Cash Waqf Linked Qurban: Initiating a Social Financing Instrument for Poverty Alleviation through the Production and Distribution of Qurban Livestock in Central Java Province

Abstract

Poverty in Indonesia remains a serious issue, including in Central Java Province. One indicator is the annual decline in meat consumption by 0.14%. Additionally, there is a significant disparity in meat consumption between the wealthy, who consume 4.5 kg per year, and the poor, who consume only 0.03 kg per year. According to the Badan Amil Zakat Nasional (BAZNAS) in 2024, the practice of qurban has excellent potential to improve the community's economy, including in Central Java. The potential for waqf in Indonesia also continues to grow, including livestock waqf, which can address the inequality in meat consumption. This study employs a mixed-methods approach, combining quantitative and qualitative research using 35-panel data sets from cities and regencies within Central Java Province from 2019–2023. The analytical model used is a dynamic linear regression model, where poverty levels are modeled as a function of the logarithm of urban production, previous poverty levels, the logarithm of regional GDP (GRDP), the Human Development Index (HDI), and income inequality measured by the Gini Index. The results of this study show that urban production, regional GDP, HDI, and the Gini Index significantly affect poverty levels, with urban production and GDP hurting poverty. At the same time, HDI and the Gini Index have a positive effect. The qualitative approach focuses on a literature review to develop an initiation model for the Cash Waqf Linked Qurban (CWLQ) as an integrated strategy with the halal supply chain to combat poverty by producing and distributing qurban livestock in Central Java. Therefore, CWLQ emerges as an effective strategy to address poverty in Central Java Province. The policy recommendations from this study emphasize the importance of government and Islamic financial institutions' support in expanding the implementation of CWLQ across Indonesia.

Keywords: Cash Waqf Linked Qurban, Central Java, Social financing, Poverty alleviation, Panel data regression.