The application of waqf features in Islamic finance products have shown that it can deliver the desired social impacts, while at the same time generating reasonable returns with a greater sense of purpose, he said.

“It is estimated that the global value of waqf assets range from US$100 billion (RM448 billion) to US$1 trillion (RM4.48 trillion).

“This makes Islamic social finance a potential source of funding to address the sustainability funding gap, which is estimated at more than US$1.7 trillion (RM7.61 trillion) annually,” Awang said.

Waqf is a concept in Islamic tradition that refers to the act of dedicating a property or a sum of money to be used for a specific charitable or religious purpose for perpetuity.

Its purpose is typically to benefit the community, such as supporting schools, hospitals, mosques, or helping the poor and needy.

In Malaysia, waqf assets are estimated to be worth more than RM1.3 trillion, said Awang at today’s two-day waqf and Islamic capital market conference.

However, he said only 13% or about 30,000ha of waqf land in the country has been developed, according to data from Yayasan Waqaf Malaysia and the wakaf, zakat and haji department in the Prime Minister’s Department.

Awang said this low utilisation rate reveals waqf’s tremendous untapped potential to catalyse socio-economic development, whilst broadening investment opportunities for those seeking to invest in waqf-linked instruments or products.

“There is plenty of room for waqf to grow,” Awang said, adding that there are also a wide range of Islamic capital market instruments that can support sustainability financing.

“In order to optimise the use of these instruments, we need to bring all stakeholders together to work towards a common goal, which is to put Islamic social finance high on the national agenda, in step with the growing global focus on social finance and ESG (environmental, social and governance) financing,” Awang said.