Cash waqfs as a fund collection instrument for Turkey

Abstract

One of the biggest problems of the modern era for developing countries is that they are not able to develop/grow with their own insufficient savings. The developing countries generally use the savings of developed countries for development and pay interest to developed countries for the loan. Therefore, the development gap between the developing countries, which need savings for development, and the developed countries, which have very large interest income, is not closed. In order to overcome this development gap, especially the labor force (overpopulation) and low labor cost methods are being tried. These methods only straighten the general economy in terms of growth not development and the developing countries cannot make a serious breakthrough in total welfare of people. The majority of Islamic countries are in the category of developing countries. In other words, the Islamic countries also need capital for new investments. For this reason, it is important to establish funds that will be managed according to the procedures accepted in Islamic fiqh, which will provide capital accumulation and resources for Islamic countries. In this study, the proposal of the Cash Waqf Fund (CWF), which can be used for Islamic countries as a financial instrument for development, will be examined. Unlike real estate waqfs, the entire or some part of capital consists of cash money at CWs. The CWs became quite widespread during the Ottoman period. The main priority of these institutions was charity. On the other hand, the funding needs of entrepreneurs in the market were provided by CWs. Another feature of CWs is that they are the pioneers of Islamic financial institutions with their operation methods for cash. The CWs, which lent money to the entrepreneurs through Islamic financial methods, spent the income of this money for the purposes of the waqf. In this way, while the continuity of the charity activities, the market’s need for cash was provided. Thanks to the CWs, the financial institutions of capitalism, like the banks, could not enter the Ottoman geography for many years. In this study, a fund proposal for Turkey in the implementation of the CWs, will be presented.