Halal assurance climate creation in processing products for micro waqf bank customers *

Purpose — Halal assurance guides Muslims in production and consumption to create a strong belief in utilizing it. This study analyzes the halal assurance climate creation and sharia social financing from micro waqf banks. Method — The research used a qualitative method with a case study approach at the Lan Taburo micro waqf bank, Lebak regency, Banten province, Indonesia. Data sources from managers and customers of food processing businesses using interview techniques and data analysis using triangulation. Result — The research shows that micro waqf banks need instruments like desire to engage in the halal assurance process, becoming the key requirement for customers, incentives for registration, education, and training, direction and monitoring, and evaluation of halal assurance evaluations.Micro waqf banks are sharia social and financial institutions providing financing and micro-small entrepreneurs assistance for productive communities. It is necessary to increase the awareness of managers and customers regarding the importance of halal assurance as an integration of sharia social financing. Contribution — This study recommends the government or financial services authority to implement halal assurance as a requirement for micro waqf bank customers to encourage small micro-entrepreneurs by creating a climate of halal assurance for the processing products.


INTRODUCTION
Running a business is a human obligation to fulfil the necessities of life individually, in a family, or in a group to achieve good (maslaha) for others. The needs humans seek include the need for clothing, food, and shelter through alternative methods and efforts justified by ethics and religion. Fulfilling the needs of human life relies on complementarity according to abilities, skills, and experience in doing business. The dimension of human needs based on material becomes the centre of economic activity (Fellner and Goehmann, 2020). It becomes part of the wealth it acquires, while the immaterial aspect of spiritual needs becomes a status of inner satisfaction.
Islam guides humans on how to do something in a good and lawful way by providing broad benefits in the long term, both sources of business, how to get, how to manage, and get results or products. As a country with the largest Muslim population in the world, Indonesia has not been able to play an optimal role in meeting this demand. On the other hand, halal food continues to increase yearly, which should be a source of economic growth in the region and the world (Nafis, 2019).
Regulations that do not support the halal industry, low literacy and public awareness of halal products, low linkages between halal and the Islamic financial industry, high demand and public consumption, management that has not been optimized, risk management in the halal sector, technology use in the industry that is not optimal, and the implementation of the Indonesian halal standard are obstacles to the development of the halal industry in Indonesia.Very few products are still halal certified (Rahmi, 2020).
There is a rapid demand for halal services and an overall increase in Muslim tourists. The development of halal guarantees becomes an additional source of state revenue. It helps businesses in halal industry destinations, contributing to Islamic financial institutions' restoration, preservation, and development. Unfortunately, this potential and prospects, but not all local governments, take on this critical role (Hakim, 2019).
Most people in Indonesia still have insufficient knowledge and understanding of the perspective of halal tourism, so what to do and how to prepare is an obstacle. The aspects of cleanliness and feasibility of processed products with halal guarantees are also still low, and where most people believe enough by reading bismillah, it has become halal (Devi & Firmansyah, 2019).
Looking at the competitiveness of the combination of demand and supply, Supeno (2019) reveals that competitiveness in the halal industry must be sustainable with one another as a form of expansion covering various sectors Halal assurance climate creation in processing products… Journal of Enterprise and Development (JED), Vol. 5, No. 1s, 2023 JED | 3 such as halal food, clothing, finance, and tourism. Awareness of halal certification is important as a commitment in the halal industry competition. The sharia competency certification scheme in the field of halal tourism refers to competencies and proficiencies based on sharia principles, and professional certification bodies implement the scheme in collaboration with the national sharia board of Indonesia. (Suyudi et al., 2019).
Al-Qur'an contains all sources of order and human guidelines as a guide for believers and a full holy book to explain all supernatural and natural universes so humans can live according to nature. Then what is contained in the Qur'an becomes holy purity (fitrah) so that all humans must guide it to get happiness in this world and the hereafter.
