Islamic Financial Institutions Research Articles

Islamic finance principles and performance of micro, small and medium enterprises (MSMEs) in Makindye Division Kampala District Central Uganda

Purpose Micro, small and medium-sized enterprises (MSMEs) are vital for economic growth in developing countries. Yet, little research has explored the link between Islamic principles and MSME performance, especially in Uganda. This study aims to investigate the relationship between Islamic financial principles and MSMEs’ performance in Makindye Division Kampala – Uganda. Design/methodology/approach This study used a correlational research design involving 86 respondents from 30 MSMEs between January and May 2023. Data collected through questionnaires was analyzed with Statistical Package for Social Sciences, examining three independent variables: ethicality, Halal investment and prohibition of riba, in relation to MSME performance. Findings The results revealed significant relationships between these variables and MSME performance. Prohibition of riba (r = 0.296, n = 86, p = 0.006), Halal investments (r = 0.308, n = 86, p = 0.004) and ethical principles (r = 0.283, n = 86, p = 0.008) all exhibited a statistically significant relationship. Regression analysis with R = 0.405, R2 = 0.164 and adjusted R2 = 0.134 indicated that all hypothesized variables were significant predictors of MSME performance. Based on findings, this study rejected the null hypothesis, confirming a moderately positive and significant relationship between Islamic financial principles and MSME performance. Originality/value This study underscores the importance of active involvement from key stakeholders such as the Uganda Halal Bureau, Uganda Muslim Supreme Council, Islamic financial institutions and government agencies in integrating robust support mechanisms for MSMEs into their strategic frameworks. Such efforts could enhance Uganda’s economic landscape, aligning with the experiences of Malaysia and Indonesia in leveraging Islamic principles for economic growth.

Editorial

بسم الله الرحمن الرحيم In the Name of Allah, Most Gracious, Most Merciful Waqf: A Key Islamic Social Finance Instrument Waqf is a key tool of Islamic social finance that has been practised since Islam’s inception as part of Muslims’ religious obligations and benevolence to assist the needy and gain the pleasure of Allah (SWT). In the early years, Islamic social finance was not formally institutionalised within the Islamic economic system, except to a limited extent in a few Muslim-majority countries, which for instance, managed some Islamic social finance tools such as zakat and waqf at the state level. In the early 2000s, there were increasing discussions about the social responsibility of Islamic finance, questioning whether profit should be the sole business objective of Islamic financial institutions or whether they should also be attributed social roles in view of the Islamic philosophical foundations that underpin their establishments. As businesses’ corporate social responsibility (CSR) grew in importance in mainstream discussions, many Islamic financial institutions engaged in CSR-based activities on an ad-hoc basis, as a philanthropic exercise, as they became more profitable, viable and sustainable. This started the trend of mixing the practice of Islamic commercial finance with Islamic social finance. As Islamic finance evolved further, there was an increased realisation that the effectiveness and applications of Islam’s social and philanthropic instruments could be further strengthened by integrating Islamic social finance within mainstream Islamic commercial finance. Thus, there were unified efforts to establish cooperation between charitable instruments and the different sectors of the Islamic finance industry. The commercialisation objective of Islamic social finance instruments has been particularly visible in the waqf sector. Waqf has historically been limited to pursuing only the social interests of the donor, who sought reward in both this world and the afterlife by helping the poor and the needy. In the modern practice of waqf, the social objective is integrated with the profit motive so that the initial waqf capital generates more returns for the beneficiaries. Prominent developments in the modern practice of waqf include the following: · The modern concept of waqf is not limited to immovable assets (e.g., land, orchards, wells) and movable assets (e.g., jewellery, Qur’an, books, equipment) which are donated for charitable purposes. Innovative strategies are adopted today to develop waqf as an alternative asset class by using contemporary forms of wealth such as cash and financial securities. Latest waqf instruments include cash waqf, temporary cash waqf, waqf-banks, waqf-shares, waqf-unit trusts, waqf-venture capital funds, waqf-ṣukūk, and waqf-Islamic real estate investment trusts. Modern structures of waqf introduced professional management of waqf funds that ensures the sustainability of waqf assets and generates better returns to beneficiaries. Innovative and effective channels of investments through Islamic banks, the Islamic capital market and the takāful sector have been used to develop dynamic and progressive waqf projects. An example is the case of myWakaf in Malaysia which leverages on the synergy between the State Islamic Religious Councils (SIRCs) and a consortium of Malaysian Islamic banks to manage waqf investments and channel the investment returns into waqf projects. Utilisation of waqf proceeds are extended beyond the traditional sectors (e.g., mosques, cemeteries, Islamic schools) to provide a wider range of welfare services relevant to current societal needs (e.g., waqf qurban, waqf for funding impactful SMEs, reviving dormant or abandoned waqf assets into productive properties). Modern waqf management introduces good governance that increases transparency and accountability of waqf institutions. Application of technology in the management of waqf has widened the base of waqf donors/investors, thus expanding public participation and increasing the supply of waqf funding.

