PUBLIC EXPOSURE

Technical Notes of Waqf Core Principles

for Risk Management
BUILDING A WAQF ECOSYSTEM THROUGH THE
IMPLEMENTATION OF RISK MANAGEMENT STANDARDS
Dr. Ir. Imam T. Saptono
Vice Chairman of Indonesian Waqf Board
Zoom Meeting, October 30th 2020
OUTLINE

1. Background
2. National Waqf Profile
3. Risk in Managing Waqf Asset
4. Waqf Ecosystem Roadmap
Part 1………..
History has shown that waqf played an important role in the progress
and decline of the Muslims economy, and had become a formal
component in the state financial system during the heyday of Islam.

The fundamental question is what institutional intelligence is

missing and currently lacking, so that waqf fails to act as a pillar of
the ummah's economy

What can be done, especially by regulators, to bring back the glory of

waqf as a pillar of the ummah's economy
 • The pattern of institutional arrangements
for waqf varies from country to country,
some adopt a centralized pattern where the
waqf management institution (nadzir) of a
country is centralized and is a quasi of state
institutions, some are decentralized in each
province or state, etc.

• In Indonesia’s case, the waqf institution

developed with an autonomous pattern
and grew as a communal movement at the
grassroots level, so the disparity between
Source : Baird Zars (2014) nadzir was very high.
• Differences also occur in terms of waqf practices, such as the unfamiliarity of waqf in the form
of money, waqf for a certain period of time (temporary), etc. which depends on the school of
thought adopted. However, all schools agree that waqf plays an important role in supporting
the economic welfare of the people
• The scholars also agree that waqf is included in the area of ijtihad (reasoning). This condition
should be seen as a blessing and an advantage over a weakness, because waqf can continue to
follow economic developments and at the same time become an instrument that can answer
current problems faced by the ummah.
• In contrast to other social Islamic funds, waqf is known for the main concept (corpus) and the
benefits it generates, where the corpus must be preserved for its sustainability. On the other
hand, there is a tendency for the types of waqf assets to become more diverse and complex,
this is what demands an increase in nadzir's competence, especially in risk management.
 PROFILE AND CHALLENGES OF WAQF IN INDONESIA

Regulator Masyarakat (wakif) Aset wakaf Nadzir Mauquf ‘alaih

(Beneficiaries)
• Limited law • • Dominated by land (one • Thousands in number • Comes in great number
Low waqf literacy
enforcement of the largest in the and brought up and spreads out across
• The lack of world), generally for traditionally nations
synchronization and mosques, cemetery,  66% individual • Necessities that are
harmonization of and school (madrasa) nadzir more diverse and
regulations related • Under-developed due  16% organizational complex
to waqf to limited capital nadzir • More complete KPIs (Key
stakeholders • Complex waqf assets  18% legal nadzir Performance Indicator)
• Limited institutional (cash, stocks, insurance • Generally starting and increasingly
resources premiums, sukuk, etc.) from amil zakat (zakat transparent social
are growing collectors), with surveillance
limited capacity &
competence
 Framework of Nadzir Competency Standard

Waqf Asset Distribution of Accountability

Waqf Asset Waqf Asset
Receipt & the benefits of of
Maintenance Development implementation
Mobilization waqf assets

7 basic 8 basic
12 basic 8 basic 2 basic
competencies competencies
competencies competencies competencies
WCP

BI, IRTI – IDB and BWI are collaborating to initate the international standard of awqf principles (WCP)
Objective: Regulating waqf management and supervisory system at international level
The document had been launched at the World Bank-IMF Meeting in Denpasar Bali in 2019

Risk Management Standards & Guidance

 Functions and Objectives of Establishing the Work Competency
Standards (SKKNI) of Nadzir
WAQF INDUSTRY AND NADZIR ASSOCIATION
• Provide measurable standards in the
development of human resource
competencies in the field of waqf Competency
management (nadzir), where the Standard
WCP, which is a risk management
guide, becomes an inherent element
in each of the competencies
• Ensure that HR practitioners in Nadzir Nadzir
nadzir institutions are qualified based Professional Professional
on national standard Training Certification
Institute Institute
• Build public trust in the community
on managing waqf nationally
• Increase the izzah (honor) of the Technical Note (TN) - WCP is one of the
nadzir profession curriculum and test materials

SKKNI as a prerequisite for the certification process

 Set of Competencies Framework (ASK): Nadzir
The cash waqf nadzir must be more specific because it has a higher risk
Attitude (Syarat
Minimal) The Design of
Nadzir
certification

Se
)
sset

rti
level

fic
a

ati
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on
so

lev
ple

el
Level Breakdown

2(
sim

lev
2

el 1
l1(

Level according to Nadzir's

+p
leve

ro
Level 3 scope, functions and

d
uc
on

tiv
1 tasks (the most
ficati

Skil

e)
Serti

important things is
2 crite ri a + cash w
a qf )
ls can be measured
e l 3 (level
ation l ev
and measurable)
Knowled Sertific

ge
ASK: Attitude, Skills dan Knowledg
 ‫مقاصد الشارع‬

Islamic Economy Ecosystem

Islamic Economy Ecosystem

Benefit: World-Afterlife

Waqf linked Convergence-synergy

sukuk- Good Governance Value Creation
Sukuk linked Maximum Impact
waqf Economy-social activity
as instruments

Commercial Finance Islamic Finance Social Finance

Islamic Bank Strengthening ZIS
Empowering and WAF
l Islamic Social Funds are placed in Sharia Banks Synergizing
 ‫‪Thank You‬‬
‫السالم عليكم ورحمة هللا وبركاته‬