In Islamic understanding, there have been many changes in a misunderstanding of narrow human logic and, therefore, related to noble values and morals, one of which is tourism, which was associated with self-torture and required walking on earth and making the body tired as a punishment for himself or other ascetic terms in the world. Human instincts initially become non-permanent (nomadic) which aims to make it easier to find life and security for himself (Baiddan and Erwati, 2014).
The concept of halal was originally from language or interpreted as 'halla' as a verb that is halal, legal, permissible, permissible, not prohibited, and not locked according to sharia principles themselves. In Islamic law, several scholars argue based on the Qur'an (Kemenag, 2015). That means, "Now we have set you (Muhammad SAW) a clear religious path (sharia), so just follow I am". This understanding implies not following their desires or passions, which are wrong or erroneous in their knowledge and sunnah. The need for tourism becomes a positive thing for the needs of the soul, and piety builds the economy and health and welfare of the community (Wilopo & Hakim, 2017).
Halal means everything permissible according to sharia principles to be consumed and enjoyed. Conversely, haram is everything Allah forbids to be done. Anyone who violates it will receive sanctions or threats in this world and hereafter (LPPOM -MUI, 2008). Thus halal tourism associated with tourism does not cause harm or sin when visiting it.
For a product to be awarded halal certification from the Indonesia Ulama Council (MUI), a halal label must first be approved for inclusion on the product's packaging. Certification as halal for products like food, medicine, and cosmetics is done to provide accurate and precise information to assure that the products are safe for consumers. Maintaining goodness in a product's input, process, and output to give users or consumers clarity and comfort is the goal of the notion of halalness in a product (Fauzi & Saputra, 2022). Halalness refers to the spirit of a particular philosophy.
As one of the manifestations of achieving a prosperous and fair economy for all Indonesian people, since 2017, the financing authority (OJK) has issued regulations regarding sharia microfinance institutions, from now on referred to as Islamic microfinancing institution (LKMS)-micro waqf banks (MWB), from now on referred to as MWB, which aims to expand access to funds or capital as well as financing for low-income people and do not yet have banking services or other formal institutions . This is the hope for increasing people's welfare and reducing economic and social inequality (gaps). In addition, training and business assistance are also provided so that the maximum benefits of this micro waqf bank can be felt.
One of the backgrounds of micro waqf banks being formed, Nugroho and Hilal (2019) considered the role of Islamic banks and Indonesian waqf bodies and their regulations ineffective. For this reason, the government is innovating to establish micro waqf banks. However, it is still constrained by the formation of institutional channels and sources of funds, which are said to violate the pillars of waqf, and names are considered brands only without waqf applications.
As a strategy for the presence of micro waqf banks, they carry out their duties and functions in an alternative way through financial service authority policy instruments that encourage the poor to have economic access through access to financial services without burdening or burdening the community.
In carrying out their activities, micro waqf banks exist as Islamic financial institutions aimed at helping access capital for micro, small businesses that have funding difficulties from banks (Arinta et al., 2020). The financing scheme is based on mutual assistance without grace, which usually uses a qardh contract with the legality of the fatwa of the national sharia council of the Indonesian Ulema Council so that both the sharia and legitimacy are guaranteed.
Meanwhile, according to the OJK (2020), the advantages of micro waqf banks include providing mentoring and training activities, no interest, unsecured capital, non-deposit taking, the lowest profit sharing is equal to 3% per year, promoting financial literacy and inclusion, the concept of joint responsibility, reducing poverty and inequality and avoiding the loan shark trap. For this reason, strategic steps needed to be carried out by micro waqf banks to broaden their goals and objectives so that they are effective in providing social welfare creation, especially for the productive poor.
Halal assurance climate creation in processing products… Journal of Enterprise and Development (JED), Vol. 5, No. 1s, 2023

