syed Omar Ali
Aljunied, a trader who originated from Yemen. Other developments include the following (Fazrihan, 2015):

• Residential properties at Duku Road, Telok Indah (Waqf Kassim)

• Service apartments at Somerset Bencoolen (Waqf Syed Omar Ali Aljunied)
• Commercial properties at Dunlop Street, Kandahar Street, Pagoda Street, South Bridge Road,
Telok Ayer Street, Temple Street, Changi Road, North Bridge Road, Upper Dickson Road and
Joo Chiat Road.
• Waqf mosques i.e. Masjid Haji Md Salleh (Makam Habib Nuh), Masjid Khalid, Masjid Khadijah,
Masjid Kassim and Masjid Bencoolen.
• The Chancery Residence, an exclusive cluster housing in a prime district (Waqf Shia Dawoodi
Bohra)
• Madrasah Al-Maarif Al-Islamiah at Lorong 39 Geylang (Asset Migration Waqf)
• Sale and asset migration to 11 Beach Road for enhancing returns to beneficiaries

Since 1970s, there has been no new waqf properties endowed. There are possible reasons (MUIS, 2021):

• Increasing property prices, making ownership of freehold properties costlier

• Sources of charitable acts have increased such that waqifs could have probably given their
wealth elsewhere e.g. donations overseas
• Lack of literacy on waqf matters in Singapore, hence the Muslim philanthropists are unaware of
the potential waqf could do for the local Muslim community.

5. Current Issues
In mid 2021, there was a commotion regarding a claimed misused of waqf. The Wakaf Haji Pitchay Meerah
Hussain is a property at No 5 Lorong 9 Geylang that the waqif intended to be used as a madrasah.
However, it was discovered that the a Chinese temple was built on that area. After a thorough investigation
by MUIS, it was confirmed that istibdal has taken place. The waqf asset was earlier transferred by MUIS
back in 2002 to a 999-year leasehold property at 11 Beach Road. Crasco Building, a commercial building
containing offices (Channel News Asia, 2021). MUIS clarified that as the place could not be made into a
madrasah, MUIS has decided to implement the closest alternative to meet the waqif’s intention to generate
some income. The idea of asset migration and wakaf redevelopment to achieve the objectives of the waqif
were approved by MUIS Fatwa Committee way back in 1985.

Lastly, BNiaga Pte Ltd does waqf, as well as aqiqah and qurban for a specific beneficiary in Singapore
i.e. Religious and Educational League of Radin Mas. The waqf items include bicycles, boats, al-Quranic
books, pumping wells, small houses and toilets.

Page 6 of 8
Wakaf in Singapore – Its Applications & Future Prospects Professional Diploma in Waqf Management

6. Integrating Waqf With Fintech

Digitized waqf systems can be made possible using smart contracts. Using blockchain technology, Hazik
Mohamed (2021, p 201) clarified that “permissioned access can be given to state authorities to verify the
previous ownership of the waqf assets, or the stipulated wishes of the waqf founder…”

A good example is Global Sadaqah online platform which has an office in Singapore. It does CSR, zakah
and waqf and has complied with Islamic Digital Economy (IDE) Standards Compliant with several waqf
projects in Nigeria and Indonesia. Some waqf projects are as follows:

- Building Africa's First Masjid Using Only Cryptos (RM220,000)

- Waqaf A Quran In Masjid al-Haram In Makkah (RM25,000)
- The Ultimate Waqf: Quenching Thirst in Africa (RM50,000)
- Safeguarding Modesty: Building A Women Only Maternity Clinic (RM35,000)
- Establishing a Waqf in the Heart of Nigeria (RM45,000)
- Digital Waqf - Stepping Into The Future: Intelligent Robo Shariah Advisor (RM50,000)
- Cash Waqf: Sustainable Housing in Indonesia (RM20,000)

Finterra is a technology-based company providing blockchain-based Islamic applications. Finterra’s

product includes the WAQFChain to facilitate waqf using blockchain technology. It has the following in-
built functions:

- Smart contracts
- Digital security and data integrity
- Cause management
- Fund accounting
- Crowdsourcing
- Reporting

Using such technology will provide an efficient way for Finterra to raise money (via crowdfunding) and
transfer ownership of waqf, after which donations from Muslims can help operate social projects, such as
mosques, religious schools and welfare homes. The digital assets are actually representative of a
participant’s stake in that specific waqf. These blockchain platforms are testing on pilot waqf projects from
existing endowments in Singapore, Malaysia and Indonesia.

7. Conclusion

In today’s economy, social welfare is everybody’s responsibility. Philanthropic institutions such as waqf
are to boost social economy as it provides sustainable mechanism to provide education and health
services and aid in poverty alleviation, in line with United Nations’ Sustainable Development Goals. The
potentials of waqf is huge but the implementation will face several constraints. Hence, a concerted effort
is need at various levels.

Page 7 of 8
Wakaf in Singapore – Its Applications & Future Prospects Professional Diploma in Waqf Management

• Micro level – Identifying waqf assets with the greatest potential for development
• Meso level – Better networking and consultation with various stakeholders in providing education,
consultancy, accountancy, regulatory advisory, etc.
• Macro level – Implementing regulatory surveillance, treatment and reporting

‫َشء فَإ َّن ٱ َّ ََّلل ِب ِهۦ عَ ِل مي‬ َ ‫لَن تَنَإلُو ۟ا ٱلْ ِ َِّب َح َّ َّٰت تُن ِف ُقو ۟ا ِم َّمإ ُ ُِت ُّب‬
ْ َ ‫ون ۚ َو َمإ تُن ِف ُقو ۟ا ِمن‬
ِ
None of you [believers] will attain true piety unless you give out of what you cherish: whatever you give,
God knows about it very well.

- Holy Qur’an Surah Ali Imran, Verse 92

References
• Channel News Asia, MUIS refutes allegations of Muslim charitable endowment in Geylang being used
for Chinese temple, https://www.channelnewsasia.com/news/singapore/muis-wakaf-haji-pitchay-
meerah-hussain-5-lorong-9-geylang-15061682, accessed 11 July 2021

• Hazik Mohamed, Beyond FinTech – Technology Applications For the Islamic Economy, World
Scientific, 2021, Singapore.

• International Shari’ah Research Academy For Islamic Finance, Islamic Economics – Principles &
Analysis (2018), Lorong University A, Kuala Lumpur.

• Fazrihan Duriat, Fiqh Aqalliyyat & Maqasid As-Shariah - Case Study of Singapore, 2015,
https://www.academia.edu/21626363/Fiqh_Aqalliyyat_and_Maqasid_As_Shariah_Case_Study_of_S
ingapore, accessed 09 July 2021

• Finterra, WaqfChain, https://finterra.org/waqfchain/, accessed 10 July 2021

• Global Sadaqah, Waqf Campaigns, https://globalsadaqah.com/waqf, accessed 10 July 2021

• MUIS, Wakaf, https://www.muis.gov.sg/wakaf, accessed 8 July 2021

• MUIS, WAKAF ILMU FOR EDUCATION, https://www.muis.gov.sg/wakaf/Creating-My-Wakaf/Wakaf-

Ilmu-for-Education, accessed 9 July 2021

• MUIS, WAKAF REVITALISATION SCHEME, https://www.muis.gov.sg/wakaf/Strengthening-

Wakaf/Wakaf-Revitalisation-Scheme, accessed 10 July 2021

• PERGAS, https://perlu.pergas.org.sg/, accessed 11 July 2021

• The Straits Times, Muslim organisations, mosques to get $4.9m from wakaf income
https://www.straitstimes.com/singapore/muslim-organisations-mosques-to-get-49m-from-wakaf-
income, accessed 8 July 2021
Page 8 of 8