JAKARTA - The Islamic Development
Bank (IsDB) Group and Indonesia's National Zakat Management Agency (BAZNAS) are
working together to integrate zakat with a number of Community-Driven
Development programs (CDD) in the Southeast Asian country.
The multilateral lender and
its member organisation for poverty alleviation, the Islamic Solidarity Fund
for Development (ISFD), will provide a grant for technical assistance of
$515,000 to support a pilot project worth $745,000. BAZNAS will add $230,000 as
the agency that will manage and implement the project.
The program aims to make the
best out of the potential of zakat, infaq, sadaqah and other Islamic social
funds, motivating people to become part of an active development network, said
IsDB Group President Dr. Bandar Hajjar during a webinar on Nov 5.
This is in line with the
IsDB President's Five Year Program (P5P) and a new business model to create
partnerships and transform the organisation.
“In particular, the P5P's
goal is to make the IsDB more competitive and responsive to the needs of its
member countries. This program also aims to make IsDB the partner of choice in
overcoming development challenges by achieving six main pillars, which are
awareness, linkages, competence, funding, delivery and strengthening,” said the
IsDB Group President.
The technical assistance
project aims to develop a model for increasing zakat collection and effectively
channel and maintain a sustainable flow of funds to support the success of the
Community Driven Development program at the national level. This is expected to
improve livelihoods and reduce the level of poverty at the lowest quantile.
In addition to the CDD
program, some of the funds will also be allocated for COVID-19 countermeasures.
The program will work towards improving the quality of health and environmental
hygiene through a hand-washing movement that covers 78 schools with 19,000
students as beneficiaries. The program will also provide economic recovery
support for 35 micro entrepreneurs of retail kiosks that fall under BAZNAS’ assistance.
The head of BAZNAS, Prof.
Dr. Bambang Sudibyo, said the program will help the poor, who are the most
affected by COVID-19 not just in terms of health and healthcare but also
because many of them have lost their jobs and incomes as a result of the economic
downturn caused by the pandemic.
This latest collaboration
extends the partnership between IsDB and BAZNAS, that have been working
together for more than ten years, Prof. Dr. Bambang added.
Zakat is the third pillar of
Islam and a key social finance instrument in the Islamic economy, especially to
address poverty. However, the global consensus is that its full potential is
still unrealized. In Indonesia, the potential amount of zakat is 3.4% of total
GDP, or nearly 462 trillion rupiah ($31 billion) if the collection is applied
to each individual and corporation, based on the 2019 Indonesian Zakat Outlook
by BAZNAS. Actual zakat collected in 2019 was 10.22 trillion rupiah.