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However, on the other hand, it shows that there are weaknesses in micro waqf banks, including conditions that vary in each Islamic boarding school are another challenge for the development of MWB and affect the outcome of MWB, limited understanding of MWB program managers which makes program implementation not run according to the MWB business model, and are the potential system maintenance costs that must be prepared (Hasiba et al., 2021).
The importance of involving halal guarantees in micro waqf banks will provide awareness to customers who receive productive business financing that involvement in the halal process is an absolute requirement so that it can provide added value and trust in the products produced.
Islam's production and consumption process closely addresses the broader benefit-oriented (maslaha) halal product guarantee system. For this reason, the government's attention, as regulator and executor, is needed for the interests of halal guarantees to create a conducive and integrated climate with sharia financing because both have the same concept and goal, namely to produce legal certainty for halal assurance.
However, the current system mechanism, where micro waqf banks are essential in increasing waqf literacy through Islamic social and financial institutions, has not created an integrated climate with halal guarantees. Meanwhile, customers receive financing for productive businesses, which are micro-small businesses, creating a climate that links halal guarantees and micro waqf banks in the long run.
Micro Waqf Banks have been regulated in laws and regulations related to Micro Finance Institutions. Implementing sharia provisions is obliged to protect consumer rights in the form of spiritual rights that every Muslim has to practice his religion sincerely. The sharia compliance policy results from the transformation of the DSN-MUI Fatwa and halal assurance system into the form of laws and regulations so that they are more binding and applicable to the business activities of Micro Waqf Banks (Fitri, 2021).
Islamic financial institutions provide training on market analysis and halal guarantees for products produced by MSMEs that are needed to support the development of the community's economy; in addition to providing financing, they must also provide understanding to MSMEs in developing halal guarantees for their businesses (Ismail et al., 2023). It is part of an effort to support Indonesia as a country that has the potential to promote Islamic boarding schoolbased Halal Lifestyle literacy that we are working to strengthen halal small and medium-sized enterprise (MSME) capital through financing from micro waqf bank (Hasanah et al., 2022).
From previous studies, Islamic microfinance institutions and micro waqf banks saw the need for halal guarantee support as part of the promotion and role of MSMEs. However, the difference with this research is the need for requirements for government intervention or financial services authorities for micro waqf banks so that they can create a climate of halal assurance, especially for processed food and beverage products.
Based on the explanations, arguments, and problems above. Researchers assume that micro waqf banks involve many community roles. Hence, this research needs to be carried out, considering the outcomes of halal guarantees and micro waqf banks both have slow growth. This study aims to analyse the climate of halal guarantees for micro waqf bank customers with food processing businesses.

METHOD
The type of research used in this study is qualitative research. According to Creswell (2014), qualitative research is a type of research that researchers carry out to understand the multiple meanings of individual or group experiences in social and historical studies to develop problem-oriented theories or patterns. The approach chosen in this study is a case study, namely scientific activities carried out in a structured and detailed manner to gain in-depth knowledge of a program, event, and activity that occurs in individuals, groups of people, institutions, or organizations (Tracy, 2013).
The research location chosen was the Lan Taburo micro waqf bank in Lebakgedong village, Cipanas subdistrict, Lebak district, Banten province, one of three micro waqf banks in Banten province. Primary data sources were obtained from managers, sharia supervisors, and micro waqf bank customers who receive business financing for processed food products as informants; they chose by purposive sampling.
In interviews, it is necessary to explore the topics that have been determined in detail based on the intent and purpose of the interview using open questions.

Halal Assurance Climate Creation
In a setting with a robust personality, establishing a connection system to form an interconnected system is essential; for this reason, supporting halal assurances through a sustainable linkage is essential. In the past, halal guarantees have been utilised to create a halal ecosystem as one method among many others to establish a halal assurance climate (Sukoso et al., 2020): 1. The government must support the implementation of the halal ecosystem by providing adoption assistance at a level suitable for the operation of a sharia and halal environment. The policy must be implemented on both the macro and micro scales. The government has finished drafting legislation. The Ministry of Labor of Indonesia will establish the Indonesian national work competency standards. In addition, the government can facilitate the halal guarantee finance components. For instance, subsidies and financial help for SMEs pursuing certification.
2. Infrastructure has also been prepared in logistics and halal supply chains, which vary from sector to sector based on logistical conditions and characteristics. In the context of infrastructure as a pillar of the halal industry ecosystem, infrastructure contributes to preparing raw material logistics and the supply chain sector, which will later aid in developing numerous applicable food, pharmaceutical, tourism, cosmetics, and finance industries.
3. Human resources must be bolstered through training and increased knowledge of the significance of halal assurance. This is highly concerning, as many Indonesians are unaware of halal. Raising Indonesians' awareness of halal policies and the significance of halal guarantees can improve and bolster the human resources pillar.
4. Services which include those about finances and funding. The primary challenge faced by Islamic banking is that of distribution. Ultimately, it necessitates contemplation of the legal processes that must be followed to direct money by sharia law. In addition, halal-related business actors, particularly micro, small, and medium-sized enterprises (MSMEs), must be assisted by providing services in the form of assistance.
In addition, halal obligations are gradually implemented, starting from the food and beverage sector, slaughter products and services, medicinal products, cosmetics, and consumer goods. The increase in the number of halal-certified products is in line with the achievement of increasing Indonesia's ranking in the halal food sector at the global level, which was mainly driven by the digitisation of halal certification (Bank Indonesia, 2022).
Regarding the readiness of the halal guarantee system for food consumer products, it is emphasised that its role is very much needed as a form of concern for others. As Octaviani et al. (2020) revealed, the attitude of caring for halal and sharia towards consumers will increase consumption of these products.
From several halal guarantee schemes related to financing Islamic social and financial institutions, the authors consider that building efforts to create a climate is necessary. This is the opinion of KNKS (2019), where halal guarantees for food products and Islamic finance have a strong relationship and are aligned to support integrated halal guarantee efforts. The LPPOM-MUI product halal assurance system explains the instruments involved in the halal certification process on the type of material or material so that the essential points are an important start in the process until the result is obtained. The involvement is in the food industry, packaging, processing, marketing or distribution, management of warehouses, and storage.
The instruments that support the halal guarantee climate include:

