The role of zakat empowerment program in transforming the unbanked farmer : case study of BSI village program in Rejo Asri, Central Lampung

Abstract

The exact processes, tactics, and results of the BSI Village Program are the focus of this study. It aims to identify the elements that contribute to the transformation of unbanked people into active bankable persons within the role of zakat empowerment program by performing a thorough case study. The research focuses on the intervention of BSI Village Program, a community development initiative implemented in Rejo Asri village, Lampung Tengah, Sumatra, Indonesia from 2019 to 2022. The particular BSI Village program was a special situation to empower 100 poor families by the use of zakat funds in community development activities. The research employs a mixed-methods approach, combining qualitative and quantitative data collection methods. The qualitative data were collected through focus group discussion (FGD), interviews, and document analysis, while the quantitative data were collected through a survey of the beneficiaries and experts. The survey involved 78 accessible beneficiaries and 10 experts. The perception survey results were analyzed by a cross regression to measure the influence of zakat empowering program on productivity, financial literacy and financial inclusion. System expert’s rating survey were conducted with two consecutive sequences of Interpretive Structural Modelling (ISM) and Analytical Hierarchy Process (AHP) to define the exact process of BSI Village program and how might alternative strategy can be used. The findings reveal that the BSI Village Program has raised the beneficiaries from poverty line by year 2022. The zakat empowering program was perceived as influential to productivity, financial literacy and financial inclusion of the beneficiaries. BSI Village program can be defined into top five elemental process according to ISM analysis. In the context of retrospective goal, the AHP result the transformation of the unbanked people into active bankable person in the agricultural/farming sector can be achieved by mostly productive intervention without exit strategy (closed loop). The research concluded that BSI Village program is influential to the transformation of the unbanked farmer into active bankable individuals in Rejo Asri, Lampung Tengah with the role of zakat empowerment program in the process.