Cash Waqf Linked Deposit: A Proposed Waqf Model for Education Program and Poverty Alleviation in Indonesia

The objective of this paper is to examine the potential role of Cash Waqf Linked Deposit (CWLD) that could contribute to Indonesia’s education system and efforts to reduce poverty. The study, which employed a qualitative approach and data from papers and scholarly works on the subject of Cash Waqf, included Cash Waqf Linked Sukuk (CWLS) and compared it with Cash Waqf Linked Deposit. CWLD shall consist of three instruments, namely temporary cash waqf, Islamic fixed deposit, and Islamic financing in the Islamic bank. The existing product offered by Islamic banks is whereby the customer places a deposit in an Islamic bank, while the return will be transferred to nazhir as a permanent waqf from the depositor. While in CWLD, the capital will become a temporary waqf, and the return will be a permanent waqf. The paper proposes the use of cash waqf from deposits for the program that may provide more benefits in the future for the citizen including education programs and poverty alleviation. This research shows that the return from CWLD is that it may be used for providing education programs such as building schools and traditional markets. The analysis of Cash Waqf Linked Deposit (CWLD) a new Islamic product that OJK launched in 2023 is valuable in drawing the attention of Islamic banking entities to develop and implement CWLD without jeopardizing their sustainability, competitiveness, or institutional survival. This is evident from the previous model of CLWS and the proposed model of CWLD to incorporate their social financing product initiatives.