Public awareness and participation
Build public awareness and participation in the guarantee process by providing systematic and ongoing assistance. This can be done at small business centres or production and trade areas so that the public perceives that following the halal assurance process is a commitment and a business responsibility. Increased assistance in the halal assurance process will accelerate the community's awareness and participation (Putro et al., 2022).

The main requirement
Regulation in the form of willingness to guarantee halal for the community is a must because this is essential in a climate of sharia financing. Apart from being needed by the community and effort to protect consumers, it also increases the halal business's competitiveness at home and abroad. For this reason, we see that to answer the problem of halal guarantees as an absolute requirement in sharia financing, as it is revealed by Ningrum (2022) that socialisation and synergy are vital components in helping people to understand and know that the main requirement is a shared commitment in the business climate.

Regulation incentive
Understanding the provision of incentive policies in a climate of halal guarantees, where there is the provision of convenience, is the provision of facilities from the government to business actors who use sharia financing to facilitate each of their business activities through guarantees in order to encourage increase and confidence in their business. Zahroh (2020) suggests that in providing incentives for halal guarantees, what is being educated is not only for business actors but for consumers in general, namely the community. This becomes access for anyone to make efforts on halal guarantees.

Training and education
Human resources development is significant in increasing knowledge and skills regarding halal assurance. The existence of training and education in all aspects and periodically will provide an excellent opportunity for halal guarantees to be needed. That indicates that training increases participants' Journal of Enterprise and Development (JED), Vol. 5, No. 1s, 2023 JED | 10 understanding of halal awareness. The motivation of participants who have businesses to carry out halal certification for their products has also increased (Salamah et al., 2018), so the need for follow-up of this activity is the process of facilitating halal assurance. In addition, cooperation for education and training is needed to increase partners' knowledge of the halal certification process and the attitude of increasingly motivated partners to register for halal assurance (Hamidatun & Pujilestari, 2022).

Direction and supervision
The role of coaching and supervision is essential given the policy on consumer protection; this is the responsibility and awareness between producers and consumers. Changes in the halal guarantee system from voluntary to mandatory have legal consequences in the form of mandatory responsibilities carried out by the state because of the state regulating it; the state must also take on a role as a responsibility so that regulation does not lead to arbitrariness or abuse of power. So that mandatory halal guarantee certification does not become an arrangement that only burdens responsibility to the public, producers, and business actors, regulation is needed in the form of a law that regulates how to regulate the guidance and supervision of perfect halal guarantees in the Indonesian legal system (Anggriawan, 2021). For this reason, guidance and supervision are essential to see the balance in halal guarantees between producers and consumers. The existence of proper guidance and supervision of the halal assurance system will have implications for the halalness of a product. It can significantly encourage product sales because it aligns with consumer needs and expectations (Nur, 2021). That means it will increase the economic value of the product and encourage economic growth in a better direction.

Assessments and evaluation
In a climate or system, the role of assessment and evaluation is essential to see whether the current system meets the applicable criteria or standards (Sucipto et al., 2021). Then this role makes efforts to improve in the future. In terms of halal guarantees, the evaluation of products that will be evaluated is inseparable from the existing system so that it gives consumers a sense of security and calm. Some findings create internal doubts where there are halal products that do not meet the criteria, but if a complaint occurs and other reasons are found (Putri et al., 2021). So, if the product does not meet the criteria, it is agreed to handle it using products already in circulation that will be recalled.

