The experience of Awqaf New Zealand in developing the jurisprudence and application of temporary cash Waqf—and its connection to the proceedings of a specialised international jurisprudential forum on waqf—the highest jurisprudential authority for Waqf rulings in the Islamic world.
A question frequently echoes through the corridors of Islamic finance institutions that has yet to receive a fully sufficient jurisprudential answer: What is the real difference between temporary cash Waqf and an interest-free good loan (Qard Hasan)? And why do we not simply settle for a Qard Hasan fund directly instead of a temporary cash Waqf fund designated for interest-free lending? The experience of Awqaf New Zealand over more than a decade provides the most lucid, practical answer to this question.
A waqf is an endowment: something set aside so that the benefit it produces goes to others. Traditionally it was land or a building. A cash waqf sets aside money instead — and it comes in two forms.
| Temporary cash waqf | Perpetual cash waqf | |
|---|---|---|
| Duration | A fixed period, stated at the outset | Indefinite |
| The money itself | Returns to the giver at the end of the period | Never returns |
| Purpose — lending or investment | Must be chosen at the outset, and the two may not be mixed, because the obligations on the giver differ according to which was chosen | Better left unspecified, so the trustee may lend when there are borrowers and invest when there are none |
| What is given away | The use, or the returns — in whole or in part — on the conditions set by the giver or the waqf institution | |
The difference is not the amount, and not the purpose. It is whether the money comes back.
These definitions are Awqaf New Zealand's own proposed formulation, published to open discussion. They are not a ruling and are not presented as settled jurisprudence — settling the definition is what every subsequent ruling is built upon.
In 2018, a fundamental jurisprudential dilemma was discovered that profoundly impacts the drafting of Waqf financing contracts, highlighting the necessity of distinguishing between temporary cash Waqf and Qard Hasan when building Waqf-based financial products.
On the surface, both contracts appear identical: each involves providing capital for a specified period and subsequently returning its equivalent. This superficial resemblance led some to question the utility of separating them. However, the science of jurisprudential distinctions unveils a profound structural divergence:
| Point of Comparison | Temporary Cash Waqf | Interest-Free Loan (Qard Hasan) |
|---|---|---|
| Nature of Contract | A donation of usufruct while the principal remains intact. | A transfer of ownership of capital with an obligation to return its equivalent. |
| Ownership of the Asset | Remains with the founder (Waqif), and does not transfer to the borrower. | Transfers fully to the borrower upon receipt. |
| Financial Liability | The amount is not a debt tied to the personal liability of the manager or borrower. | The amount is an obligatory debt resting on the borrower's liability. |
| Yield and Profits | Distributed to beneficiaries according to the founder's stipulations. | Any conditional excess is strictly prohibited usury (Riba). |
| Intent & Spiritual Impact | A continuous charity (Sadakah Jariyah) tied to the asset itself. | Spiritual reward for lending without financial gain. |
| Documentation & Guarantee | An independent Waqf deed, legally enforceable in court. | A bilateral debt agreement between two parties. |
| Impact of Death | The Waqf is not inherited; it continues serving the beneficiaries. | The debt transfers to the heirs as an obligation or claim. |
| Zakat Obligation | Zakat ruling varies depending on the allocation of the capital. | Paid by the borrower if it meets conditions and a lunar year passes. |
Awqaf New Zealand is designed to link temporary cash capital pools to agribusiness properties. These commercial assets are planned to manage risk and balance seasonal peaks through an integrated, multi-country roadmap: