Alternative Financing Model of Micro Small Medium Business (UMKM) Based on Productive Zakat By Amil Zakat Institution (LAZ) in Surabaya

This article discusses the problems that arise in micro, small, and medium enterprises (UMKM) in Indonesia in general, namely capital problems, income distribution, and the quality of the products offered. Which of these problems can reduce the productivity of UMKM and ultimately cannot guarantee the welfare of the local community. The research method used is a qualitative descriptive approach. The author looks at the existing problems and proposes solutions by optimizing the means of productive zakat funds that have been collected by the Amil Zakat Institute (LAZ). The distribution of productive zakat funds as a source of funding is the main instrument in this article. The financing and development of UMKM by the Amil Zakat Institution (LAZ) is a solution to the problems of UMKM that have been going on for so long. As the Amil Zakat Institution, LAZ will provide business capital from productive zakat funds, foster entrepreneurship, and human resources, as well as aid and control UMKM actors who have received capital from the Amil Zakat Institution (LAZ). The pattern for developing UMKM is through productive zakat funds that have been collected by the Amil Zakat Institution (LAZ) for UMKM. The author will describe the mechanism and role of the Amil Zakat Institution (LAZ) in distributing productive zakat funds so that through this they can overcome the problems of UMKM. Based on this thought, the output expected by the author is to improve product quality, good distribution, and prosperity for UMKM and ultimately be able to create better economic conditions for the community.


INTRODUCTION
Poverty is familiar to developing countries, including Indonesia.Poverty is one of the nation's many problems that must be resolved immediately, especially in the economic field.It becomes a certainty that poverty alleviation is the most important discussion in improving the country (Ramadhan, 2016).Islam as Ad-diin has offered several doctrines for humans that apply universally with two-dimensional characteristics, namely the happiness and prosperity of life in the world and the happiness and welfare of life in the hereafter (Sartika, 2008).Welfare is a condition that is the hope of every citizen.However, not all citizens can easily get welfare.Talking about welfare issues in Islam, of course, cannot be separated from the discussion of zakat (Mkuua & Yusoffb, 2020;Nafiah, 2015).
The definition of Micro, Small, and Medium Enterprises (MSMEs) stated in Law Number 20 of 2008 is "A company that is classified as an MSME is a small company that is owned and managed by a person or owned by a small group of people with a certain amount of wealth and income."(Sanjaya & Nuratama, 2021).So, in general, the Empowerment of Micro, Small, and Medium Enterprises (MSMEs) is a strategic step in improving and strengthening the basis of the economic life of some people, especially through providing employment and reducing inequality and poverty levels.In addition, improving the quality of cooperatives to develop healthily by their identity and build collective efficiency, especially for Micro and Small entrepreneurs (Aryani, 2022).
Micro Small and Medium Enterprises (UMKM) are business people who work in various business lines that are very close to the community.Based on data (BPS, 2021), the number of micro, small, and medium enterprises (UMKM) in Indonesia reached 65.5 million units in 2019, the number has increased by 1.98% since 2018, which amounted to 64.2 million units.If detailed, it is known that the number of micro-scale businesses in 2019 reached 64.6 million units.While small businesses reached 798.7 thousand units and as many as 65.5 thousand medium-scale business units.The number of UMKM in Indonesia per year in 2019 is equivalent to 99.99% of the total business units.While for large-scale businesses only 0.01% of the total business units in the country.Not only that, UMKM is also able to contribute 60.51% to gross domestic product (GDP) to prevailing prices, but at constant prices, UMKM can contribute to GDP 57.14%.

Figure 1. Number of UMKM in Indonesia
Source: (BPS, 2021) UMKM has an important role in economic growth, national income, and poverty alleviation, and can absorb labor, but UMKM has weaknesses in their operations, including lack of capital, lack of experts, and low forms of promotion of traded products.Thus, the development of UMKM is one of the strategic ways to increase and strengthen economic milestones for most Indonesians, especially through the provision of jobs, equitable distribution of income, and reducing the existing poverty gap.UMKM is one of the most important factors in developing the concept of a populist economy, but the rapid growth of UMKM is not accompanied by acceleration in terms of attention to this sector by the government (Yustika, 2007).

Figure 2. Employment of Indonesian Business Unit
Source: (Kemenkopukm, 2021) Several 119.6 million Indonesians are working in the UMKM sector (Kemenkopukm, 2021), although equivalent to 96.92% of the total workforce in Indonesia absorbed in the sector, but has not been able to improve the level of public welfare in general.The cause of this is the lack of capital and weak market potential for UMKM.Until now micro-power institutions, both conventional and sharia have provided financing/capital functions but still have not played an optimal role, such as sharia cooperatives and Baitul Maa wat Tamwil (BMT).Not all Islamic microfinance institutions have high liquidity reserves.Not only that, not evenly distributed sharia cooperatives and BMT in every village, so it is not uncommon for people, especially UMKM, to be able to access used financing facilities.
One solution to be able to solve the problems faced by UMKM is by optimizing the function of Zakat, infak, and alms funds.Amil Zakat Institution (LAZ) is a zakat, infak, and alms fund management institution that certainly has a surplus of zakat funds.Which is often the Amil Zakat Institution (LAZ) experiencing weaknesses in terms of the distribution of funds, especially productive zakat funds.According to Law Number 23 of 2011 on Zakat Management, which is an institution initiated or formed by the community, which must help in terms of collecting, distributing, and utilization of zakat funds.Today, LAZ not only manages consumptive zakat but also manages productive zakat funds.
Zakat is a form of realization of the third pillar of Islam.Which, zakat is one of the obligations that must be fulfilled for Muslims / Muslims, and the existence of Zakat itself aims to instill the value of faith.Therefore, zakat is a religious obligation that must be fulfilled by all Muslims who have fulfilled the requirements under any circumstances.Practically speaking, zakat is a worship that has a socio-economic dimension.Therefore, zakat is often used to be able to help people who experience difficulties from the social and economic side.Zakat is a vehicle that can build community in a gotong royong and serves as a guarantor of social protection for the community (Fitri, 2017).If managed properly, zakat can be one of the push factors for improving the economic conditions of the community, because, with the distribution of zakat, welfare growth will occur for the recipient group of zakat (Khasanah, 2010).
The Indonesian nation chooses moderate Islam as a choice in understanding and religious practice.Voting for moderate Islam is a choice that is very appropriate considering that Indonesia is a plural and multicultural country.Making moderate Islam an option in religion will provide enormous opportunities for the creation of a harmonious society, harmony, and safety (Syam, 2020).Indonesia is a country with a Muslim majority population in the world, of course, one of the hot issues is zakat.So zakat in Indonesia not only stops at a religious perspective but can also be used as a solution to a social reality that is used as a national resource that needs to be managed and empowered in a trust and correct manner.This means that zakat is one of the economic resources that must be managed responsibly and used as an alternative solution to socio-economic problems used as an effort to empower people (society).According to the Indonesian Zakat Forum, Indonesia has a zakat potential reaching Rp 300 trillion per year.But from the considerable potential, only around Rp 1.8 trillion per year can be achieved (Fitri, 2017).
Currently, the number of Zakat Management Organizations (OPZ) registered at the Ministry of Religion of Yogyakarta Province is more than 28 institutions in the form of BAZDA, LAZ, and LAZIS.However, there is no accurate data regarding the fundraising strategy, management, and distribution of funds as well as patterns of supervision and transparency as a systematic unit of each Zakat Management Organization in the Special Region of Yogyakarta (Kholis et al., 2013).To maximize the potential of zakat to improve people's welfare, zakat management is currently carried out in two ways, namely consumptive and productive zakat management.Consumptive management of zakat is the collection and distribution carried out to fulfill the basic economic needs of the mustahik in the form of providing food and other goods and is a provision for direct consumption, while productive management of zakat is the management of zakat with the aim of empowerment and is usually done by way of capital assistance.weak entrepreneurs, coaching, free education, and others (Soemitra, 2009).Judging from the Big Indonesian Dictionary, the meaning of the word management is the process, method, and act of managing.Another meaning of management is the process of carrying out certain activities by mobilizing the power of other people.This understanding is reinforced by the opinion of Munandar J et al (2018: 1) that Management means the process of managing activities or work activities so that they can be completed effectively and efficiently with and through other people (Aryani & Heri, 2022).
