Strengthening The Role of Zakat as Islamic Social Finance Instrument Irfan Syauqi Beik Director, Center of Islamic Business and Economic Studies (CIBEST), Bogor Agricultural University, Indonesia Bogor, May 14, 2016

Anatomy of Islamic Finance BMT , Awqaf and Social Side of ISC Islamic Commercal Finance (ISC) Islamic Social Finance (ISF) : Zakat and Charity

Current Performance of Zakat System: A Case of Indonesia

Table 1. National Zakat Collection (2002-2014) Year Total Amount of Zakat (Billion Rupiah) Annual Growth (%) 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 68.39 (USD 6.84 m) 85.28 (USD 8.53 m) 150.09 (USD 15.01 m) 295.52 (USD 29.56 m) 373.17 (USD 37.32 m) 740.00 (USD 74.00 m) 920.00 (USD 92.00 m) 1,200.00 (USD 120.00 m) 1,500.00 (USD 150.00 m) 1,800.00 (USD 180.00 m) 2,200.00 (USD 220.00 m) 2,700.00 (USD 270.00 m) 3,300.00 (USD 330.00 m) - 24.70 76.00 96.90 26.28 98.30 24.32 30.43 25.00 20.00 22.22 22.72 Source: BAZNAS (2014)

Table 2. Zakat Potential in Indonesia No Variable Zakat Potential (trillion rupiah) Percentage of GDP 1 Individual (household) zakat potential 82.7 1.3 2 Zakat of industry consists of: Corporate zakat Zakat of state-own companies (BUMN) Total 114.89 2.4 117.29 1.84 3 Zakat potential of outstanding private deposits in commercial and rural banks and deposits in Islamic banks 17.01 0.27 TOTAL 217 (USD 22 billion) 3.4 Source: BAZNAS and FEM IPB (2011)

Zakat is distributed to around 3.8 million beneficiaries (2014) Distribution of Zakat Zakat is distributed to around 3.8 million beneficiaries (2014) 35% of zakat fund is distributed for productive-based programs 65% of zakat fund is allocated for education, health and consumptive-based programs

Example of the Program: Zakat-based Community Development

Example of the Program: Zakat-based Community Development

Socialization and Synergy Institutional Enhancement The Way Forward Regulatory Support Socialization and Synergy Institutional Enhancement

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