Plantation Waqf to Promote Education: Sale and Waqf Back

In a few earlier blogs I have highlighted cases where the concept of waqf  has been used in an innovative manner, e.g. creation of a corporate waqf for provision of healthcare (Wakaf An-Noor); education, encouragement to art and culture (Vehbi KoC Vekfi); livestock for adahi (Awqaf New Zealand) for Muslims living in Western countries; relief and rehabilitation through microfinance following natural distasters (Fael Khair) and of course, aggressive development of waqf properties for various acts of piety (MUIS). In this blog I share the example of another innovative application of the concept of waqf for developing a university – the University College Bistari (UCB), Terengganu, Malasia. The facts of the case are extracted from a recent presentation by Professor Dr Mustapha Ismail, Vice-Chancellor of the University at the The 6th Islamic Banking, Accounting and Finance Conference 2014 (6th iBAF) organized by the Islamic Sciences University Malaysia (USIM) at its campus during September 23-24, 2014. Throughout the presentation, Dr Mustafa fondly referred to his university as “The Waqaf University”.

The innovative aspect of the project may be traced to the novel method of raising funds that was initiated a decade ago. Peyatim (Persatuan Anak-Anak Yatim Malaysia), the organization for the welfare of orphans  (headed by Professor Dato’ Dr Haji Mahmud Mansor) divided a large tract of land (that was originally funded by sadaqa or free donations) – 347.8 hectares of Oil Palm Plantation in Kemaman – owned by the organization into small lots of 10 meters square, each having a palm tree and sold to prospective waqaf contributors in Malaysia. The funds mobilized were used to build and develop residential hostels for the orphans. (Currently, the organization has 54 hostels within the country to support the orphans in their educational pursuits who went to the mainstream schools in the vicinity.) At the same time the organization continues to benefit from the Plantation, which is now a waqf.

This idea of sale-and-waqf-back model to develop waqf funds is being expanded further for UCB, which is owned by Peyatim, Perkaya, and Yakin. UCB was originally established as the Kolej Teknologi Bestari during the late 1990’s. It was upgraded to become a University College in the year 2012, initially to offer degree programs in economics, management, information technology, counselling, apart from diploma programs in various fields including nursing. Being owned by non-governmental organisations, UCB has no recourse to government funding. Therefore, the only way such expansion could be funded was through internally generated revenues in the form of tuition fees and accommodation fees. And since it believed that eduction could not and should not be priced at market rates, waqf endowment funds provided the answer.

In seeking to move ahead with its unique model of mobilizing funds, UCB also believed that:

• All muslims, as well as non-muslims will contribute to a waqf fund provided that the waqaf structure is well-defined;
• Not all people have the ability to perform the act of waqaf due to the lack of money, land, or building;
• The assets that are being held by most people are mostly being reserved for inheritance by their own off-spring,
• To most people, money is the only form and source of waqaf.

The funds will be used for (i) physical development of the campus; and (ii) students’ scholarship development.

The model consists of 3 main elements:

• Administrator or naẓir: According to Malaysian laws, the nazir of all awqaf is the respective State Islamic Religious Council. However, it may appoint an organisation to administer a giev waqf on its behalf. For UCB the nazir is the state agency, the Majlis Adat Istiadat Melayu dan Agama Islam Terengganu or MAIDAM is officially the nazir and will appoint the Peyatim as the administrator on its behalf subsequent to the acts of waqf.

• Asset: The asset that is to be used for the development of the waqaf fund is a piece of land that currently belongs to Peyatim and that presently houses the UCB. This land is of the size of 320 acres, located in Putera Jaya, Setiu, Terengganu. The said piece of land is then divided into small lots of one square foot each to be sold to potential donors (waqif) at a price of RM30.00 per lot. Those lots that are purchased would then be endowed back with Peyatim as the beneficiary. All waqifs would be awarded with certificates to show that they have a plot of land that has been given to waqaf for the university. The money collected through sale would become a fund for the development of the university.

It may be noted that the land prior to the commencement of the process is not a waqf land. It is owned by Payatim. The funds that are collected are also not waqf. The new owners after the sale, when they make the act of waqf turn into waqif and the land becomes waqf land. In addition to being the beneficiary, Payatim is also the administrator of the waqf. Though the collected funds are not waqf, Payatim has the additional responsibility to ensure that these are managed efficiently and in an Islamically acceptable manner.

• Beneficiaries: The ultimate beneficiaries of the waqf are UCB and its student community. UCB would get funds for its physical development as well as academic and research programs, while the students would be able to finance their education through scholarships and possibly interest-free loans to cover their tuition fees.

Physical development of the campus has so far been supported by the fund that is collected. It is envisaged that in the not too distant future, UCB would be able to develop into a full-fledged university, funded by waqf and raising the standards of higher education while making it easy, convenient and affordable for the student community.

Mohammed Obaidullah | October 12, 2014