Cash WAQF

Cash waqfs (cash trusts), unlike traditional waqfs that use immovable or noncash movable property, were established with money. They were seen as a means of generating income for charitable purposes and were considered a form of charitable giving (ṣadaqa) in Islam. While some waqfs served purely charitable goals, others, such as family trusts, were created to circumvent Islamic inheritance laws. The text delves into the historical development of cash waqfs, noting that they gained prominence in the early fifteenth century Ottoman Empire. There were debates among Islamic jurists regarding their religious validity. Some argued that cash waqfs violated the principle of perpetuity, a fundamental requirement for trusts, while others raised concerns about usurious practices concealed within these transactions. The administration of cash waqfs involved various lending processes, with the primary goal of generating income. These processes included muḍāraba, biḍā‛a, and mu‛āmala shar‛iyya, among others. These practices generated surplus income, which some saw as interest, while others viewed it as profit. The text highlights the ongoing debate about whether these practices constituted usury. Additionally, the text raises questions about the criteria used to determine the specific ratios applied in cash waqf transactions. It proposes that these trusts might have been established as a regulated and state-controlled alternative to inject credit into the market and legitimize surplus returns in lending transactions.