New Practice of Zakat for Mutual Aids with Using Microfinance Scheme: A Case Study of eL-zawa in Malang, Indonesia

Abstract

This paper aims to describing the zakat institution eL-zawa as equipment of "mutual aids (gotong royong)" of its Muslim community (Ummah), not only as unilateral system for "giving" from rich to the poor. Zakat (Islamic almsgiving) is one of the important duty for all Muslim who fulfill the nisÄb (minimum amounts of wealth to be obliged to zakat). Zakat payer donate capital and the funds distributes to the recipients through amil(zakat collector) or zakat management organizations. eL-zawa is a unique zakat institution based on campus at National Islamic University of Malang, they use the zakat funds as zakat-based microfinance as using “qardh al-hasan (free-interest loan)†and “mudharabah (profit-lost sharing)†scheme. One of the biggest characteristic of eL-zawa is that its funds are mainly provided by cutting 2.5% of the salary of its university employees. From the theory, 8 categories of zakat recipients (asnÄf) is determined from al-Qurʾan and the main target is poor and needy. However, this case study of eL-zawa revealed that there are many recipients who have high educational background or formal job. What does this innovative concept change happen for? This paper concludes the evolution of Islamic intelligence provides theoretical innovation and it also changing mindset of Muslim middle-class step by step. First it induces the expansion of awareness that paying zakat is not only duty for rich but also for people who fulfill nisÄb even if only slightly. Secondly, because of the first awareness, the function of zakat is not only the re-distribution system from rich to the poor, but also for mutual aids amongst the Muslim civil society.