Linking perceived supervisor listening with OCBIP in Islamic financial institution: multiple mediation approach

Purpose The purpose of this study is to determine the role of perceived supervisor listening (PSL) on employee organizational citizenship behavior Islamic perspective (OCBIP) with several mediating variables as a link. Design/methodology/approach The research was conducted using a purposive sampling technique with a total sample of 100 employees in Islamic financial institutions (IFIs). The collected data were analyzed using SEM-PLS. Findings The results of this study indicate that PSL is one of the factors that can improve OCBIP attitudes among employees of IFIs. In addition, this study also shows the role of job motivation and satisfaction in mediating the relationship between PSL and OCBIP. However, the results do not indicate affective commitment. Practical implications Based on the results of this study, the leadership of IFIs must be able to develop superior attitudes in OCBIP to increase employee motivation and satisfaction and help increase company productivity. Originality/value This study confirms the importance of the role of leaders in shaping positive employee behavior and strengthens the literature related to OCBIP variables that can be used for Islamic-based organizations.

Improvements in the Application of the Tawarruq Munazzam Contract in Malaysian Islamic Banking: An Analysis from a Shariah Perspective

This paper aims to examine the measures taken by selected banks in Malaysia to enhance the implementation of tawarruq munazzam contracts. As a qualitative study, the researcher gathered data through library research and empirical studies. The library research involved analyzing books, articles, and statutes, while the field studies consisted of unstructured interviews with eight participants, including officers and Shariah committees of Islamic Finance Institutions (IFI). The sample group was selected using the purposive sampling method. Consequently, the researcher identified several themes from the interview data, which were subsequently analyzed. Tawarruq munazzam was chosen as a case study due to its prevalence as the most popular financial instrument among Islamic banks in Malaysia. The research findings revealed nine issues related to the tawarruq munazzam contract. Furthermore, the study highlighted the lack of uniformity among the five surveyed banks in terms of their efforts to improve the practice of tawarruq munazzam contracts. Additionally, one unresolved issue identified by the study pertained to the inclusion of wakalah elements. Notably, the study found that one of the banks exhibited the highest level of improvement in the practice of tawarruq munazzam, addressing eight out of the nine issues raised. 

Encouraging Economic Growth Through Islamic Financial Principles in Indonesia

This qualitative study explores the potential of promoting economic growth through Islamic finance principles in Indonesia. Through interviews with key stakeholders, including policymakers, representatives from Islamic financial institutions, and Shariah scholars, perceptions, challenges, opportunities, and strategies related to Islamic finance are examined. The findings highlight the optimism about the role of Islamic finance in driving economic growth, alongside challenges such as regulatory constraints, lack of awareness, and limited product innovation. Strategies for enhancing regulatory frameworks, promoting financial literacy, and fostering innovation and collaboration are discussed as avenues for unlocking the full potential of Islamic finance in Indonesia.

Accad Transformation in the Age of Digitalisation: Challenges and Adaptation in the Context of Islamic Finance

This research explores the challenges and adaptations encountered by Islamic financial institutions, known as Accad, in the age of digitalization within the context of Islamic finance. Through qualitative analysis of interviews with key stakeholders, including Accad executives, Sharia scholars, regulators, and technology experts, the study elucidates the complexities of integrating digital technologies with Sharia principles while navigating regulatory, technological, and customer trust challenges. The findings reveal the multifaceted nature of digitalization challenges for Accad, ranging from Sharia-compliant product innovation to regulatory compliance and talent development. However, Accad have implemented various adaptation strategies, including collaboration with fintech firms, capacity building, customer education, and regulatory engagement, to foster innovation, enhance trust, and navigate the digital transformation landscape effectively. The research contributes to the broader discourse on digitalization in Islamic finance and offers insights for Accad and industry stakeholders to harness the opportunities presented by digitalization while upholding Sharia principles and meeting the evolving needs of Islamic finance customers.

