Implementation of the Qardhul Hasan Agreement at Indonesian Islamic Financial Institutions

Qardhul Hasan is one of the alternatives for usury-based loans (debt). Islamic economic principles forbid a loan with interest. The aim of loan transactions through Qardhul Hasan is used to help increase the country's economic growth. This working paper aims to explain the concept of Qardhul Hasan management. The management of Qardhul Hasan can be implemented from zakat, infaq, sadaqah , and waqf funds. One of the main regulations in carrying out the management of Qardhul Hasan is the DSN-MUI Fatwa No. 19/DSN-MUI/IV/2001 concerning al-Qardh . With a descriptive qualitative approach, this study aims to explain the implementation of the Qardhul Hasan contract at BAZNAS, BWI, and other Islamic financial institutions. BAZNAS and BWI are Islamic financial institutions in Indonesia that are active in implementing Qardhul Hasan in their operational activities. Therefore, the result of this research will also explain the differences in the management of Qardhul Hasan in BAZNAS Semarang Regency and BAZNAS Tulungagung Regency. This research is necessary to do because this study provides a descriptive perspective to explain the advantages of each of these Islamic financial institutions in detail. Moreover, the result of this study would become a comparison of each of the management of these Islamic financial institutions that can be input for every other Islamic financial institution.


INTRODUCTION
Qardh (loans) are an integral component of the conventional banking and financial system. For-profit financial institutions can hardly function without the conditions of accepting and promoting Qardh, though, under a different name, dress and form (Herianingrum et al., 2019). The involvement of Qardh turns out to be very important in almost all interest-based financial instruments, Islamic Financial Institutions (IFIS) try hard to avoid using the term "Qardh" for their products. For IFIS, the basic reason behind the abstention from the term "Qardh" is their fear of being involved in usury. Remarkably, from a sharia perspective, Qardh "if it is not an instrument of virtue, becomes a complicated matter if it is developed to obtain any material gain through it" (Abdullah, 2015).
During the 1998 economic crisis in Indonesia, Islamic financial instruments became one way out of the economic downturn in the past. One of them is lagging development and development both in the economic sector, infrastructure, education, and other sectors, such as the Lambaet Region in Aceh seeks to create financing initiatives based on the concept of tabarru' (help). The financing system is simple but full of sharia values, where what is required from this financing is only to return the principal borrowed within the agreed period.
These loan funds come from zakat and infaq from several parties which are rolled out by the manager to the community, on this basis the authors suspect that the financing model implemented is under the Qardhul Hasan scheme. This financing model was initiated in 1998 and still exists and continues to grow today (Ashal & Nanda, 2018). However, research by Mutamimah et al (2022) and Wulandari et al (2016) explains the risk of Qardhul Hasan financing is considered to have a greater risk than other financing models found in Islamic financial institutions. Moreover, using the Qardhul Hasan scheme is also one of the most needed financings when viewed from the pyramid of community needs. Financing transactions using the Qardhul Hasan contract are considered easy and flexible, and can positively impact the recipient of the financing (Anjum, 2022;Falikhatun et al., 2016; reasonably high risk of returning the funds due to the concept of at-tabarru' in the Qardhul Hasan contract, the lender or Qardhul Hasan financing provider must have a willing and sincere attitude if the funds are not returned on time or even do not return in the very same.
Limited capital to be distributed in the form of qardhul hasan is one of the problems in implementing this contract optimally. In addition, the risks faced by IFIs are more significant than other kinds of contracts because there is no required guarantee for customers to apply for financing with a qardhul hasan contract. Therefore, this is one of the main concerns, why are not many IFIs providing qardhul hasan contracts to their customers? However, the demand for qardhul hasan financing is also quite high. This is supported by Aderemi and Ishak (2020) which proved that Qardhul Hasan contract is possibly to be implemented as capital fund for SMEs and the risks could be mitigated. The implementation of the qardhul hasan contract is also necessary as a form of increasing social awareness that can form a good image and loyalty for IFIs to the community (Putri et al., 2021).
A crowdfunding system with Qardhul Hasan financing has been described as a framework by Aderemi dan Ishak (2022). In the previous research, Aderemi dan Ishak (2022) explain the flexibility and possibility of Qardhul Hasan as an Islamic financial instrument in providing financing in Malaysia. The capital funds will be collected in the form of crowdfunding, which will then be distributed to Micro, Small, and Medium Enterprises (MSMEs). Even though the risk of returning funds is high, if it goes well, this financing can push the wheels of the economy in society even better. The use of crowdfunding funds in Islamic financial institutions themselves is also highly supported, and their use has even been proven in the Al-Qur'an and Sunnah. It is concluded that there are four types of crowdfunding allowed to be implemented, such as including awardbased crowdfunding, donation-based crowdfunding, loan-based crowdfunding, and equity-based crowdfunding (Aderemi & Ishak, 2022). This is something that has not been found in the financial system in Indonesia. Thus this research seeks to formulate a framework that is similar but can be implemented in all financial institutions in Indonesia, such as BAZNAS, BWI, Islamic Banks, BMT, and so on.
The successful implementation of Qardhul Hasan financing by other Islamic financial institutions is also proven by Ülev et al (2022), that Qardhul Hasan financing distributed in Turkey can increase household income by 35%.
Unfortunately, however, this increase in income also resulted in 23 out of 30 households spending more on the consumption side, the rest on the productive side. Therefore, the study emphasized the use of Qardhul hassan financing to encourage the productivity of the beneficiaries or MSMEs. Besides being able to increase personal income, fulfilling the needs of the poor could be fulfilled because it is considered that the costs incurred by these MSMEs are small.
In addition, financing using the Qardhul hassan scheme is also considered to provide extraordinary benefits in replacing zakat and waqf instruments, which already have their standard. It was proven by the implementation of Qardhul Hasan financing for participants in the Fael Khair Waqf (FKW) program in Bangladesh. The research revealed that the program implementation significantly impacted reducing poverty by comparing poverty rates between program areas and control areas. The difference in the poverty rate is quite visible between the program areas and the control areas before and after the implementation of the FKW program with Qardhul hassan financing (Muneer & Khan, 2022). This is in line with research by Ascarya et al (2022)

