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BI pushes 'waqf' development as financial welfare instrument

Anton Hermansyah (The Jakarta Post)
Surabaya
Thu, October 27, 2016

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BI pushes 'waqf' development as financial welfare instrument Bank Indonesia governor Agus Martowardojo delivers remarks during the opening of the Indonesia Sharia Economic Festival (ISEF) in Surabaya on Oct. 27. (JP/Anton Hermansyah)

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ank Indonesia (BI) is pushing for the development of the waqf (Islamic endowment) system as a social welfare mechanism to support struggling commercial assets, as well as to help accelerate the sluggish economy.

BI governor Agus Martowardojo said mortmain properties under waqf were traditionally used for school, orphanages, mosques, and cemeteries. But little was it known that it could also be used for clinics, medical centers, and even shopping complexes.

"These large social-commercial projects financed through structured waqf are also important instruments to improve social well-being in a sustainable way," he said during the opening of the Indonesia Sharia Economic Festival (ISEF) in Surabaya.

He added that along with zakat (compulsory Islamic charity), waqf could be an alternative cushion during bad economic conditions.

BNI Syariah commissioner Risqullah said small and medium enterprises (SMEs) could fall into debt insolvency during an economic crisis as banks were reluctant to lend a hand because of the added risk of potentially taking on a non-performing loan (NPLs) and the increased profile associated with it.

"Then [in such circumstances], we can use Islamic social funds to remedy insolvent SMEs until they become financially healthy again. After that, banks can take over the job. It is a win-win solution," he said. (ags)

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