Cash Waqf Linked Sukuk vs Traditional Waqf in Indonesia and Malaysia: A Comparative Qualitative Analysis of Institutional Challenges, Implementation Gaps, and Implications for Islamic Social Finance
Keywords:
Cash Waqf Linked Sukuk (CWLS), Traditional Waqf, Islamic Social Finance, Waqf GovernanceAbstract
Cash Waqf Linked Sukuk (CWLS) has emerged as a transformative innovation in Islamic social finance, integrating waqf philanthropy with sovereign sukuk instruments to mobilise social investment at scale. Indonesia pioneered the global launch of CWLS in 2020; Malaysia remains in a feasibility assessment phase. Both nations face persistent institutional and regulatory challenges in optimising waqf whether in its traditional or hybrid form as an instrument of inclusive socioeconomic development. This study conducts a comparative qualitative content analysis of Scopus-indexed academic literature, official regulatory fatwas, and institutional policy documents published between 2020 and 2025. A PRISMA-guided screening protocol was applied to 642 initially identified records, yielding 24 core peer-reviewed studies and 13 regulatory and institutional sources for analysis. Five principal challenge clusters are identified: (1) regulatory fragmentation and jurisdictional dualism; (2) nazhir capacity deficiencies; (3) inadequate Islamic financial literacy on hybrid CWLS instruments; (4) governance and transparency deficits; and (5) structural misalignment between CWLS Shariah principles and conventional capital market frameworks. The findings confirm that CWLS and traditional waqf are complementary rather than substitutive instruments. Optimising both requires a systemic, ecosystem-level approach that integrates regulatory reform, nazhir professionalisation, digital innovation, and cross-border learning. This study advances a comparative institutional framework grounded in Waqf Core Principles and Ibn Khaldun-inspired ecological governance theory that is applicable to evidence-based waqf policy development in both countries
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