ZAKAH AS AN ISLAMIC MICRO-FINANCING MECHANISM TO PRODUCTIVE ZAKAH RECIPIENTS
Journal Title: Asian Economic and Financial Review - Year 2014, Vol 4, Issue 1
Abstract
There are various forms of zakah distribution practiced by the zakah institutions. One of them is the distribution of zakah in a form of business capital given to productive zakah recipients. This form of zakah distribution is recognized as micro-financing mechanism. Thus, this paper attempts to analyse the potential of zakah fund as a source of Islamic micro financing to productive zakah recipients. The analysis is divided into several parts. Firstly, this paper discusses on the rationale of zakah fund as a source of micro financing to small Muslim entrepreneurs. It is then followed by the feasibility study of zakah as a micro financing mechanism. Thirdly, this paper shares the practicality analysis of the mechanism by sharing the experience of Selangor Zakah Board (Lembaga Zakat Selangor - LZS). In addition, it also highlights the problems and challenges of LZS in performing the role of ‘micro-finance institution’. Lastly, suggestion on the proper mechanism of zakah micro financing to ensure its effectiveness is given in the final part of the paper. This is to ensure that the objectives of zakah in alleviating poverty and reducing income inequality are met.
Authors and Affiliations
Patmawati Ibrahim| Senior Lecturer, Faculty of Technology Management and Business, Universiti Tun Hussein Onn Malaysia, Johor, Malaysia, Ruziah Ghazali| General Manager, Nordant Management, Taman Sri Bt Caves, Selangor, Malaysia
Keywords
Related Articles
- EP ID EP1997
- DOI -
- Views 433
- Downloads 26
THE PERFORMANCE PERSISTENCE OF WINNER FUND MANAGERS – EVIDENCE FROM THE TIMING AND STOCK PICKING ABILITY
This study aims to investigate the persistence of timing and stock picking ability of ?winner fund managers? instead of winner funds. The sample of this study is the previous and next equity funds which the same fund man...
THE TESTING OF HALL’S PERMANENT INCOME HYPOTHESIS: A CASE STUDY OF PAKISTAN
The objective of this study is to test the Hall’s permanent income hypothesis for Pakistan using annual data from 1992 to 2010. The basic model of permanent income hypothesis (PIH) showed the validity of absolute income...
THE RELATIONSHIP BETWEEN BLOCK HOLDERS AND FIRM DIVIDEND POLICY
Block holders have significant impacts on the firm’s policies, especially strategies regarding the payout policy. The purpose of this study is to investigate the relationship between ownership structure and firm dividend...
ENTREPRENEURSHIP DEVELOPMENT COURSE TO FOSTER CHARACTER MERCHANDISE IN SUPPORT ECONOMIC GROWTH
This paper aims at determining whether or not financial reporting of companies in Malaysia provides useful information to Inland Revenue Board for income tax determination. The respondents in this study were staff of the...
GENDER DISPARITY IN FUNCTIONALITY AND CONSEQUENCE OF MICROFINANCE: DOES IT FUNCTION CURRENTLY?
This study has been designed to represent gender disparity in different issues like adequacy of loan amount, rate of interest, formalities to take loan and consequence of microfinance in poverty alleviation. Both descrip...