To maximize the potential of zakat owned by Indonesia as an effort to improve the welfare of the community, zakat management can be done with two models, namely consumptive and productive zakat management.The management of zakat in a consumptive manner is a model that collects and distributes is carried out that aims to be able to meet the basic (primary) economic needs of mustahik which can be in the form of food supplies and so forth that are given to be consumed directly by the recipients.In contrast to the consumptive zakat model, productive zakat management can be interpreted as zakat management that aims at empowerment and is generally done by providing capital assistance for weak entrepreneurs, coaching, free education, and others (Soemitra, 2017).
Zakat comes from the formation of the word "zakah" which means to grow and develop, meaning that every zakat that has been issued will develop (Tambunan, 2016).Zakat is one of the Islamic instruments used in the distribution of income and wealth.With the existence of zakat fitrah, zakat maal, and professional zakat, it is hoped that it can reduce the level of wealth inequality in Indonesia, and zakat can be used as one of the mechanisms in the problem of poverty that still exists in Indonesia today, namely through productive zakat (Pratama, 2015).
Al-Haq and Abdul Wahab quoted by Fathan (2020: 8) explain that productive Zakat is zakat in the form of zakat assets or funds given to mustahik which are not spent directly for consumption of certain needs but are developed and used to help their business., so that with this effort they can meet the needs of life continuously (Budiman, 2020).Productive zakat is the management and distribution of productive zakat funds, which have long-term effects on mustahik (Muzdalifah, 2019).Productive zakat has a strategic position in efforts to reduce poverty in Indonesia.This is because it is indicated by the existence of a large capacity for zakat in Indonesia, and a zakat management system that allows it to be used as an effort to reduce poverty in Indonesia.Thinking through the concept, MSMEs have a familiar orientation with the management of productive zakat (Efendi, 2017).Management of productive zakat funds aims to increase energy for zakat which has an impact on the welfare of MSMEs and solving poverty (Rosyidah et al., 2021).Zakat funds collected and distributed by the Amil Zakat Agency in East Java influence the number of poor people (Firmansyah & Ridlwan, 2019).
Zakat channeled to mustahik will have a role as leverage in their economic improvement if tasharrufkan in productive activities.Thus, productive zakat management has the concept of careful planning and implementation, such as analyzing the causes of the emergence of poverty, the absence of working capital, and the lack of employment.So, with the emergence of these problems, a plan is needed that can use zakat to be productive (Fajri, 2010).The utilization of zakat is productive and can be done by making zakat funds as business capital, which is used as economic empowerment for the recipient, and hopes that the recipients of these funds can run or finance their lives independently.With the productive zakat fund, it is expected that the recipients can produce a fixed income, able to increase the volume of business, develop the scale of the business and they can set aside their income to be used as savings (Sartika, 2008).
This research is supported by the research of Ali, et al where the provision of productive or consumptive zakat funds to mustahik affects increasing welfare, but productive zakat funds are more capable of increasing mustahik welfare compared to consumptive zakat (Ali et al., 2016).Other research on productive zakat says that productive zakat affects the increase in business performance of mustahik (Nidityo & Laila, 2015).If business performance increases, mustahik will face prosperity.Farid's research, et.al said that it did not significantly affect the profits or income of mustahik (Farid et al., 2013).
The productive zakat funds that have been collected by LAZ, can be used as alternative financing capital that will be channeled to UMKM to improve the welfare of UMKM and be able to equalize distribution fairly and evenly to improve the welfare of the community in general.Based on this, the author tried to provide alternative economic disparities solutions, especially in the UMKM sector through an article entitled "Alternative Financing Model of UMKM based on Productive Zakat by Amil Zakat Institution (LAZ) in Surabaya".

RESEARCH METHODS
In this article, the author uses descriptive writing with the use of data through a qualitative approach that uses the in-depth interview method.According to (Moleong, 2000) interpretation qualitative research is a research procedure that produces descriptive data in the form of written and oral words of others and observed behaviors.In-depth interviews are generally defined as the process of obtaining information for research face-to-face with the interviewer and interviewee, through or without the use of interview guidelines, in which interviewers and informants are engaged in social life.Sugiyono (2014) explained that the purpose of the in-depth interview is to be able to find a problem more openly.The data through qualitative approaches is obtained through a process that produces descriptive data that includes words in writing or writing done using literature studies, both in the form of written data and numbers that are easy to understand.The purpose of descriptive writing in this article is to provide a description or a systematic picture of the contribution of thought in the form of concepts to the problems that have been outlined above by the author.

Urgency of the Role of Amil Zakat Institution (LAZ)
Poverty is one of the problems that must be solved by the Indonesian government.Because based on a difficult economy, so many crimes have sprung up under the pretext of meeting the needs of life.Not only that, poverty is also one of the problems for a family to get a decent life, such as the need for quality education.Therefore, the government must play an active role in reducing the number of poor people.One of the efforts that can be done is to optimize the distribution of zakat, infaq, and alms, especially the utilization of productive zakat to the community, especially for UMKM who need capital to develop their business.Thus, it is expected that UMKM actors can survive and be able to develop their businesses, and be able to open new jobs.And in the end, it is expected to be a more prosperous society.
The welfare of UMKM and surrounding communities absorbed by UMKM is one of the indicators in reducing the number of poverty rates.When UMKM and communities absorbed by UMKM (mustahik) have prospered, then the amount of poverty by itself can be controlled, to create these conditions, the state, in this case, the government must be able to optimize the role of BAZ (Amil Zakat Agency) and LAZ (Amil Zakat Institution).The role of BAZ and LAZ must be further enhanced, especially in collecting zakat funds from the mandatory zakat (muzakki).In addition, amil zakat, BAZ, and LAZ must be able to manage zakat funds, especially the management of zakat funds used for the benefit of productive activities (productive zakat).It is expected that the utilization of zakat that is productive can provide alternative financing for UMKM actors and in the future able to become UMKM actors who develop and can open new jobs, to create prosperity for the community in general.
In its development, the role of LAZ can be an alternative financing institution when UMKM actors are unable to access financial services facilities due to the many limitations and some prerequisites that must be met by UMKM in banking and non-bank financial institutions.LAZ can be used as an alternative in financing for UMKM.Amil Zakat Institution (LAZ) functions as an institution in collecting Zakat, Infaq, and Alms (ZIS) funds from the community which are then distributed to those who are entitled to receive them, especially to those UMKM.As for the distribution of zakat funds given to UMKM actors through financing products through productive zakat funds.
LAZ is in the process of empowerment of UMKM by providing financing to UMKM actors.After the financing has been given to UMKM actors, LAZ officers will review the field to provide entrepreneurial and HR development for UMKM actors, as well as aid and control for UMKM actors.Not only that, officers also provide supervision of productive zakat funds that have been given so that they can be used by what has been intended.
The guidance provided by LAZ to recipients of financing through productive zakat is needed.With coaching will be able to help UMKM to be able to increase their efforts both technically and mentally in solving problems arising in their business activities.The financing provided to UMKM actors is expected so that UMKM actors can raise income and develop businesses.If UMKM can develop, then the economic problems of the community will be overcome.And it will ultimately have an impact on economic growth as well as the well-being of society in general.