RESEARCH METHOD
This research is qualitative research with a case study approach. The choice of this case study approach is in accordance with the theory of Eisenhardt (1989) and Yin (2011), which states that qualitative research with a case study approach can provide a new perspective on previous theories or research and is helpful as material for further research. Thick descriptions or very detailed notes are used in this research, allowing the reader to appreciate and finally gain a deep understanding of the social conditions being studied.
This research uses interviews with e-mails sent to informants as a form of online focus group discussion (FGD) invitations using the Zoom application with the representative of BAZNAS Semarang Regency and BAZNAS Tulungagung Regency to inform the explanation of the implementation Qardhul Hasan in each institution. The authors chose BASNAS Semarang Regency and BAZNAS Tulungagung Regency because, based on previous research, not many studies have been found that specifically discuss the role of Islamic financial institutions in qardhul hassan contracts. In addition, through a comparison of the two IFIs, it aims to conclude a financing plan that is more applicable to Islamic financial institutions in general. However, the FGDs were conducted using the Zoom application and interviews were conducted with the Head of the Collection Section, the Head of the Distribution and Utilization Section, and the Head of the Planning, Financial Management and Reporting Section both at BAZNAS Tulungagung and at BAZNAS Semarang. Thus the total respondents used in this study amounted to at least 6 (six) people. The FGD was conducted separately between BAZNAS Tulungangung and BAZNAS Semarang last July. The purpose of the FGD is to explore specific problems, which are related to the topics discussed. This technique is used to avoid the wrong meaning of the researcher to the problem under study. Vol. 8 No. 2

