Cash Waqfs and Commercial Capital: Evidence from Ottoman-Venetian Trade (16th Century)

Abstract

This article offers new evidence on commercial financing in the early modern Ottoman Empire. It examines the little-known role of cash waqfs (nukud-ı mevkufe), Islamic trusts, in supporting Ottoman trade with Europe in the sixteenth century. Most of scholarship on cash waqfs considers this institution exclusively as a provider of micro-credit to consumers because the Islamic legal framework allegedly hindered capital accumulation from this institution. By focusing on the cash waqfs of Sarajevo in Ottoman-Venetian trade in the Adriatic Sea in the 1580s, I demonstrate that this institution could also operate as a source of commercial capital supporting large-scale business ventures. I argue that this was the case in Sarajevo because of the absence of other major capital providers in that city and of the specific role played by local artisanal associations (esnaf) in the foundation and administration of these endowments as well as in the conduct of international trade. These findings for Sarajevo are another demonstration of the operational diversity and flexibility of Islamic credit institutions in the pre-modern period.