Indonesia are ready to bring Islamic fintech agenda with new digital platforms

Indonesia fintech

President of Indonesia Joko Widodo, inform that Indonesia are ready to bring Islamic fintech agenda with new digital platforms. He announced that he will lead a dedicated national islamic finance committe which has identified the Halal digital economy as a strategic pillar of its robust strategy to become a force to be reckoned with in the global islamic finance sphere.

Launched 2 years ago, Indonesia’s National Islamic Finance Committee (KNKS) purpose is to ensure the Republic is positioning as an international Islamic Finance hub, rivaling neighboring Malaysia. At first, their focus is only on financial sector, but it’s widened its outlook to include the entire Halal value chain on the basis that growth of Shariah finance in the Muslim country of 264 million goes hand-in-hand with the Halal industry. This paradign shift culminated in the Master Plan for the Indonesian Islamic Economy (MEKSI).

MEKSI which laund in May 2019, with digital economy enhancement as a key component of the multipronged plan.  One of the big target is to champion and Islamic digital economy agenda and include concrete islamic fintech measures to advance its Shariah digital economy agenda.

From IFN Fintech, it’s discover 3 area which being focused by KNKS. They believe this is the main key to ensure Indonesia bring the Islamic fintech with digital platforms.

Zakat platform

KNKS had divided Zakat in 3 core functions: a Zakat data integration platform to facilitate the development of a comprehensive national policy on religious taxation; to increase the accountability of Zakat institutions; to enable the payment or collection of Zakat through a seamless digital avenue.

It is understood that the committee will collaborate with existing platforms to fulfil the latter two objectives .

Zakat fintech
Zakat : Giving back to community

Zakat is the one of 5 pillars in Islam. The purpose is to ensure the economy from the top can be shared together with the lower income people. Not limited on the financially aspect only, the wealthy muslim people also can understand the emotion of struggle and hardships of those who are poor and need help. Those who are receiving the zakat also will feel gratitude to the high income people and they will live with happy and prosperous.

Islamic cooperatives platform

The vision for the Islamic cooperatives, or Baitul Maal wa Tamwil (BMT) platform is relatively more ambitious. KNKS intends to develop a centralized system to synchronize and integrate existing BMT core systems.

“The objective of the plan is simply to build a central real data management [system] of every BMT institution nationally, so that [supervision] of this industry could be run optimally,” according to Dr Sutan. The government has yet to decide on who will operate this system.

Islamic digital payment system

The driving purpose for this initiative is to enhance digital payment services to Shariah-conscious retail consumers.

While the digital technology infrastructure in the consumer transaction space is developing rapidly in Indonesia, it has mainly be an endeavor of conventional banks and financial institutions, with Islamic banks often left out of the equation and lagging behind their conventional counterparts, according to Dr Sutan.

“Therefore, with this digital payment system, Islamic financial customers can also enjoy the new world of digital payment, and on the other side, we can maintain the market share of Islamic bank assets/funding,” he said.

Original source are from IFN Fintech

Related article : History of islamic banking

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