Model of Sukuk Waqf with Wasiyyah Contract as a Cash Waqf Fundraising Strategy

This study aims to propose a model of sukuk-wasiyyah . Since waqf fundraising is one of the activities of waqf management, this model applies wasiyyah or the will of waqif to sukuk. Wasiyyah will restrict the use of the fund by the will of Musi while sukuk is one of the Islamic capital market instruments. Like cash waqf, the fund of sukuk-wasiyyah will be managed by nazhir and its profit can be spent on Islamic philanthropy. This study applies exploratory research. The result of the study shows that (1) Musi or the bequeath testator still can gain the sukuk return during his life, (2) After Musi died, the sukuk is transferred under custody by Nazir. The author argues that the proposed product applies to Waqf Institution. This study is the first to introduce the terms of sukuk- wasiyyah and to propose the mechanism of sukuk- wasiyyah in the Islamic capital market.


INTRODUCTION
The Islamic capital market development in Indonesia shows progressive milestones since the Islamic mutual fund was endorsed by the Indonesian Council of Ulama fatwa No. 20/DSN-MUI/IV/2001 regarding Guideline on Islamic Mutual Fund Investment and fatwa No.
32/DSN-MUI/IX/2002 regarding Islamic Bonds. The development of the three instruments namely Islamic stocks, sukuk, and Islamic mutual funds continues to improve although conventional instruments are still superior 1 . Regarding sukuk, the Financial Services Authority (FSA) or so-called Otoritas Jasa Keuangan (OJK) on 16 August 2021 published Islamic Bonds (Sukuk) Statistic as per July 2021 that disclosed the figure of outstanding corporate sukuk i.e IDR 34.2 trillion out of IDR 61.95 trillion sukuk issuance 2 . The Islamic mutual fund market share as of July 2021 was approx. 13.25% which is few if it is compared to that share of the conventional mutual funds 3 .
The demand for an investment fund from sukuk for financing infrastructure projects is still high as confirmed by the state budget figures for 2021. The infrastructure is budgeted at IDR 414 trillion which is 15.06% of total expenditures of IDR 2,747.5 trillion. Meanwhile, the total budgeted income is 1,776.4 trillion. It is reported that the annual growth rate of Indonesia's economy in 2021 is assumed at 4.5% -5.5% 4 . Since the population of middle-income people increased, the Islamic capital market has an opportunity to meet the need for infrastructure funding. A funding strategy should be proposed to encourage wealthy individuals and corporates to invest their funds more thru Islamic financial instruments like sukuk.
Among the strategies being discussed mostly is to improve financial literacy. OJK published statistics on the level of society's financial literacy in 2016-2019 with a highlight on the capital market. The level of public literacy in the capital market is still very low, resulting in low public participation in the capital market 5 . In the 2019 survey, the level of capital market literacy was 4.91% which is higher by 0.52% compared to that survey in 2016 which was 4.4%. It means the ratio of illiterate people on capital market issues is 95.09%. OJK also published that the percentage of financial inclusion in the capital market is 1.55% in 2019, meanwhile, such percentage was only 1.3% in 2016 6 . The literacy can be improved by a sustainable campaign to promote the program concerning the benefits of investment and changes in the Indonesian Islamic capital market involving content creators, public figures, and influencers on social media platforms by targeting those who interact with the internet particularly young people and millennials. Waqf Goes to Campus (WGC) is one of the waqf literacy programs initiated by the Indonesia Waqf Board that is held on several campuses in Indonesia to invite the academic community in advancing the world of Indonesian waqf. 5 Suparman Zen Kemu, "Literasi Pasar Modal Masyarakat Indonesia," Jurnal Kajian 21, no. 2 (May 21, 2017): 173, accessed January 6, 2021, https://jurnal.dpr.go.id/index.php/kajian /article/view/773. 6 OJK, "2019 National Financial Literacy and Inclusion Survey," last modified 2020, accessed January 5, 2021, https://www.ojk.go.id/id/berita-dankegiatan/publikasi/Pages/Survei-Nasional-Literasi-dan-Inklusi-Keuangan-2019.aspx.
