Waqf as a Socially Responsible Investment Instrument: A case for Western countries

Abstract — In light of the progression of Islamic finance in non-Muslim countries and the design of innovative financial products, the next frontier for Islamic finance is to attract customers and investors from beliefs other than Islam. This paper examines and discusses the case of a specific Islamic contract, Waqf and highlights its possible use as a (Socially Responsible Investment) SRI offering which is not only attractive to the non-Muslim investor, but also in-line with the actual spirit of Islamic teachings. The methodology is an examination of the Waqf contract through different sources of Islamic law as well as an evaluation of mainstream secondary literature on the link of corporate social responsibility and investor prospection in Non-Muslim countries. The ultimate result is a proposed viable Waqf product which is in-line with the spirit of Islamic teachings and can be an attractive proposition to the socially conscious investor