The Role Of Islamic Banks In Achieving Sustainable Development Through Cash Waqf

Abstract

Islamic banks are increasingly responsible for contributing to sustainable development through various Sharia-compliant financial options. One such option is cash Waqf, which plays a crucial role in ensuring the continuity of charitable activities in society. Many Islamic countries face challenges in achieving sustainable development due to multiple factors, primarily the difficulty of financing sustainable development projects. The concept of cash Waqf, which was prevalent in Islamic civilization in past centuries, has re-emerged as a means to support sustainable development goals (SDGs) through the mechanisms and financial instruments provided by Islamic banks. This study aims to explore the concept of sustainable development, cash Waqf, and how Islamic banks can leverage it through their financing and investment mechanisms to achieve sustainable development, improve societal welfare, and enhance the quality of life for individuals. The study employs both the historical descriptive method and the analytical deductive approach. The findings indicate that Islamic banks bear a responsibility to finance sustainable development programs in accordance with Shariah objectives, ensuring a balance between material and spiritual needs within society. Furthermore, the study highlights that the Islamic perspective on sustainable development is broader and more comprehensive than its Western counterpart. It also confirms the Shariah legitimacy of cash Waqf and its potential application in Islamic banking through the establishment of endowment funds to mobilize, invest, and direct financial resources toward sustainable development projects in alignment with donors' intentions. The study recommends benefiting from global experiences in cash Waqf management, encouraging Islamic banks to disclose their financing activities related to endowment funds, and promoting strategic partnerships between cash Waqf institutions and To achieve the Sustainable Development Goals.