The main motivation to invest is to expect a return on what they invest. Those who cannot manage their own business, they put their fund in banks or buy shares in the capital market. Before investing, investors should look at market conditions, and know more clearly about the Islamic capital market and its instruments. In choosing promising business prospects, potential investors must be able to see the various companies or industries that will be selected for investment 7 . Muslims' decision to save and invest should not only be inspired by gaining merely turnover but also be inspired by Allah's revelation in Chapter Al-Hasyr (18) investment are made in the framework of worshiping Allah to achieve inner and outer happiness in the world and the hereafter for both present and future generations, so it is not merely a worldly affair 8 . Therefore, Islam opens occasions to its believers to get rewards in both worldly life and hereafter life. These double rewards can be acquired by blending religious social missions and commercial business. People's awareness of Islamic philanthropy needs to be enhanced. The subject of Islamic philanthropy like waqf must become one of the topics of Friday sermons or lectures in mosques. Factors affecting people to invest are knowledge of the capital market, interest, and motivation. Therefore, sermons on philanthropy should be intensively repeated to encourage Muslims to make charity within their business that its reward is perpetually granted during and after their worldly life. Should investors be aware of charity benefits, they will make a declaration of waqf in form of cash and noncash. Religious affiliation influences the intention to leave a bequest 9 . A study in Malaysia that donated is limited to a maximum of 45%.
Also, the amount of investment benefit that may be donated as waqf is as much as onethird (1/3) of tirkah or the wealth, unless otherwise permitted by all heirs 12 . This product provides opportunities for a donor to donate within a planned period. Nonetheless, the waqf contract is still possibly canceled by either waqif or by Al-Azhar Waqf Institute, especially when the waqif has difficulty in paying the installment of the premium fund before maturity 13 .
To achieve the purpose of this study, the author applies exploratory research. Exploratory research is conducted for an unstudied problem, aimed at setting priorities, optimizing the final research design, and developing operational definitions 14  exploratory study aims to define or explain a concept that will be employed in the research, while the researcher still does not have a clear definition or concept 15 . Since the exploratory research relies on techniques such as reviewing available literature 16 , this study will explore the provisions of sukuk in the Islamic capital market, and wasiyyah in Islamic law, the advantages of applying wasiyyah to sukuk, the cash waqf, the mechanism of Islamic mutual fund, the parties involved in the implementation of sukuk-wasiyyah, and the proposed mechanism of sukuk-wasiyyah in the capital market. The result of this research confidently can bridge the need of investors who wants to get a return perpetually from their investment fund during their life, but at the same time after their death, they can donate a certain amount of their investment. So, the principal of his donation is still complete while its return will everlastingly yield.

RESULT AND DISCUSSION Sukuk, Wasiyyah, Waqf and Islamic Mutual Fund Sukuk
Referring to OJK Regulation No. 18/ POJK.04/2015 dated 3 November 2015, sukuk is defined as an Islamic commercial paper or certificate of ownership that has the Volume 11 Issue 1, April 2022 22| https://doi.org/10.36835/iqtishoduna.v11i1.895 same value or represents an undivided share or an undetermined portion of ownership (musya) on the underlying assets. Closure of the order and commencement of the use of funds according to their allocation 17 . Sukuk is the plural Arabic word of Sak which represents an investment certificate in line with Islamic principles 18 . The underlying assets must be real assets relating to certain investment activities or projects. A sukuk investor has a portion of the asset's ownership related to the investment even though this does not correspond to a liability owed to the issuer of sukuk.
Among the sharia indexes that are always observed by the investor, the level is Islamic mutual funds, Islamic stocks, and Islamic bonds (sukuk) which are an inseparable part of transactions in the capital market 19 . In the case of conventional bonds, on certain interest rates, dates, and amounts, the issuer is 17  The sukuk mechanism with the mudharabah scheme, in brief, is that the issuer will firstly issue sukuk to an investor for a certain project as an underlying asset. The investor pays his fund to the sukuk issuer. The investment fund is then used by the issuer to finance the project i.e. to improve production capacity and to purchase supporting facilities. During a certain period, the project generates income and its corresponding expenses are matched with revenues. The net income is then shared with the agreed percentage as stated in the sukuk certificate. Finally, on the due date, the issuer will repay the sukuk principal to the investor.