Micro waqf bank as sharia social finance
As part of the financial institution that manages sharia social funds, micro waqf banks can also make affiliated Islamic boarding schools collaborate in mentoring and empowering so that beneficiaries can choose to meet the needs of life and their families.
Micro waqf bank was an initiative by the financial services authority for economic and Islamic finance development. Local governments should be able to compile a public report that conveys ideas, policies, structured data, business programs, investment barriers, and challenges in the halal industry sector. Then sharia microfinance institutions and sharia social finance in the form of zakat, infaq, sadaqah, and waqf, education, community economic programs, and economic empowerment programs for Islamic boarding schools (Quraisy et al., 2019).
The purpose of establishing this micro waqf bank is to provide services or access to capital funds for low-income people who still need to develop a network with formal financial institutions. The benefits and potential can increase social welfare and reduce inequality differences among the poor.
In carrying out its functions, according to Fitri (2021), micro waqf banks support people who have difficulty accessing bank financing (unbankable) because they do not meet the requirements known as the '5C's of Credit', including character, capacity, capital, conditions, and guarantees. However, micro waqf banks are working to improve micro-scale financing services, increase economic empowerment and community productivity, increase the income of the poor, and increase their welfare.
Social finance is the capital and ethos that goes into projects, initiatives, and organisations to make a positive social and environmental impact. Social finance institutions and mechanisms include microfinance, crowdfunding, and social impact bonds (Rizzi et al., 2018). b. In categorising productive society as follows: • For people who have achieved basic needs fulfilment in their personal and family lives; • For people who have a productive business, are willing to do business and work, and are passionate about implementing business programs; • For people who are committed to the empowerment program as the target customer for financing are the poor or unable and have not had access to formal financial services.
c. Get the non-deposit-taking category by not managing funds sourced from the community in savings, savings, and deposits. The focus is on the poor through productive financing, empowerment, and assistance originating from profitsharing sharia deposits or financing and service income others in the form of sharia social funds.
They understood how micro waqf bank financing on donors of zakah, infaq, shadaqah and waqf to the number of customers receiving funding. In the macro context, micro waqf banks nationally will increase and develop economic growth and reduce poverty both in quantity and in quality, providing blessings to the assets of both donors and productive financing recipients so that all are productive.
It indicates that micro waqf banks can increase adequate financing, increase abundant financing and increase consumption and savings sustainably and equitably. Ultimately, ZISWAF will increase income and reduce unemployment and poverty so that it becomes an instrument of income distribution that can create inequality (Widiastuti et al., 2019).
Thus, micro waqf banks with processed food producer customers become part of Islamic social and financial institutions to receive financing so that they have awareness and responsibility for the process and create halal assurance for their industry.

CONCLUSION
Creating a climate for halal assurance in micro waqf banks requires instruments including willingness to participate in the halal assurance process, becoming the main requirement for customers, incentives for registration of halal assurance, education and training, direction and supervision, and evaluation of halal Halal assurance climate creation in processing products… Journal of Enterprise and Development (JED), Vol. 5, No. 1s, 2023 JED | 13 assurance assessments. Micro waqf banks are sharia social and financial institutions providing financing and micro-small entrepreneurs assistance for productive communities.
The research implies that creating a halal assurance climate for products processed by micro waqf bank customers will increase public trust in halal products and sharia social financing. The suggestions for the government or financial service authority to encourage micro-small entrepreneurs by halal assurance as a requirement to their business empowering climate creation on micro waqf banks.
In further research, it is necessary to examine the level of concern and compliance of micro waqf bank customers with the halal guarantee system for products utilized or produced and how consumers perceive micro waqf bank customer products towards the application of halal assurance.

ACKNOWLEDGEMENT
We thank to the Lan Taburo Lebakgedong micro waqf bank for allowing researchers to explore the critical role of business financing from Islamic social and financial institutions for halal assurance to the International Conferences of Islamic Economics (ICIE 2023) Islamic Economics and Business Faculty of Mataram State Islamic University of and editor of the Journal of Enterprise and Development (JED) who provided opportunities and technical support in the publication of this journal.