The Role of Cash Waqf in Poverty Reduction: A Multi-country Case Study

Abstract

Poverty is a severely debilitating problem affecting many countries in the Muslim world. The fight against poverty and alleviating it from the society are imperative. Its reduction and alleviation not only depend on economic and social policies, population size and resource endowments but also on the types of economic undertakings being pursued. This case study explores the potential of faith-based endowments—cash waqf—to reduce the level of poverty in Somalia. It analyses critically the cash waqf models existing in two selected Muslim countries in relation to the socio-economic situation in Somalia. In line with existing literature, the study adopted the waqf shares scheme. This scheme seems to be appropriate to Somalia for several important reasons. It is relatively easy to raise funds from the public via traditional collections of money by cash or mobile payment systems which are widely used in Somalia. It is argued that the funds generated could be used to create employment opportunities, and as a result, many poor Somalis will be empowered financially, socially and educationally.