The aim of investors to invest in their fund is to gain profit as much as possible and to avoid the risk of loss. Nonetheless, not all investors can analyze the risks. Some investors expect a high return on high-risk financial instruments. Although sharia investment will not escape the risks, investors feel comfortable in investing because there is no element of usury, maysir (gambling), or gharar (uncertainty). The appropriate choice for gaining better returns compared to bank savings or time-deposit is the Islamic mutual fund. Indonesian Council of Ulama had issued a fatwa number: 20/DSN-MUI/IV/2001 on Guidelines for the Investments of Islamic Mutual Fund. In Article 1 (6), an Islamic http://journal.uinjkt.ac.id/index.php/stud ia-islamika/article/view/2408. mutual fund is operated according to the rules and Islamic law principles, in the form of a contract between the Investment Manager in the name of the capital owners and the investor, as well as the Investment Manager as a rep of the owners of capital by user investing. The difference between the conventional mutual fund and the Islamic one is in the operational implementation. The fatwa stated that the agreement between the investment manager and the investor is based on the wakalah contract. Wakalah means mandate or delegation.
Meanwhile, the financing scheme between the Investment Manager and the fund users is based on the mudharabah or ijarah system. In May  Ijarah contracts 23 . The characteristic of the mudharabah system is explained further in the above-mentioned fatwa in Chapter 2(2). The profit share between the investor who is represented by the fund manager and the fund user is distributed based on a certain percentage already agreed upon between the two parties. There is no guarantee of gaining profit perpetually being promised to investors. Investment managers acting as investor representatives do not bear any loss risk as far as such loss is not due to his negligence.
There are several types of mutual fund instruments with different risks and various returns on investment. The Islamic mutual fund operating in Indonesia Stock Market shows that the lower risk the mutual fund instrument has, the lower return it will gain. On the contrary, the higher risk it carries, the higher return it will generate. Sukuk is an ideal instrument for managing liquidity and mobilizing funds, and their Asset backing makes investment in sukuk more protected 24  analysis, sukuk provides a lower risk as well as a better benefit. However, in a short period, Islamic equity provides a higher return than sukuk 25 . Hence, innovative and creative sukuk structures are required to protect the sustainability of Islamic financial sources provided that they must follow the sharia principles 26 .
Some investors invest in Islamic mutual funds. The existing mechanism of the Islamic mutual fund is as follows: First, investors will come to the Investment Manager with his fund. And then, the investment manager will place the fund in an instrument as per the investors' request. The revenue gained will be shared with the agreed percentage between the investors and the investment manager. On the sukuk due date, the principal is repaid to the investors. 25  employee who has an Investment Manager Representative license and has work experience in the investment management sector for at least 3 (three) years 29 . Investment managers' abilities in-stock selection and market timing reduce the risk of loss due to investment analysis errors and positively affect mutual fund performance 30 .
In conventional bonds, the issuer must pay interest to the bondholders at certain rates, dates, and amounts. Meanwhile, under a sukuk structure, each of the sukuk investors has undivided possession of the underlying assets. Subsequently, sukuk holders are entitled to a share of sukuk assets income. A mutual fund contract is offered to investors first. Investors who want to invest will transfer their funds to the mutual fund account with the custodian bank. A certificate will be furnished to investors signifying their ownership in a unit of the mutual fund. The fund is then managed by the 29

Wasiyyah
Wasiyyah (bequest or the will) is a covenant to preserve something or to contribute some wealth after the death of the one who declares it 34  someone to others to look after his assets by his will after his life and therefore wasiyyah is executed after the death of someone who declares it 35 . Kompilasi Hukum Islam (KHI) or Islamic Law Compilation (ILC) in article 171 defines wasiyyah as an endowment from a testator to someone or institution that becomes valid upon the death of the testator. It is lawful to accept the bequest during the life or after the death of the testator. Likewise, the testator can abolish his bequest as long as he worries about the misuse of what he is bequeathing. Wasiyyah can also be in form of a message, advice, or direction which are not related to wealth 36 . Such a message wasiyyah must be executed.
