1. Jeddah, 21 December 2017 / 3 Rabiul Tsani 1439
Tapping the Potential of Zakat and Other Forms of Islamic Finance to Achieve the SDGs in Indonesia
Francine Pickup, Irfan Syauqi Beik, Mohamad Ikhsan Modjo, Greget Kalla Buana
Jeddah, 21 December 2017 / 3 Rabiul Tsani 1439

2. Introduction: SDGs and Maqasid Al-Shariah (1)
No.
SDGs
Dominant Maqashid
Level of Needs 1
No Poverty
Wealth
Daruriyah 2
Zero Hunger
Life, Wealth 3
Good Health and Well Being 4
Quality Education
Intellectual 5
Gender Equality
Wealth, Intellectual, Life, Lineage 6
Clean Water and Sanitation
Life, Lineage 7
Affordable and Clean Energy
Lineage
Hajiyah 8
Decent Work and Economic Growth 9
Industry, Innovation and Infrastructure

3. Introduction: SDGs and Maqasid Al-Shariah (2)
No.
SDGs
Dominant Maqasid
Level of Needs 10
Reduced Inequalities
Wealth
Daruriyah 11
Sustainable Cities and Communities
Lineage, Life, Wealth
Hajiyah 12
Responsible Consumption and Production
Lineage, Life 13
Climate Action
Lineage, Intellectual 14
Life Below Water
Lineage, Wealth, Intellectual 15
Life on Land
Lineage 16
Peace, Justice and Strong Institutions
Life, Wealth, Lineage 17
Partnership for the Goals
Wealth, Intellectual

4. Zakat Potential in IndonesiaNo
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
2.40
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

5. Collection of Zakat, Infaq and Sadaqa in Indonesia
Year
IDR (billion)
USD (million)
Growth (%)
GDP Growth (%)
2002
68.39
4.98 -
3.7
2003
85.28
6.21
24.70
4.1
2004
150.09
10.92
76.00
5.1
2005
295.52
21.51
96.90
5.7
2006
373.17
27.16
26.28
5.5
2007
740
53.86
98.30
6.3
2008
920
66.96
24.32
6.2
2009
1200
87.34
30.43
4.9
2010
1500
109.17
25.00
6.1
2011
1729
125.84
15.30
6.5
2012
2200
160.12
27.24
6.23
2013
2700
196.51
22.73
5.78
2014
3300
240.17
22.22
5.02
2015
3700
269.29
12.21
4.79
2016
5000
363.90
35.14
Source: BAZNAS (2017)

6. Zakat Allocation Based On Program
Source: BAZNAS (2017)

7. Zakat Allocation Based On Asnaf
Source: BAZNAS (2017)

8. Studies on Zakat Impact (1)
Survey on 13 Districts throughout Indonesia and involve 2,656 respondents of mustahik No
Monthly Income
Before Programme (Rp)
After Programme (Rp)
Impact (%) 1
Bandung Barat
1,678,791
2,059,585
22.68 2
Bantul
1,998,558
2,550,077
27.60 3
Tabanan
3,894,061
4,626,192
18.80 4
Sumedang
371,605
814,553
119.20 5
Sukabumi
3,516,859
4,237,977
20.50 6
Gresik
1,754,850
2,103,600
19.87 7
Semarang
2,188,077
2,882,885
31.75 8
Aceh
7,494,553
8,043,250
7.32 9
Nusa Tenggara Barat
4,464,753
4,964,753
11.00 10
Kutai Timur
2,471,800
3,948,828
60.00 11
Gorontalo
1,614,286
1,731,429
7.00 12
Sijunjung
1,590,333
2,014,917
27.00 13
Siak
1,551,482
2,030,648
31.00
Average
2,660,770
3,231,438
Source: BAZNAS (2016)

9. Studies on Zakat Impact (2)
Survey on 13 Districts throughout Indonesia and involve 2,656 respondents of mustahik
Average Spiritual Score
Before Programme
After Programme
3.84
4.21
Source: BAZNAS (2016)
Notes: This is measured by using CIBEST Model

10. Studies on Zakat Impact (3)
Survey on 13 Districts throughout Indonesia and involve 2,656 respondents of mustahik No
CIBEST Index
Index Value
Before Programme
After Programme
Percentage Change 1
Welfare Index (W)
0.63
0.73
15.87% 2
Material Poverty Index (Pm)
0.27
0.26
-3.70% 3
Spiritual Poverty Index (Ps)
0.04
0.01
-75.00% 4
Absolute Poverty Index (Pa)
0.06
0.00 %
Source: BAZNAS (2016)
Notes: This is measured by using CIBEST Model

11. Challenges to Zakat as a Poverty Prevention Measure
Low awareness of the needs to pay zakat
Muzakkis’ continuing desire to have a direct connection with those to whom they are donating  resulting in deep wariness with regard to channelling funds through zakat institutions
Expanding access to the unbanked segment of the population
Aligning zakat and the SDGs

12. Other Potential Instrument of Islamic Finance
Potential Islamic Financial Instrument to Achieve SDGs
Islamic Microfinance: BMT
Sukuk
Waqf

13. BMT Growth in Indonesia (2007 – 2014)No
Province
BMT
Number of Poor
2007
2014 1
Sumatera Utara 4 2
401
274 5
263
102 3
Sumatera Selatan
288
192
Lampung
285
191
Kep.Bangka Belitung 13 8 6
DKI Jakarta
318
144 7
Jawa Barat 19
1334
557
Jawa Tengah 21 27
1077
746 9
DI Yogyakarta
471
335 10
Jawa Timur
1321
719 11
Banten
245
133 12
Bali
297
Nusa Tenggara Barat
641
315 14
Kalimantan Selatan
171 15
Sulawesi Selatan
340
204 16
Sulawesi Barat
Source: Indonesia Family Life Survey (2017)

14. Waqf Potential Waqf Land: 4,300 sq.km. in 435,768 locations, and
with a value of Rp 370 trillion (US$27 billion) based on Bank Indonesia identification
Cash Waqf:
- Potential reaches Rp 120 trillion (US$ 8.76 billion) per annum

15. The Role of UNDP Indonesia
Signing MoU and MoA with BAZNAS (The National Zakat Board of the Republic of Indonesia)  pilot project in Jambi Province
Help zakat organizations target the communities and households in greatest need, identifying key vulnerabilities and how to overcome them
Support key potential innovation in optimizing zakat and other Islamic social finance instruments
Enhance sustainability of Islamic microfinance
Extending cooperation with the Indonesian Waqf Board to optimize waqf potential

16. Thank You Contact Person:
Dr Irfan Syauqi Beik (Director, BAZNAS Center of Strategic Studies)
Dr Mohamad Ikhsan Modjo (Technical Advisor of UNDP – Indonesia)