Digital Islamic Apps for A Better Welfare in Indonesia

Age continues to grow, in this digital age, technology is present in order to improve the
efficiency and effectiveness of human life. Various innovations continue to accompany our daily
life and facilitate the work of man. These benefits should not only have an impact on the micro
scale, but also impacts the macro by the welfare of society in general.

In Indonesia, poverty is still a major problem that the government focus. Efforts in various
aspects of the economy focused on improving the welfare of the community. With the progress
of time that emphasizes digitalization, government efforts through conventional way is still
insufficient. The utilization of technology to improve welfare can become a significant
alternative to achieve the goal of poverty alleviation.

To be able to utilize digital technology to the problems of poverty, it is important to first

determine the characteristics of Indonesian people themselves. Based on the Central Bureau of
Statistics census, the population of Muslims in Indonesia in 2017 were in the range of 87% or
about 207 Million People in 2017. This very large amount must be used strategically so that the
efforts and government programs can be run on target in improving the people's welfare.

Huge amount of Muslim population in Indonesia is a distinct advantage to be able to progress in

digitizing the products of Islamic banking services. Some countries with its Muslim minority
population can run this system very well, such as Great Britain who have rapidly in its Islamic
financial and crept into the Islamic financial center of the world. Precisely this is an irony to
which Indonesia is a state air-largest Muslim population in the world has yet to run what has
been attempted by any other country which is a state air-Muslim minorities.

Therefore it is very important that the implementation of Islamic financial in Indonesia,

especially the Indonesian has a strong potential to be able to successfully run this Islamic
financial system. One of the most important thing to note is, at this time we will be faced with a
revolution 4.0 which all central economic activities can be centered on one thing, it is called
smartphone technology. Therefore, now is the right momentum to be able to promote an
economic-activity focusin on Islamic finance digitization so it will ultimately boil down to the
welfare of the people in Indonesia.

In this essay, the author will bring two layer problems are happening in Indonesia today. First, on
the level of social welfare which is low and the author will present a solution to the related issue
in the form of digital-based Islamic banking products. The second layer is weak-awareness issue
and lack-understanding issue of the services of Islamic banking products and solutions will be
presented on the substance of this essay. Noted that the problems faced by today's society is a
systemic problem that in its resolution efforts should be in a way that systemic anyway.

Information technology in the current era is now to be utilized in a smart way so that it can make
progress in society. Thus, in welcoming the revolution 4.0, people can take advantage of these
changes to the fullest and can earn a profit in the revolution 4.0. So I believe in order to improve
the welfare of the community and the productivity of financial institutions in Indonesia, in this
case, Islamic Finance or Banking must implement the digitizing of their products in sharia-based
services.

Towards the issue of the first layer; a low level of social welfare.

Islam has a special model to sympathize people that need and have a rights to our property of
excess. This model is known as zakat. Zakat for Muslims is obligatory for those who meet the
requirements set out by religion. Along with the times, zakat payment system can be performed
online. Examples of applications and platforms that provide these services include partner Amil
Zakat (LAZ) through kitabisa.com, Zakat mobile application owned by Rumah Zakat, or
Tokopedia Zakat.

Providers are practically reach out and bring together the intended parties to give zakat and those
who need for secure accountability. The online system led to donors and tax payers know the use
of their zakat money, so that public confidence continues to rise to pay its obligations.

This will certainly have an impact on tackling the problem of poverty as more and more people
who reach and be reached by online charity service. The digitization has been widening the giver
and the recipient of charity because now distributing zakat can be done easily and distribution
are handled by verified parties.

Problems on the second layer; the lack of understanding and awareness of banking products.

According to members of the Board of Commissioners and the Education Sector of Consumer
Protection FSA, Tirta Segara said, still a few people who understand financial literacy.
According to him, from the consumer side, the results of a national survey of national literacy
and financial inclusion in 2016 showed that there were 67.8 percent of people who have used the
product of financial services. However, only 29.7 percent of people who have been able to or
understanding of financial literacy. The explanation may mean, many people who have had
access to finance but is not equipped with adequate financial understanding. Therefore,
increasing the understanding of financial literacy can improve the public's habit of saving and
investing that will be geared towards improving people's welfare.

In the two problems above, there are several solutions offered in the form of availability of
digital-based Islamic banking services. The efforts of Muslim’s society in moving Islamic
economic by digitizing Islamic economics can be done with many ways. Creating the
applications on smartphones to facilitate charitable giving by becoming the connector between
the charity fund managers by giving alms is one way example. Today, based on my personal
observation, no application is able to become a connector for both the stakeholders. Therefore, it
becomes an obligation for every Muslim in Indonesia to be able to take advantage of its science
and technology for the welfare of the people. Especially at the moment of Ramadan, every
Muslim is required to pay tithes until just before Eid. Moments like this that should be utilized to
the maximum to achieve very large zakat potential for research by the National Zakat Agency
(BAZNAS), IPB (Bogor Agricultural of Institute), and the Islamic Development Bank, the
potential zakat Indonesia is able to reach 217 billion annually. One thing that is highly skewed
with the BAZNAS ability to achieve its target of zakat collection in 2015, amounting to 4.2
trillion.
Waqf in Islamic economic instruments also have not been able to maximize its presence in the
economic development of the people. Again, the application is to be the connector between an
endowment with the recipient of waqf in Indonesia does not currently exist.

Though the author convince enough that many Muslims who own property is very reasonably
want to donate some part of their property to those who entitled. With the presence of these
applications would greatly facilitate the meeting of the two parties to then make endowments
contract.

According to Indonesian Waqf Board, potential donations of Waqf land in Indonesia is able to
reach 4.2 billion which it is the most potential waqf land in the world. Of course the presence of
variety of applications in the smartphone, we were able to maximize the economic potential of
this enormous islam. In terms of the potential for a very large amount of money based on the
data above that have been explained, it is proper to have no doubt about the power of sharia-
economy in Indonesia.

Not to mention in terms of time in Indonesia where a month-long moment of Ramadan is a very
appropriate time for economic empowerment of Islam, for example, through Zakat, Infaq,
Sadaqah, and Wakaf (ZISWAF). Muslims during Ramadan, on authors’ perspective, tend to be
more generous in issuing their property for the purposes of ZISWAF than in other months.

Coupled with another moments such as Eid al-Adha, which falls on 10 Dhu al-Hijjah in the
Islamic calendar. At that time the Muslims who are able (having an excess asset) are encouraged
to donate its Qurban which can be either a cow or a goat to those entitled. In momenter call it
economic activities, particularly livestock, is able to succeed in faster way rather than other times
of the year. Utilization of the application for ordering Qurban, Qurban delivery, and Qurban
payment that do not exist has become a homework for Muslim society to create it, especially in
Indonesia to promote economic activities of Muslims.

The use of the smartphone application is one way example that can easily be found daily in the
use of digital technology today. Many other examples in order to boost the economy of sharia
through this technology.