Most scholars mention 4 elements of a bequest to become valid 37 , namely: (1) Musi or the testator who makes the bequest, (2) Musa lahu or the one whom the bequest is made for, (3) Musa bihi or the property to be taken as a bequest by Musa lahu, and (4) Shighat of the 35  statement either orally or in writing confirming the offer of the testator and the acceptance of the trustee. Aljzaary (2007) mentions two types of bequests, the first one is a bequest regarding what must be spent on a specific thing, and the second one is a bequest to someone who will render a right or payout debt, or take care of the children until they reach the age of adolescence. Making a will or bequest is a legitimate action as it is because of Allah's revelation as stated in Al-Quran Chapter Al-Maidah (106) and An-Nisa (011).
It is mandatory for anyone who has a trust or a debt to bequeath. This is because of the fear that he will pass away and lose someone's property and rights, so he will be asked (that is, responsible) on the Day of Judgement. Likewise, it is advised that someone who possesses a large number of assets and whose heirs are wealthy give a third or less of his property to his kinfolks who are not heirs or to any benefaction. The Messenger of Allah to Saad bin Abi Waqqas concerning whe will: "A third, and a third is a lot. Verily it is better if you leave your inheritors wealthy than if you leave them poor and with their palms out begging from the people" (Al-Bukhari and Muslim). Then, no matter the level of magnanimity, a Muslim is prohibited to donate exceeding onethird of his property and wealth, otherwise, he may leave his heirs in abject pennilessness which the Messenger of Allah warned against 38 .
It is conditional on the fact that a person who is asked in a will to take care of something must be Muslim, healthy of mind, and adult. For the sick person, the same conditions apply with the addition that he be rational, and the possessor of what he bequeath 39 . In ILC article 171(f), such a condition is also mentioned in addition to the minimum age that is not less than 21, sound in mind, and not under pressure (Article 194 (1)  will is abolished, and he will not have any right to it afterward. Article 199 (2) of ILC said that someone is allowed to reconsider his will or alter it whatever he wishes. Umar bin Khattab said: "Someone can change whatever he likes of his will." 42 The Prophet prohibited whoever bequeath more than a third of his wealth by his statement to Saad when he said, "Should I give two-thirds of my wealth away in charity?", The Prophet said: "No". Sa'ad then said, "Then half, O Messenger of Allah?". He replied: "No". Sa'ad said, "Then a third?" The Prophet replied: "Yes, A third, and a third is a lot. Verily it is better if you leave your inheritors wealthy than if you leave them poor and with their palms out begging from the people." (Al-Bukhari and Muslim). If a third does not cover all of the inheritances in the will, it must be divided equally among the different recipients, such as the distribution of the debtors. According to ILC Article 195, wills are only permitted up to a third of the inheritance except when all heirs consent. If the will exceeds one-third of the legacy, while some heirs disagree with it then the will is only executed to the extent of one-third of the inheritance 43 . Islamic law also prohibits bequeathing something to the heir, even if it is little unless the 42 Ibid. rest of the heirs agree to it after the death of the testator. 44 . The Messenger of Allah said: "Surely, Allah gave everyone who has a right what is owed to him. Therefore, there is no bequest to an heir. (At-Tirmidhi, who graded it Sahih.). This means the property can be given to those who are not entitled under the inheritance law 45 . However, the verse that establishes the condition "the will made without harming the heirs" indicates that wasiyyah is lawful only with the intention not to harm the heirs, even if it is not more than a third. Therefore, wasiyyah performed on foreigners to harm the heirs, as it is disagreeing with the aim of Islamic law, can be circumscribed by public authority 46  Al-Quran disallows implementation of the will unless the deceased's debts have been paid 47 . Ali says: "The Messenger of Allah ruled that the will is implemented after the debts (of the deceased) be paid." (At-Tirmidhi and there is a weakness in its narration chain. At-Tirmidhi said concerning it, "Verily the people of knowledge act according to it."). Paying off debt is mandatory, whereas a bequest is an act of donation, and mandatory things take priority over voluntary ones. If any debt arises after implementing the deceased's will, the one who received the bequest shall not be responsible for such debt. He did not realize it while ignoring it, nor did he neglect what he was held liable for. The will is valid if it is something unknown or nonexistent, it is a donation and an act of kindness. In case it is present, then that is good and the legacy takes place, and if it is not available then there is no harm. For example, a person makes a bequest from the offspring of his sheep or whatever the trees produce from him. If the inheritance is used up, wasiyyah is canceled, but if there is still any residue, then one-third of the remaining legacy can be used to carry out the wasiyyah of the heir 48 A person who receives a wasiyyah for specific purpose cannot use it for another purpose. This is because dealing with people's rights without their consent is invalid in Islam. If a person bequeaths a certain thing, the bequeather perishes, and the will becomes void, and (the testator) is not held accountable for replacing it with his other property. If one of his heirs issues a will, and some of the heirs allow the execution of the will, and some do not, then the part of the will they allowed will be executed. The part of those who do not allow such a legacy will not be executed. This is due to the Messenger of Allah's statement: "unless the other heirs wish so". Whoever writes a will without testifying, is allowed as long as it is not known that it was withdrawn, in which circumstance it would be annulled and not fulfilled. Wasiyyah is a means to provide assistance to people in need, strengthen friendship, and kinship who are not heirs 49 .

