Waqf has long been the backbone of community service in Indonesia, especially in the fields of religion and education. Considering the importance of waqf in the socio-economic field in Indonesia, the scope of waqf has been widened from originally only in the form of fixed assets to later includes movable assets such as cash. As a country with the largest Muslim population in the world, Indonesia has a huge potential to develop cash waqf. However, this potential has not been able to be optimized mainly due to the lack of awareness among the Muslims in Indonesia regarding cash waqf. Several factors have been identified as important in influencing one's willingness to participate in cash waqf, namely knowledge, income, social-culture, and promotion. To determine the influence of these factors in the context of Indonesia, data obtained from respondents from the survey instrument adopted were subjected to statistical analysis. The findings indicate that all the factors are significant in affecting a person's willingness to participate in cash waqf. In view of this finding, several recommendations are put forward to increase the awareness and willingness to participate in cash waqf in Indonesia.
TopIntroduction
Being one of the countries with the highest total population in the world1, Indonesia continues to struggle with the problem of striking poverty and social inequality (Dakwatuna 2016). With approximately 81 percent of the Indonesians categorised in the bottom of the economic pyramid (BPS, 2015), severe social inequality has resulted in several socio-economic consequences, hindering optimal economic growth and increasing the possibilities of social conflicts. A concerted effort is urgently needed at all levels of the society to arrive at viable solutions to address this issue effectively.
In this regard, waqf has a great potential to be developed as a tool to address this socio-economic issue which is highly suitable especially in the context of Indonesia due to several reasons. First, as a country with the largest Muslim population in the world, waqf is a religious instrument that has often been used for many socio-economic development agenda, particularly for education and religious purposes. Second, the government can provide regulations that are appropriate and uniquely applicable in the context of the Indonesian such that it can be well-accepted by the community. Third, as waqf is the efforts from the community and intended for the benefit of the community, reviving waqf assets and mobilising the assets for productive uses would ensure resources and income re-distribution measures are effectively undertaken in line with the objective of reducing the severe income inequality. All in all, if properly managed and developed, waqf meets all the necessary elements as a poverty reduction tool where all segments of the society are well represented and can play their respective roles effectively.
Waqf, as a form of endowment has become a part of the Indonesians’ norms even before Islam entered the Nusantara. Despite having different forms and names, endowments were already known by the indigenous people. Following the entry of Islam into the territory of Indonesia, waqf has been strengthened and garnered, especially in supporting the education sector in the rural areas through Islamic boarding schools (pesantren). More recent developments are intended to further empower waqf as a socio-economic tool via refinements of the legal and regulatory environment, for examples through the issuance of the Law No. 41 of 2004, followed by the Government Regulation Number 42 of 2006, and subsequently the establishment of Indonesian Waqf Board (Badan Waqf Indonesia - BWI) in 2007.
The Law No. 41 of 2004, in particular, has widened the definition of waqf assets in the Indonesian context to also include movable assets including cash waqf. Consequently, with the continuous legal and regulatory refinements, the potential of cash waqf in Indonesia has become enormous. In terms of potential collections, Nasution (2005) estimated that, given the scenario where the 10 million Muslim populations in Indonesia who are earning an average monthly income of IDR5,000,000 (US$370.37) – IDR10,000,000 (US$740.74) contributed their income to cash waqf institutions as low as IDR100,000 per month, the amount of cash waqf that can be collected is about IDR250 billion per month or equal IDR3 trillion per year (US$212.8 million). Unfortunately, according to the BWI, the actual amount of cash waqf collection in Indonesia in 2013 was merely IDR459 billion (US$34 million) or just approximately 15% from what has been estimated. Obviously, the potential of cash waqf in Indonesia is not at its optimum level, and further efforts to reach its potential are greatly needed. This includes identifying factors influencing people's willingness to contribute in cash waqf so that effective promotion can be done to support the development of cash waqf in Indonesia.
On the back of the issues highlighted above, this study aims to provide an empirical investigation on the level of willingness to contribute in cash waqf among the Indonesians, by taking the Muslims in South Tangerang, Indonesia as the sample of the study. In achieving this objective, the study embarks on the following research questions: (i) What is the current level of awareness on cash waqf in Indonesia? (ii) What are the challenges and problems faced by the waqf institutions in promoting cash waqf in Indonesia? (iii) How do specific factors of knowledge, income, social culture and promotion give impact on willingness to contribute in cash waqf? Identification of the important factors influencing willingness to participate in cash waqf would go a long way in ensuring effective efforts and strategies to be undertaken towards enabling cash waqf to achieve its vast potential in Indonesia.