The Concept of Al-Qardh
Qardhul Hasan comes from two words al-Qardh and hasan. Al-Qardh means cutting and is called Qardh because the contract used comes from the lender's property which is cut and given to the borrower (Ashal & Nanda, 2018;Martha, 2020;Sukma et al., 2019). In a Qardh contract, the lender gives the borrower certain loan items on the condition that the borrower is responsible for returning a similar property to the lender without material, qardh means to withhold. Islam forbids interest (riba) and allows borrowing (qardh). Qardh refers to interest-free loans that are meant to help someone who requires cash. Giving cash to people in need is a commendable and recommended act where a Muslim is rewarded by Allah SWT (Saleem, 2013). At the same time, Hasan has a beautiful meaning (splendid). Therefore, these two words, when combined, will mean "beautiful loan". As the Qur'an confirms that these loans are given to Allah (SWT) rather than to the borrower to ease the pain of "ripping off" a part of one's wealth and parting with it to lend to someone in need (Askari et al., 2009).
According to Ascarya (2011), Qardhul Hasan is a loan agreement from a bank (Muqridh) to a certain party (Muqtaridh) which must be returned with the same amount according to the loan. Muqridh can ask for collateral for the loan to Muqtaridh. Loan repayments can be made in installments or all at once.
Before understanding the financing scheme with a Qardhul Hasan contract, it is important to understand the requirements in transactions using a Qardhul Hasan contract, namely (Saleem, 2013): 1) Both the lender (muqridh) and the borrower (muqtaridh) must have the complete legal capacity to sign a Qardh contract; 2) The borrowed money must be given to the borrower and must be his.
There is no loan contract if the borrower does not take ownership of the money; 3) The borrower must obtain absolute and unconditional ownership rights to use and retrieve the borrowed money. The money borrowed and returned must be the same and included in the same currency; 4) The borrower is obliged to return the same amount in the same currency. The conditions for exchanging ribawi goods spontaneously do not apply to Qardh contracts. This exception is made to allow people in need to borrow money and return it later. For example, someone who borrows money in Rupiah must return it in the same currency; 5) According to most schools of Fiqh, there should be no specific date for repayment of loans (Qardh). Determining the loan settlement date, they argue, will change the charitable nature of the contract. Thus, the borrower can repay the loan at any time as long as he can do so. However, the majority of Maliki scholars believe that in transactions using a Qardh contract, both parties may agree on the period of the loan. However, this will not make a difference between Qardh and dayn contracts (loans with a certain period). Ulama' Maliki argues that Muslims are free to provide any conditions in a transaction except the conditions that forbid an act/thing that is permissible or forbid an act/thing that is permissible.
a) The loan must be settled in one lump sum at the request of the lender.
b) The lender may not stipulate that the borrower must repay the loan elsewhere.
c) It is not permitted under any circumstances for the lender to obtain the right to use the loan funds provided to the borrower. to the lender when the amount of funds is due, without any additional yield.

Management of Qardhul Hasan by BAZNAS
The management of zakat funds which are used as capital in Qardhul Hasan transactions raises many pros and cons among scholars and world Islamic They believe that if only debts can be paid from zakat assets, then of course it will be more important to allow borrowing from zakat in a good way, which is clean from the element of usury. Through qiyas aulawiy as furu' law which is more important than ashal law. Borrowing (al-Qardh) using zakat assets is more important, it is permissible to borrow from zakat in a good way, which is clean from the element of usury, and then later returned to the state treasury.
If the use of zakat funds persists in a consumptive zakat distribution system, the desire and aspiration to quickly reduce and eliminate poverty will only be a dream. Because mustahik who receive zakat this year will again receive zakat in the following year. In other words, the current mustahik will give birth to new mustahik from their descendants. This of course will not be able to describe that zakat is one of the media to achieve equitable distribution of community welfare (Nurcahya et al., 2019). to become a muzakki (a person who pays tithe).

One form of the BAZNAS program for utilizing zakat funds in a Qardhul
Hasan contract is Baitul Qiradh BAZNAS (BQB) is a program from prosperous Indonesia and part of the program for utilizing zakat, infaq, and shadaqah to improve the welfare of the poor and needy. Baitul Qiradh BAZNAS applies a profit-sharing pattern or sharia so that micro and small businesses are free from the interest system (usury). The products managed by BQB are savings and financing using sharia principles. BQB is expected to help improve the economy of small communities through the sharia economic system, especially Qardhul Hasan. The purpose of BQB is to prepare microfinance service providers for the poor. Table 1. Management of Qardhul Hasan at BAZNAS

Program(s)
The products managed by Baitul Qiradh BAZNAS are savings and financing using the Qardhul Hasan contract as a form of utilizing zakat funds.

Aim(s)
As an institution that provides financing (financial) services to the poor/poor.

Capital Funds
The funds collected by BAZNAS are in the form of Zakat, Infaq and Sadaqah.

Ricipient Criteria
Mustahik Zakat registered by BAZNAS and classified as poor/poor asnaf.

Payback Period
The length of the loan repayment period to Baitul Qiradh BAZNAS is 24 months.

Return Liquidity
Only 20% of the repayments were smooth, and 40% returned even though they could not repay as much as the loan. The remaining 60% does not return.

Fine
There are no fines or sanctions for those who are late in returning the loan. concerned can no longer be assisted for a further productive business. Only 20% of the repayments were smooth, and 40% returned even though they could not repay as much as the loan. The remaining 60% does not return. Someone who is not a poor asnaf cannot get a loan from Baitul Qiradh BAZNAS.

Management of Qardhul Hasan by BWI
Modern waqf has also been developed in the form of cash or cash, where the concept of cash waqf then breaks the stigma of the Muslim community that waqf is not only for the rich. Why is that? Because before the introduction of cash waqf, the Muslim community thought that waqf could only be done with land or buildings. The use of cash waqf is also considered more flexible and easier to distribute compared to waqf in the form of land or buildings.