Hybrid Data Mining For Member Determination And Financing Prediction In Syariah Financing Saving And Loan Cooperatives

Syariah Financing Saving And Loan Cooperatives (KSPPS) is an Islamic financial institution aimed at people who are on the lower middle scale to lift the economy of small communities through microfinancing programs. Problems that often occur in member recommendations to get KSPPS financing are often not on target. In addition, The amount of member financing is often problematic due to a lack of analysis, resulting in poor financing instalments. This research aims to present an analysis model for clustering and classification using hybrid data mining algorithms. This research method is using hybrid data mining Algorithms, namely K-Medoids, Naïve Bayes, and k-Nearest Neighbors (k-NN). This study uses the historical dataset of the last two years on KSPPS BMT Dadok Tunggul Hitam as a total of 70 data samples. The analysis parameters consist of income, business, residence Status, financing application, billing history, and balance amount. The best analysis Model will be obtained by comparing the results between Naïve Bayes with K-Medoids, and K-Nearest Neighbor (k-NN) with K-Medoids. The results of this research showed the best performance is using the hybrid Naïve Bayes data mining model with K-Medoids which has an accuracy of 90.91% for data split 70:30, while performance with K-fold cross-validation shows an accuracy of 93.49% using this algorithm. Overall, the results of this study can provide an effective analysis model to determine the status of the loan.

PENYELESAIAN PIUTANG AKAD MURABAHAH MENURUT FATWA DSN NOMOR 47 TAHUN 2005: STUDI PADA BANK SYARIAH INDONESIA KCP LHOKNGA ACEH BESAR

This article aims to analyze the practice of settling murabaha receivables at BSI KCP Lhoknga with a study of Fatwa DSN-NO 47 of 2005. The fatwa provides guidance on sharia principles that must be adhered to in the settlement of murabaha receivables. The analysis is carried out on banking practices in settling murabaha receivables in community life. The aim is to ensure the development of an Islamic banking system that is free from usury. Because at this time there are still many people who think that Islamic banking and conventional banks are the same. This research is written with a conceptual approach, the type of research conducted in writing this scientific work uses a qualitative form, namely data collection in a scientific setting using scientific methods and conducted by scientifically interested people or researchers. The data used are primary data and secondary data. Primary data is obtained from interviews and observations. The results showed that the practice of settling murabahah receivables at BSI KCP Lhoknga seen from the review of DSN-MUI fatwa No. 47 of 2005 discusses the settlement of murabahah receivables for customers who are unable to pay, and the fatwa provides settlement requirements that must be followed as well as the responsibilities of customers and LKS to carry out settlements in accordance with the provisions in the fatwa. Therefore, the settlement practice has complied with the commandments of sharia principles including fairness and transparency in determining the amount of debt that must be paid by the debtor, and the fatwa which also regulates procedures when settling debts in situations of late payment or inability to pay. So, basically this contract is a direct agreement where the desired profit is predetermined. Fatwa DSN-NO 47 of 2005 explains that the settlement must be complied with, such as the object of collateral being sold by the customer at an agreed price and then the customer paying off the remaining forest to the Islamic financial institution (LKS) from the proceeds of the sale.

An exploratory insight into religion based communication in Islamic financial institutions

An exploratory insight into religion based communication in Islamic financial institutions

Linguistic Clarity in Mudharabah Contracts: Ensuring Transparency and Fairness in Indonesian Islamic Financial Institutions

This research aims to analyze the use of language in Sharia financial agreements, with a focus on a case study of mudarabah contracts. Sharia financial agreements play a crucial role in regulating financial transactions in accordance with Sharia principles. In the context of mudarabah contracts, the appropriate and clear use of language becomes a key aspect in maintaining transparency, clarity, and understanding among the parties involved. This research adopts a qualitative method with a case study approach. Research data is collected through document analysis, including mudarabah contract agreements in real practice. The data is then thematically analyzed, focusing on word selection, the use of characteristic clauses, sentence structure, and other language structures in mudarabah contracts. The results of the analysis indicate that the appropriate and clear selection of words in mudarabah contracts is important to reflect Sharia principles and maintain transparency. Furthermore, the use of characteristic clauses helps regulate profit sharing, loss sharing, and the responsibilities of the involved parties. Clear and structured sentence arrangements also ensure clarity and readability of the contract contents. Additionally, the use of distinctive Arabic language structures provides clarity in describing actions that have been taken and instructions that must be followed by the parties involved. This research contributes significantly to understanding the use of language in Sharia financial agreements, particularly in the context of mudarabah contracts. The findings of this research are expected to serve as a reference for practitioners and academics in developing effective Sharia financial agreements in accordance with Sharia principles.

