RETAIL WAQF SUKUK

Dr. Hendri Tanjung

Associate Professor, Ibn Khaldun University Bogor, Indonesia

A member of Indonesia Waqf Board

Perhaps this is the only combination of Islamic social and fiscal finance that is recognized by the IMF and World Bank, because it was launched at the IMF and World Bank annual meeting some time ago in Nusa Dua Bali. Its name is Cash Waqf Linked Sukuk (CWLS).

CWLS is one manifestation of the productive waqf program from the Indonesian Waqf Board in collaboration with the Ministry of Finance and Bank Indonesia as facilitators. The first series of CWLS, named SW001, has been launched and issued at 50.8 billion rupiah with the majority of institutional investors. To provide waqf facilities to the community, a retail waqf sukuk was launched which was named SWR 001.

The launch of SWR001, which was carried out by two ministers at once, namely the minister of religion and the minister of finance, was held on October 9 2020. Attended by more than a thousand people, the echo and aura of SWR001 was extraordinary. Minister of Religion Fachrul Razi hopes that with this CWLS, Indonesia will become the World Sharia Financial Center. The Minister of Religion said that if only 20 percent of the cash waqf target could be realized, this figure would have a huge impact on the Indonesian economy.

Deputy Chairman of the Indonesian Waqf Board (BWI), Imam Teguh Saptono, calculated that the potential for cash waqf in Indonesia reaches 77 trillion rupiah per year. This means that with a realization figure of 20 percent, Indonesian cash waqf will collect 15.4 trillion rupiah per year.

Finance Minister Sri Mulyani Indrawati said that Indonesia is known worldwide as a Frequent Sovereign Sukuk Issuer (FSSI). Since 2008, State Sharia Securities or also known as Government Sukuk have reached 1539.9 trillion rupiah with the current outstanding amount being 930 trillion rupiah. With this state sukuk, there were 78 projects financed in 2015, and 870 projects in 2020. To date, 203.6 trillion rupiah in retail sukuk have been collected. If then retail waqf sukuk also follow in the footsteps of retail sukuk, it is possible that retail waqf sukuk will record 200 trillion rupiah.

SWR001

Retail Waqf Sukuk (SWR), which is given the 001 series, is a sukuk purchased by investors (waqif), where the profit sharing is equivalent to 5.5% per year, paid every month, and given to Nazirs to be used to build social projects, such as education, health, etc. The minimum term is two years. The minimum investment is one million rupiah with no maximum limit. After two years, the funds will be returned to the waqif.

The government collaborates with large sharia banks as distribution partners. These sharia banks will collect this waqf money from the community. The collected waqf money is then placed in waqf sukuk issued by the ministry of finance.

Several strategies that can be used to market this retail waqf sukuk include offering SWR001 to existing waqifs who have been registered at the Sharia Financial Institution Receiving Cash Waqf (LKS-PWU), offering SWR001 to priority customers, creating a webinar by inviting resource persons from BWI and the Directorate General Financing and Risk Management (DJPPR) Ministry of Finance as a speaker, and cross selling to individual and institutional customers. How to order CWLS can be done offline at the LKS-PWU branch offices.

It seems that this retail waqf sukuk will optimize the LKS-PWU Sharia Bank. The Financial Services Authority said that so far, sharia banking has not had a differentiated model. Hopefully with this Retail Waqf Sukuk, the differentiation of Islamic banking models will become clear.

For this initial stage, several nazir were appointed to manage this waqf. Among them are the Indonesian Waqf Board (BWI), Baitul Maal Muamalat (BMM), Hasanah Titik Foundation, BSM Ummat Waqf, Dompet Dhuafa, NUCare_LazisNU and Lazis Muhammadiyah.

Fiscally, this retail waqf sukuk is a domestic-based investment offered to individuals/retailers. The hope is that this SWR will sell well and replace foreign-based investment. The more SWR can be collected, the stronger the nation’s spirit and sovereignty will be. If the nation’s spirit is maintained, then the nation’s blessings can be achieved. Therefore, it is very appropriate that the motto of SWR001 is “Kindness of Jariyah Full of Blessings”.

Because the target is retail and there are many target investors, the value is made small, namely one million rupiah. If 4.2 million civil servants buy SWR001 for one million rupiah each, 4.2 trillion rupiah will be collected. If all 2 million state-owned enterprises employees endow 10 million rupiah in waqf, 20 trillion rupiah will be collected. If all 8 million entrepreneurs had a waqf of one million rupiah, 8 trillion rupiah would be collected. So the total collected from civil servants, state-owned enterprises employees and entrepreneurs is 22.2 trillion rupiah, exceeding 20 percent of Indonesia’s cash waqf potential.

The Promise of Independence

BWI Chairman Mohammad Nuh invites the entire Indonesian nation to “Let’s give waqf” to realize the promise of independence contained in the Preamble to the 1945 Constitution. “Furthermore, to form an Indonesian state government that protects the entire Indonesian nation and all of Indonesia’s blood and to promote general welfare, educate “The life of the nation…”. Protecting what is meant is not only protecting while in the world, but also protecting while in the hereafter. This is the urgency of waqf, which provides protection (protection) not only in the world, but also in the hereafter.

That is a very visionary promise of independence, not only worldly, but also spiritual. A promise that will not change forever, because the Preamble to the 1945 Constitution cannot be changed. The noble promise of the nation’s founders was to advance general welfare and make the nation’s life more intelligent. How many public facilities were built from waqf. How many educational facilities and infrastructure have been built from waqf.

The author invites all Indonesian people, let’s give waqf for the benefit of the people and the dignity of the nation. Let’s give waqf starting from ourselves, then ‘we’ and ‘us’. This is the power of WE, in the sense of our power or WE in the sense of the power of the Waqf Economy.

[1] English Translation of paper published at PELUANG Magazine November 2020