Historical development of waqf in Indonesia is in line with the spread of Islam throughout the archipelago. In addition to preach Islam, the scholars also teach waqf to the people. The need for a place of worship, such as mosques encourage Muslims to give up their land as waqf. Call for waqf in the archipelago continues to grow proven by many historic mosques built on waqf land. Along with the development of Islamic societies, the practice of waqf donation progressed from time to time.
Currently waqf has gained serious attention with the publication of Law no. 41 of 2004 on Waqf and PP. 42 of 2006 concerning its implementation.
The development of waqf in Indonesia cannot be separated from the role of BWI (Indonesian Waqf Board). The birth of Indonesian Waqf Board (BWI) is the embodiment of the mandate outlined in Law No. 41 Year 2004 on waqf. The presence of BWI, as described in section 47, is to promote and develop the waqf in Indonesia. For the first time, BWI membership appointed by the President of the Republic of Indonesia, in accordance with Presidential Decree (Presidential Decree) No. 75 / M in 2007, which is set in Jakarta, July 13, 2007. So, BWI is an independent agency to develop waqf in Indonesia in carrying out their duties free from the influence of any authority, and is accountable to the public.
The stagnation of the development waqf in Indonesia began to be dynamic when in 2001 a few practitioners of Islamic economy began to bring a new paradigm to the community about the new concept of cash waqf management to improve the welfare of the people. It turns out that the concept is interesting and able to provide the energy to drive the development stagnation waqf. Then in 2002, the Indonesian Ulema Council (MUI) has welcomed the concept by issuing a fatwa that allow cash waqf (waqf al-nuqud).
MUI fatwa was later reinforced by the presence of Law. 41/2004 concerning on waqf stating that the waqf object is not only non-current assets, but also can be current assets, such as money. In addition, the policy also regulates the waqf in Indonesia, ranging from the formation of Nazhir to waqf property management.
To perform its functions, the law still requires another device, namely Government Regulation and Regulation of the Minister of Religious on Endowments Money (cash waqf PMA), which will become operational guidelines for implementation, as well as the Indonesian Waqf Board (BWI) which will serve as a central waqf nadzir.
The phenomenon of cash waqf has just grown in Indonesia. Some amil zakat and waqf institutions have cash waqf creative programs. Cash Waqf program offered to wakif in Indonesia has a diverse and affordable nominal for the community. By the program, anyone can participate in the cash waqf in Indonesia.
The release of Law No. 41 of waqf is a bright spot in Indonesian waqf. This legislation has divided the waqf property to current assets and non-current assets. Non-current assets include land, buildings, plants, etc. apartment units. Meanwhile, current assets include cash waqf, securities, vehicles, intellectual property rights, lease rights, etc while Nazhir is required to manage and develop the waqf property in accordance with the objectives, functions and purposes. So according to this law, the meaning of productive is to manage waqf property productively so that can achieve the purpose of waqf, whether the object is current assets or non-current assets.
The number of waqf land in Indonesia reached 268,653.67 ha spread over in 366 595 locations throughout Indonesia. From the wide, as much as 49% of the land is not productive.
In order to develop the productive waqf in Indonesia, some waqf institutions create programs with nominal retail waqf ranging from Rp 100 thousand per month. The program aims to solicit funds from the public so that they would put aside part of his property to participate in the program productive waqf.
Productive waqf models in Indonesia is very diverse, ranging from hospitals, schools, shop, warehouse or shop for rent, farms, universities, etc.
On January 8, 2010, the President has launched the National Waqf Money Movement at the State Palace. Presidential policy and decisions will never happen without first considering, pay attention and make sure that the real potential of waqf that can be provided by the 200 million Indonesian Muslims are so great.
Potential waqf even been calculated by various groups who affirm that: as the largest Muslim country in the world, which is about 190 million people, is tremendous potential for the collection of cash waqf. If we assume a minimum of 5% of the number of Muslims put aside assets for cash waqf Rp. 100,000 per month, it will be collected IDR 900 billion per month or IDR 10.8 trillion per year.
Wakif can hand over cash waqf only through Islamic Financial Institutions (LKS)that is appointed by the Minister of Religious Affairs.
Islamic banks in this case do not directly manage the waqf, but partnered with Nazhir (BWI). One way is to invest the cash waqf in Islamic banking products.
There are 7 Islamic Financial Institutions Cash Waqf Recipients (LKS PWU) in Indonesia. The number of collected cash waqf Islamic financial Institutions is increasing from year to year. Based on the data obtained from Indonesian Waqf Board cash waqf Total revenue in 2007 was 10,000,000, an increase of 30,113,000 in 2008, then increased again in 2009 amounted to 463,424,141, 1,673,992,968 in 2010, and had declined in 2011 amounted to 795,863,768. The total waqf of money collected through 2011 amounted to 2,973,393,876.