Abstract
This paper discusses how FinTech, financial services enhanced by high utilization of information and communication technologies (ICT), can enable potential capability of cash waqf, especially in the context of social finance. Waqf has played a role of social finance including earlier eras in the history of Islam. With the rapid progress of ICT and growing population of personal communication devices such as cell phones, smartphones, and computers, cash waqf will create huge social value when it is enhanced with ICT, which the author calls “FinTech-enabled cash waqf.” This is not just a conceptual dream, but it is becoming a reality. This paper also proposes possible expanded forms of FinTech-enabled cash waqf, including microfinance, as socially valuable financial systems. Required legal treatments and other necessary conditions are discussed as well from a practical point of view, including the purpose of being a reference for policy makers and social venture entrepreneurs. Academic considerations of the FinTech-enabled cash waqf are also argued, especially regarding a typical criticism against the current practice of Islamic finance from theory-based academic scholars. This process identifies the academic and religious significance of the FinTech-enabled cash waqf, not just as a social form of financial transactions. In the last section, the paper concludes that the FinTech-enabled cash waqf can contribute to socio-economic development in an Islamic community.
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Notes
- 1.
Kuroda (2017) argues that “It is not at all surprising that such new information technologies are expected to be utilized in various financial services, considering that the basic function of finance is information processing.”
- 2.
Accessed on September 18, 2017. The number includes the paper with the direct linkage of “FinTech” and “waqf”, and excludes one with just coexistence of the two words.
- 3.
Lajis (2017). This only refers to the “Islamic Fintech Alliance,” which is a group of Islamic FinTech companies in Malaysia, and again, provides no fundamental insights on Islamic FinTech itself.
- 4.
- 5.
This can include an organization (jiha).
- 6.
This includes cash, which is the main theme of this paper.
- 7.
See IFT (2016).
- 8.
See Venture Scanner (2016).
- 9.
- 10.
A more conceptual but comprehensive analysis of waqf’s potential is seen in Masyita (2005), although it does not refer to FinTech as it is somewhat an older work.
- 11.
In this paper, the definition of “Islamic Economists” is simply scholars that deal with economic issues in consideration of religious values of Islam.
- 12.
This appears as an opening remark of the second half in the Thunderbird International Business Review’s special edition on Islamic finance. The edition has Chapra (2007), and many other meaningful papers with critical views on the current practice of Islamic finance.
- 13.
The saying was cited from Chapra (1979).
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Yoshida, E. (2019). FinTech-Enabled Cash Waqf: Effective Intermediary of Social Finance. In: Ali, K., Hassan, M., Ali, A. (eds) Revitalization of Waqf for Socio-Economic Development, Volume I. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-18445-2_4
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DOI: https://doi.org/10.1007/978-3-030-18445-2_4
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