Cash Waqf
Waqf or endowment is a legal act of the donor or waqif to separate Ketika Harta Warisan Dipailitkan," Acta Comitas : Jurnal Hukum Kenotariatan 5, no. 1 (April 28, 2020): 66, accessed September 12, 2020, https://ojs.unud.ac.id/index.php/ActaCo mitas/article/view/57187. 49  part of their property to be used forever or for a specified time for religious or welfare purposes according to sharia. 50 . In the Arabic language, waqf means to confine, prevent, restrain, hold, prohibit, or detain 51 . Therefore, waqf cannot be sold, given away as a gift, or inherited. Its earnings should be spent on charity. Allah encouraged waqf by saying: "Except that you do kindness to those brothers" (QS 033:006). The Messenger of Allah said: "When a man dies, his actions are cut off, except for three things: a charity whose benefit is continuous, knowledge from which benefit continues to be reaped, or the supplication of a righteous child (for him)". (Muslim and the Sunan compilers, except for Ibn Majah).
Elkhatib mentions five elements to make a waqf valid namely the founder of the waqf, the nature of the property (which can be a movable or immovable property), the mutawalli or trustee, the beneficiaries, and the declaration of waqf. Waqif should be the owner of what he endows and be qualified to 50  make donations 52 . The qualifications of waqif namely adult (baligh), a free person (hurr), and capable of transferring the property ownership from himself to the ownership of Allah 53 . The statement is made in a written contract to avoid disagreement or misunderstanding in the future 54 . The role of the waqif becomes inactive once the endowment is handed over to Nazir 55 .
According to Aljzaary, making an endowment should be in clear wording, such as endowment, donation, or charity 56 . The gifted thing should exist even after using its buff among other buildings and lands. What does not exist after its uses like food, perfume and the like is not valid for a waqf. These are not called endowments; rather they are considered charity. 57 The term cash waqf is defined as the confinement of a sum of money by a founder(s), (institutions, corporations, individuals, or organizations private or public), and the dedication of its usufruct in timelessness to the prosperity of the 52 68 . Nowadays, sukuk issuance is linked to cash waqf. In general, the sukukbased waqf instrument is divided into two groups, namely sukuk linked waqf and waqf-linked Sukuk. Sukuk-linked waqf transactions are purely investment and commercial in nature, namely in the form of sukuk issued by business corporations or issuers whose use is to build commercial assets on waqf land, or are related to waqf projects. As for the waqf linked Sukuk, the basic transaction is cash waqf which is used to build social assets. Sukuk linked waqf can be temporary with a minimum term of 5 years or permanent.
The source of repayment, if it is temporary, can be from waqf crowdfunding or the government budget (if the project being built coincides with a government project that has been scheduled in the Government Budget 69 . Sukuk-based waqf is an innovation in empowering the many unproductive waqf assets in Indonesia. 70  Indonesian Waqf Board (BWI) in the future will not focus too much on asset management, but rather on productive waqf assets, namely cash waqf link sukuk. It must be appreciated because if BWI collects community waqf money and then invest it in sukuk, it is relatively safe. The Sukuk return will be given to the beneficiaries 71 .