The existence of waqf management is currently being intensified by
Islamic financial institutions and the government, one of which is the Indonesian Waqf Board (BWI). Waqf is considered to have easier utilization flexibility when compared to the use of zakat funds which are limited in distribution to 8 asnaf that have been determined in the Qur'an (Hadi, 2018;Indah Sulistya, Neneng Hasanah, 2020;Tahiri Jouti, 2019). Waqf has great potential in helping the growth of the national economy. In Saudi Arabia, institutions such as companies have been formed to increase the role of waqf banks in its economy. Bangladesh continues to enlarge the role of the Waqf Bank so that economic inequality and inequality can be reduced. The legendary and oldest campus in the world, Al-Azhar University, shows how waqf plays an important role in education, by providing benefits that benefit the whole world. Other campuses in the West such as Harvard, Oxford, Cambridge, and others emerged from economic work patterns such as waqf (Faujiah, 2020  The implementation of the Qardhul Hasan contract at Islamic Financial Institutions (IFIs) is used in several ways, including (Faujiah, 2020): 1) As a Hajj bailout loan, where prospective Hajj customers are given a bailout loan to meet the requirements for depositing Hajj travel costs. The customer will pay it off before the departure of Hajj; 2) As a cash loan (cash advanced) from sharia credit card products, where customers are given the freedom to withdraw cash belonging to the Bank through ATMs. The customer will return it at the specified time; 3) As a loan to a small businessman, which according to the Bank's calculations, will be burdensome for the entrepreneur if he/she is given financing with an Ijarah sale-purchase scheme or profit sharing; 4) As a loan to the management of the Bank, where the Bank provides this facility to ensure the fulfillment of the needs of the Bank's management. Bank management will return it in installments through deductions from his salary. The financing scheme using the Qardhul Hasan contract can be seen in Figure 2 above. The explanation that describes the financing scheme with the Qardhul Hasan contract is as follows: 1) The customer submits a financing transaction to IFIs using a Qardhul Hasan contract; 2) The IFIs provide financing in the form of business capital (Qardh) to customers to be managed in a form of business activity; 3) The customer returns the funds to IFIs without any interest rate; 4) The profits obtained by the customer after the return of capital will be the full property of the customer. This can cause the mustahiq to be transformed into muzakki so that they can contribute their wealth as zakat, infaq, alms, or waqf (Maskuroh, 2019).

Case Study on BAZNAS Semarang and BAZNAS Tulungagung
The mechanism for distributing Qardhul Hasan funds is regulated by the Semarang Regent Regulation. Mustahiq must submit a written application to the District BAZNAS or BAZNAS Management Agency with the provisions as referred to in Article 21 paragraph 2. Then mustahiq is also expected to fulfill administrative requirements such as completing personal information, description of SMEs or business entities, as well as business financial planning.
Mustahiq will also be interviewed by nazhir BAZNAS Semarang Regency, and nazhir will conduct a review of mustahiq's business location and residence. In addition to the main candidates for receiving Qardhul Hasan loans, BAZNAS Semarang can also determine supporting candidates who can also receive loans under the determination by the Head of the BAZNAS Implementing Agency at the district/city level based on the results of the verification as outlined in the Regulation of the Regent of Semarang (Musyarofah, 2016).
In addition, to BAZNAS Semarang, the IFIS that implements Qardhul Hasan is BAZNAS Tulungagung Regency through the PK 5 revolving capital program to empower micro-business finance for the people of Tulungagung, so that it is possible to advance to class. given a form regarding terms and conditions. This loan is provided with a period of 12 months in installments. The return procedure is regulated by a statement letter signed by the merchant as mustahik (Hudayati & Tohirin, 2019). Whoever, Asri Latifah as the Head of Collection also explained about the amount of distribution fund would be optimalized as long as the Zakat and others fund are can be collected optimally. So, the funds which will later be redistributed in the form of a qardhul hasan contract can also be given to a larger number of people. on. The crowdfunding model designed by researchers can also be developed as a form of investment so that the role of investors is not only to give alms in the form of capital but also to gain profits.

CONCLUSION
Qardhul Hasan is a voluntary loan without the lender's expectation of returning the principal. In addition, while the debtor is obliged to return the principal, the lender is urged, following some sayings of the Prophet Muhammad SAW, not to pressure the debtor if he is unable to repay it by the stipulated time limit. The Qardhul Hasan management mechanism is found in BAZNAS, BWI, and other Islamic financial institutions such as Islamic banking, BMT, and MWB.
The management of zakat funds as Qardhul Hasan also reaps the pros and cons among contemporary Ulama because the distribution of zakat must be given to 8