The Role of Zakat as Financial
Safety Net Instrument in
Indonesia
Presented by:
Dr. Ahmad Mukhlis Yusuf
The National Board of Zakat (BAZNAS) of
Indonesia
Financial Safety Net
• Usually comprises the deposit insurance function, prudential regulation and supervision, and the lender-of-last-resort function
• Central Bank’s definition: The Financial System Safety Net (FSSN) provides the underlying framework for the deposit insurance scheme and the emergency financial facility under the central bank's lender of last resort function
Zakat-based Financial Safety Net (1)
Unlike Central Bank’s definition, zakat-based system financial safety net is aimed at facilitating the poor and the needy a wide access to financial resources that come from zakat and other social fund, such as infaq and cash waqf.
Zakat-based Financial Safety Net (2)
The role of zakat as instrument of financial safety net can be conducted through economically productive-based zakat programs
7 Major Zakat Distribution Programs
1. Mustahiq Service Center
2. Zakat-based Comunity Development
(productive program)
3. Healthy Home of Indonesia
4. Smart House for Children of the Nation
5. Bayt al Ma’mur BAZNAS (productive
program)
6. House of Da’wah BAZNAS
7. Natural Disaster Emergency Response
Program Implementation
• Collaborative program between Central BAZNAS, Provincial BAZNAS and City/Regency BAZNAS
• Collaboration and alignment with
other parties such as university
(e.g. The case of TAZKIA)
1. ZAKAT-BASED COMMUNITY DEVELOPMENT (ZCD)
ZCD is a program that is designed to
empower the community and to
increase their welfare level through
comprehensive and integrated
development approach
CommunityDevelopment
Benefit
Sustainability Participatory
Synergy
Stimulus using
zakat
Basic Principles of ZCD
Program Approach
Geographical Approach
Specific Group
Approach
Local Problem
Approach
ZCD based on Geographical Approach
ZCD based on Local Problem Approach
Program Strategy
ZCD Profile
• Motivation
• Trust
Awareness
• Skill
• Knowledge
• Attitude
Skill Upgrade• Problem solving
through active participation
• Core competence
Empowerment
Geographical Distribution of ZCD Program 2013
https://mapsengine.google.com/map/edit?authuser=0&hl=en&mid=z2hnGqzAFLYU.k_VG96B_ONZw
ZCD Pilot Projects
ZCD in Desa Candikuning, Bali (Strawberry farmer)i)
ZCD in Dusun Srunggo, Yogyakarta
ZCD in Desa Srimartani, Piyungan,Bantul, Yogyakarta (System Of Rice Intensification)
ZCD in Kab. Berau, Kalimantan Timur (Pipeline building) ZCD in Pulau Kera, Kab.Kupang, Prov.NTT
2. Bayt Al Ma’mur (Welfare House) BAZNAS
Bayt al Ma’mur BAZNAS
Definition
• Empowerment program of BAZNAS to increase welfare level of mustahik through qard al hasan financing, financial assistance, and supervision so that independent and productive personality of mustahik can be achieved
Vision• To Develop and Increase Welfare Level of Mustahik
Mission
• Economic empowerment aiming at realization of Prosper Indonesia
• To facilitate micro business of mustahik a wide access of financial resources
• To release mustahik from loan shark
• To develop Islamic values in the economy
OBJECTIVES
• Professional empowerment institution
• Facilitator of capital assistance
• Transforming mustahik to become munfiq
• Increasing income and independency of mustahik
• To increase business practices based on mu’amalah principles
• To reduce the impact of loan shark
TARGET
• Jabodetabek (Greater Jakarta) as pilot project in 2013
• Empowering at least 3000 mustahik per annum
• Replication of Bayt al Ma’mur BAZNAS in all parts of the country
• Optimization of zakat distribution at least 70%
TIPOLOGY OF DISTRIBUTION AND EMPOWERMENT PROGRAMS
PERSONAL
3000 Mustahik
COMMUNITY
• 5 communities
• Trader
• Farmer
• Animal breeder
• Fisherman
• Crafter
GEOGRAPHICAL AREA
• 9 areas
• Bekasi (2)
• Bogor (2)
• Depok (1)
• Jakarta (1)
• Tangerang (3)
BAYT AL MA’MUR BAZNAS
What is the next agenda after this conference?
• Sharing experiences on funding, programs, governance.
• Common platforms for sharing best practices, capacity building. Etc.
• Networking by using digital media and forum
• Etc..
Islamic Micro Finance,
A Case of Tazkia, Aligned with
Baznas Welfare House
Program
Shadaqah/CharityShadaqah/CharityPinjam/Credit
Shadaqah/CharityPinjam/CreditPembiayaan/
Financing
Shadaqah/CharityPinjam/Credit
Mena
bung/
Savin
g
Pembiayaan/
Financing
Shadaqah/
Charity
Micro
financeSaving
Commercial
Financing
Risk Protection/
Social Security
Poverty Eradication through Micro Finance,
Micro Trust Fund and Micro Insurance
Islamic Financial Institution for
the Economic Empowerment
Shadaqah/
Charity
Islamic
Micro
Finance
SavingCommercial
Financing
Risk Protection/
Social Security
Economic Wellbeing
of SMEs
BAYTUL
MAAL
BAYTUT
TA’MIN
BAYTUT-TAMWIL
LKM, BMT, BPRS
Center meeting/Majlis
Community
Micro Fin
Initiatives
(LKM)
The Poorest of the
Poor
The Economically
Active Poor
ISLAMIC
COOPERATIVE
(BMT)
member
Senior member
motiva
tor
pcag
pag
Small Business
Enterprises
Islamic Rural
Bank
(BPRS)
Member/
customers
ECONOMIC EMPOWERMENT STRATEGY
FOR LOW INCOME SOCIETY
Community ABC
Urban poor/village
needy/small and micro
enterprises
BAYTUT
TA’MIN
BAYTUL
MAAL ABC
BAYTUT
TAMWIL
ABC
LKMK
BM
local
KBMT
BPRS
Membership saving
Regular saving
Voluntary saving
Zakat
Infaq
Shadaqah
grant, education,
institutional/capacity building,
soft loan
Deposit, and dedicated
financing
city/small
town/village
life, health,
general,
pension, etc
TAZKIA
Micro
finance
IKAH Tazkia
DBS
BM Muamalat
BNI Syariah
ESQ 165
PEMDA DKI
SUCOFINDO
LKM Al-Hilal
KOSPIN JASA
Pekalongan
LKM Komunitas Tasik
Malaya
BMTs BogorKoperasi Syariah
Iktiar PERAMU
267
KJK-PEMK DKI
BPRS’
SB Foundation
TAKAFUL MIKRO
FIELD
LABORATORY
(campus –village
synergy)
BTTM Kop. Civitas Academica
PT PNM
Qatar Charity
37