Digital Technology and Its Impact on Islamic Social Finance Literacy

Irfan Syauqi Beik () and Laily Dwi Arsyianti
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Irfan Syauqi Beik: IPB University (Bogor Agricultural University)
Laily Dwi Arsyianti: IPB University (Bogor Agricultural University)

Chapter Chapter 23 in Islamic FinTech, 2021, pp 429-445 from Springer

Abstract: Abstract Indonesia is one of five middle-income countries that remains trapped in the area where the richest 10 percent of their population continue to conquer a much greater share of the national income than 40 percent of the poorest. Fighting poverty and injustice are the main objectives of Islamic finance, and thus the society may live with good welfare and reach maqasid sharia. Within the Islamic finance sector, digital technology has emerged in the middle of this nascent industry. Financial sector has utilized the commencement of digital services to enhance its coverage, especially when government is promoting financial inclusion. This paper also elaborates Islamic social finance industrial solution to improve digitalized application as well as justifiable recommendations that followed it. Daily lifestyle of middle class population has switched the payment system, from manually transferring money through conventional banking services into employing e-banking facilitation for social funds-related transaction. A simple transaction leads to tremendous growing of the shifting social class penetration. This phenomenon has put BAZNAS to target 30 percent of zakat and charity transactions are done via digital platform in 2020. As a result, in 2020, the zakat literacy index survey showed that the surveyed Indonesia’s population has a moderate level of literacy, with a score of 66.78. Basic knowledge of zakat contributed the highest score among the dimensions. It seems that zakat institutions still have a homework to bring Islamic social finance literacy into society, particularly via digital frameworks.

Keywords: Digital; Finance; FinTech; Islamic; Social finance; Literacy (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-030-45827-0_23

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DOI: 10.1007/978-3-030-45827-0_23

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