A Peer-to-Peer Lending Methods in Management of Zakat Funds through Sharia Financial Institutions

Abstract

The gap of living standards in society should be minimized through the potential of zakat in Indonesia. Indonesian population has recorded by the Central Bureau of Statistics, in March 2018 amounted to 265 million and was expected to reach 271 million by 2020, then the poor society in Indonesia  were 25.95 million people. Correspondingly, the dominance of Muslims in Indonesia makes zakat as a potential welfare instrument.The study was conducted by PIRAC noted that, the potential of Zakat funds amounting to 20 billion in Indonesia. Where the average person per year has the potential to spend Rp. 557.267. However, this potential has not been able to be achieved by BAZNAS. Many destitute and poor groups from year to year remain status as mustahik. Among the obstacles faced was located in the management and distribution of zakat funds. This study aims to examine the management and distribution model of ZAKAT through Islamic Financial Institutions (LKS) using Peer to Peer Lending (P2PL) methods. With a qualitative descriptive approach, zakat funds could be managed by LKS institutions with this method, because P2PL schemes are inclusive in managing zakat funds. In that management, the funds awere divided into two, namely consumptive and productive funds. By LAZ through LKS the productive funds were managed with management and products contained in the LKS. One of the supporting instruments is halal investment. By using methods P2PL investment, zakat funds can grow each month with little downside risk. In line with the development of the Financial Tecnogy (FinTech), LAZ with LKS can work together in the utilization of information technology to manage and distribute zakat funds to boost the economy and reduce mustahik in Indonesia. Keywords: P2PL, Zakat, Platform, Investment, LKS