The placement of cash waqf in Sukuk is in line with Waqf Core Principle (WCP). WCP suggests that cash waqf should immediately be distributed appropriately. The Nazir invests the collected cash waqf in various investment portfolios like the funds in Islamic (non-interest) financial institutions and/or Islamic financial products in both domestic and overseas banks 72 .

The Concept of Sukuk-Wasiyyah
The term sukuk-wasiyyah is named by the author as the combination of two words i.e. sukuk and wasiyyah. Sukuk in this term is a sukuk-linked waqf that is purely investment and commercial in nature, namely in the form of sukuk issued by business corporations or issuers whose use is to build commercial assets on waqf land, or are related to waqf projects, and to optimize the benefits of waqf assets and/or returns for the public interest (mashalih 'ammah) which are not contradictory with sharia principles 73 . Sukuk-waqf is regarded as an alternative tool to mobilize funds from Muslim societies sustainably and regularly. It combines Sukuk flexibility and endowment sustainability 74 .
Wasiyyah is an endowment from a testator to someone or institution that becomes valid upon the deaths of the testators 75 , thus, before the death of Musi, the sukukwasiyyah fund is still possessed by Musi, and accordingly the sukuk benefit is still paid to him. Since wasiyyah is executed after the death of someone who declares it 76 , sukukwasiyyah contract comes into force soon after the death of Musi. 73

The Elements of Sukuk-Wasiyyah Contract
Referring to the abovementioned definition and conditions of these two words, the author proposes compulsory elements of sukuk-wasiyyah (so-called rukun sukuk wasiyat) as follows: 1. Musi or testator who acts at the same time as waqif or donor that donates his property. In the capital market, Musi is the investor. 2. Musa lahu or the recipient of wasiyyah who is trusted to manage the property and preferably a waqf institution or Nazir (the mutawalli). 3. An investment manager with functions that are stated in OJK Regulation No. 24/POJK04/2014 regarding the Guideline of Investment Manager Functions. The stated functions do not depict investment manager duty as Nazir or Musa lahu. Therefore, there must be separate entities acting as Musa Lahu or Nazir. Such segregation of duty will improve the supervisory function in the sukuk-wasiyyah mechanism. 4. Witnesses, especially the relatives of Musi like the spouse and children. Non-relatives are preferred to become witnesses to conform with Chapter Al-Baqarah verse 282. 5. Musa bihi or mauquf i.e. the donated fund in form of sukuk. It can be a certain percentage of intact sukuk or a split one separated from the original principal. 6. Shigat or a statement of Musi.
The sukuk-wasiyyah contract is signed on a notarial deed. 7. Mauquf 'alaihi or the beneficiaries of sukuk-wasiyyah return.

The Mechanism of Sukuk-Wasiyyah
The proposed mechanism of sukuk-wasiyyah is illustrated in the diagram below: The above diagram describes as follows: Step 1 Declaration sukuk-wasiyyah contract. All parties are requested to sign the sukuk-wasiyyah contract before the notary.
Step 2 The existing mechanism is still applicable and Musi still gets the profit of sukuk during his life.
Step 3 When Musi dies, the sukukwasiyyah contract is executed. The sukuk waqf is under the trusteeship of Nazir.
Step 4 Nazir distributes the benefit of Sukuk waqf to Mauquf Alaihi (beneficiaries). The role of a notary is to notarize the will, which provides the best mechanism and option for the management of estates, especially the succession by will accordingly. This will serve as useful information for stakeholders and especially the Muslim community about the importance of documenting a will to protect its beneficiaries. 77 Referring to the product of wasiyyah and cash waqf in the form of the endowment of insurance benefit. and investment benefits in sharia life insurance, the which Indonesian Council of Ulama endorsed by issuing fatwa No. 106/DSN-MUI/X/2016 stating that the number of insurance benefits to be donated is limited to a maximum of 45% and the amount of investment benefit that may be donated as waqf is as much as onethird (1/3) of tirkah or the property unless otherwise permitted by all heirs 78 , the author suggests that this model needs further endorsement by the Council of Ulama particularly in case of Musi still has outstanding debts and other obligations that must be paid out. In turn, this wasiyyah is executed after confirming that all debts have been paid and the amount of the will does not exceed a third. 77