Top-Down or Bottom-Up? Choosing the Best Path of Management for Waqf-Takaful Death Compensation Product in Malaysia

Abstract

In Malaysia, the integration of waqf and takaful for death compensation products aims to enhance financial protection within the Islamic finance framework. However, the effectiveness of this integration is influenced by the management approach adopted, either top-down or bottom-up. The top-down approach, driven by high-level government entities such as Bank Negara Malaysia (BNM) and the Ministry of Finance (MOF), promises streamlined processes and uniformity. Conversely, the bottom-up approach involves grassroots-level engagement through individual takaful agents, which emphasizes personalized interactions and alignment with local needs. Despite these theoretical benefits, there is a lack of empirical evidence assessing the practical impact of these approaches on key dimensions such as participant engagement, compliance with Islamic law, implementation speed, and institutional support. This study seeks to address this gap by applying a qualitative research design, including in-depth interviews with experts and comparative analysis methods, to evaluate the advantages and limitations of each approach. The goal is to provide actionable insights for policymakers and practitioners to optimize management strategies and improve the effectiveness and relevance of waqf-takaful death compensation products in Malaysia.