More banks should consider waqf funding to improve affordable housing ownership by collaborating with stakeholders, says International Centre for Education in Islamic Finance (INCEIF) chief executive officer Prof Dr Azmi Omar.
2 April, KUALA LUMPUR – He said waqf, while already being used as a form of financing the property sector, tended to focus on commercial properties and the middle to high-end properties.
“Maybe the term ‘affordable housing’ is a stigma, but name-wise is a separate issue. More importantly, the whole idea of a waqf fund is to create permanency, he said during a panel session discussing Islamic housing finance at an affordable housing conference here today.
He said that the permanent nature of the waqf fund would benefit the public as they would be able to reap continuous returns.
He pointed out the possibility of creating a cash waqf fund, whereby individuals could pool into that fund which would then be used to develop a property.
Azmi said this could transpire as the cost of land was almost free, hence leading to reduced cost of financing and construction.
While the properties developed under the waqf fund are being leased, it could BE done under a long-term arrangement.
Houses built on waqf arrangement may be sold at affordable pricing, with part of proceeds being funnelled to other philanthropic activities, he said.