Micro Small and Medium Enterprises (UMKM) Problematics
Micro Small and Medium Enterprises (UMKM) have a fairly important role in economic growth, national income, and poverty alleviation and can absorb labor, but UMKM has weaknesses in their operations, including lack of capital, lack of experts, and low forms of promotion of traded products.Thus, the development of UMKM is one of the strategic ways to increase and strengthen economic milestones for most Indonesians, especially through the provision of jobs, equitable distribution of income, and reducing the existing poverty gap.Several 119.6 million Indonesians are working in the UMKM sector (Kemenkopukm, 2019), although equivalent to 96.92% of the total workforce in Indonesia absorbed in the sector, but has not been able to improve the level of public welfare in general.The existence of small and medium enterprises (UMKM) is unquestionable, especially since they have demonstrated their ability to survive and become the driver of the economy after the economic crisis.However, UMKM is also faced with many problems, namely limited working capital, low human resources, low promotion of products managed by UMKM, and a lack of mastery of science and technology.Another challenge facing UMKM is the relationship between uncertain business prospects and unsustainable plans, visions, and missions.This generally means that UMKM has not been able to manage their business capital for personal needs, with the characteristics (1) of the family business, (2) the relatively simple use of technology, (3) lack of capital access (bankable), and (4) has not been able to separate capital between business needs and personal needs (Sudaryanto et al., 2014).
Many solutions have been provided, including loan funds through financial institutions both banking and non-banks, but in practice, it is not as easy as expected.Banking and nonbank financial institutions will have a lot of consideration in providing financing for UMKM.
Not only that, but high-interest rates are also a problem for UMKM when applying for loans/financing funds in financial institutions both banking and non-bank.So, not a few UMKMs go out of business due to higher debt levels.
One of the alternative solutions in overcoming capital problems for UMKM actors is to optimize the role of LAZ as a zakat management institution that can provide alternative financing in capital fulfillment for UMKM actors.Access to capital that is difficult for UMKM from financial institutions both banking and non-bank can be replaced by LAZ through productive zakat as an alternative financing.Not only as a capital provider for UMKM actors, LAZ also provides community empowerment services through the development of entrepreneurship and Human Resources (HR) for UMKM actors who have received financing through zakat by LAZ, as well as aided and controlling in increasing the productivity of UMKM and the use of financing capital by the designation.With the utilization of UMKM is expected to be able to leverage the welfare of UMKM actors and will eventually be able to leverage macroeconomic welfare.

Multiplier Effect
Alternative financing models through productive zakat for UMKM are expected to provide a broad impact on various sectors.The expected multiplier effect includes: 1.For the Government It is expected that the government will get the effect in the form of periodic GDP increases and be able to reduce the unemployment rate in Indonesia.

For Society
It is expected that UMKM will be able to obtain jobs and be able to increase income and will ultimately be able to improve the welfare of the community.

CONCLUSION
UMKM funding is often the main problem of business development and expansion initiated by the community in general.Through an alternative financing model through productive zakat that we offer can make an alternative financing solution that is valid legally normative law and religious law.We realize that the model we offer is too early to be an alternative solution to the UMKM problem globally, namely UMKM funding that is normatively funded through the government and private sector.UMKM financing is often carried out by commercial banks through multi-group effect analysis as an effort to increase UMKM funding continuously.The use of government credit guarantee funds is also widely done in developing countries which is a political promise of actors to get as many votes as possible.Research (Adhikary et al., 2019) observed that government credit guarantees play an active role at the aggregate level of the industry compared to private financing.On the other hand, this study proposes at least one new model in UMKM financing, namely through productive zakat that does not violate Sharia law or constitutional law.Although the study of the legal legality of the use of productive zakat against UMKM is not adequate, it can validly make alternative financing of UMKM.
This research proposes a new financing model, so the relevance for application in certain areas and still needs in-depth theoretical studies based on multi-perspectives.Further research is expected to observe the alternative financing of productive zakat to UMKM through multidisciplinary observations so that the accuracy and accuracy of the models we offer becomes relevant and valid to be used in other fields.

Figure 3 .
Figure 3. Alternative Financing Flow Based on Productive Zakat (Source: The Author) The information: 1. Productive zakat fundraising by Amil Zakat Institution (LAZ) from Muzakki