Governance and Regulatory Challenges in Developing a Sustainable Sukuk-Waqf Model in Malaysia: A Systematic Literature Review

Malaysia is widely recognised as a global leader in Islamic finance, particularly in the Sukuk market, whereas waqf development has risen and holds significant potential to support socio-economic development. Despite this, the integration of sukuk and waqf, often referred to as sukuk-waqf, remains largely conceptual in Malaysia. In contrast, countries like Indonesia have operationalised models such as Cash Waqf Linked Sukuk (CWLS). This gap suggests that structural, legal and governance challenges continue to hinder implementation in Malaysia. The key issues that hinder the possibility of practising sukuk-waqf in Malaysia stem from fragmented legal authority between federal regulators and state-level waqf institutions, a lack of governance capacity among waqf institutions to manage complex financial instruments, and uncertainty in Shariah structuring involving perpetual waqf assets and time-bound sukuk. Therefore, this paper employs the protocol of Systematic Literature Review (SLR) from the Scopus and Web of Science (WoS) databases to examine the governance and regulatory challenges affecting sukuk-waqf implementation in Malaysia, and suggests the development of a practical and sustainable Sukuk-Waqf model that is suitable in Malaysia context, through the presence of Cash Waqf Linked Sukuk as being practiced in Indonesia.

Cash Waqf-Linked Sukuk, Governance, Regulatory Challenges, Sukuk-Waqf model, Systematic Literature Review

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