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Fintech companies tap into financing potential in Islamic boarding schools
KNES works with sharia fintech companies Ammana Fintek Syariah and Kerjasama.com to provide funding in Islamic boarding schools.
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'Pesantren' (Islamic boarding school) students, locally known as 'santri', get ready to perform 'shalat dzuhur' (afternoon prayer) at the school’s mosque after attending a class. (-/-)
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he Association of the Indonesian Sharia-based Fintech Companies (AFSI) has recently launched a sharia-based online lending app to tap into the financing potential in more than 3,000 pesantren (Islamic boarding schools) in the country in cooperation with the National Committee for Sharia Economy (KNES).
The project, called Pesantren-Based Development of Sharia Economy and Finance, started in December 2019 with a pesantren in Cirebon, West Java as its first target. The program provides funding, including for santri (Islamic boarding school students), ustadz (Islamic teachers) and cooperatives and micro, small and medium enterprises (MSME) near the pesantren complex.
Islamic boarding schools, which are mostly located in rural regions, have hundreds of students each. Many large pesantren have established small businesses to serve the students and the people around the pesantren complex.
KNES, which is responsible for arranging the program, works with sharia fintech companies Ammana Fintek Syariah and Kerjasama.com, which provide their peer-to-peer (P2P) lending platforms for the funding program. The pesantren administrators are acting as agents who promote the services at their boarding schools.
Ammana, for example, was seeking to disburse up to Rp 1 trillion per pesantren for both its umrah and MSME funding services, the company's chief executive officer, Lutfi Adiansyah, told The Jakarta Post on Wednesday. But Ammana would only be able to achieve the target if human resources in the pesantren were ready, especially in terms of knowledge about sharia fintech services, he added.
"It is a project to promote literacy about sharia fintech services," AFSI chairman Ronald Wijaya said on the sidelines of a press briefing on the sharia financing outlook in Jakarta on Tuesday.
Promoting the understanding of the concept of sharia-based financing has been the association’s program in the last two years as many people are still unable to see the difference between sharia fintech services and conventional financial services, he added.