Utilising AI-based Chatbot for Maximising Value and Profitability of Islamic Financial Institutions

global Islamic finance industry has experienced significant growth in recent years, establishing Islamic financial institutions (IFIs) as prominent players in the international financial landscape. To maintain competitiveness and sustainability, IFIs must embrace innovation and explore avenues for maximising their performance. This research aims to investigate the effect of AI-based Chatbots on the value and profitability of IFIs in Organisation of Islamic Cooperation (OIC) countries. The study has employed quantitative methodology, and the data was collected from the Bloomberg database, Thomson Reuters DataStream, World Development Indicators and annual reports of 104 IFIs across 44 OIC countries from 2020 to 2022. Employing the Generalised Method of Moments (GMM), this study investigates the impact of AI-based Chatbots on the value and profitability of IFIs. The findings show a positive impact of Chatbot on Return on Assets (ROA), Return on Equity (ROE), and Tobin’s Q (TBQ). Furthermore, the analysis reveals that variables such as Gross Domestic Product (GDP), institutional size (SIZE), and age (AGE) exhibit positive associations with the value and profitability of IFIs. Conversely, the study identifies Consumer Price Index (CPI) as exerting a negative influence on the value and profitability of IFIs, indicating potential challenges posed by inflationary pressures. IFIs may consider investing in the development and deployment of advanced AI technologies to enhance overall profitability. Keywords: AI-based Chatbot; Profitability; Islamic financial institutions (IFIs); OIC Countries; Dynamic GMM

Islamicity Cultural Performance Index (ICPI) in increasing customer trust in KSPP syariah BMT NU East of Java Indonesia

The development of Islamic financial institutions in Indonesia, notably in East Java, has seen significant growth, particularly with the rise of Islamic Commercial Banks (BUS) and Islamic Business Units (UUS) within conventional financial institutions. The study focuses on assessing the performance of East Java BMT NU Sharia KSPP using the Islamic Cultural Performance Index (ICPI) to enhance customer trust. Employing qualitative methods with descriptive analysis, the research evaluates financial performance from 2017 to 2021. It utilizes the Islamic Performance Index (IPI) approach, examining Profit Sharing Ratio, Equitable Distribution Ratio, and Director-Employee Welfare Ratio. Results demonstrate favorable ratios contributing to customer trust, influenced by aspects like benevolence, integrity, and religious values. While the IPI evaluates financial aspects, the Islamic Cultural Performance Index (ICPI) considers religious values' impact on trust. This study enriches understanding of customer trust dynamics, serving as a resource for enhancing quality learning and analytical frameworks in Islamic finance.

Analytical Study of the Implementation of AAOIFI’s Ethical Standards in the Algerian Islamic Banking System: Assessment and Recommendations

Purpose ‒ The application of ethical requirements is a key way for all stakeholders in the Islamic financial industry to build trust and promote integrity. This study aims to assess the extent to which the Algerian banking system has adopted the ethical standards for Islamic financial transactions issued by the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI).
 Design/Methodology/Approach ‒ This study conducted an analytical reading. It utilised the descriptive approach to present the study's variables and employed the analytical approach to discuss the various concepts and legal regulations that govern the banking sector and to provide recommendations that would help to build a solid foundation for the banking system.
 Findings ‒ The findings revealed that the Algerian monetary authority is committed to gradually promoting Islamic banking regulations in a thoughtful manner. However, the study also found that there is a lack of clarity regarding the adoption of regulatory laws in Algeria for the ethical standards issued by AAOIFI, even within the 2023 Monetary and Banking Act.
 Originality/Value ‒ To the best of the authors’ knowledge, this paper is the first study to assess the extent to which the Algerian banking system has adopted the ethical standards for Islamic financial transactions issued by AAOIFI.
 Research Limitations/Implications ‒ The primary limitation of this research is its exclusive focus on the Algerian banking system and its reliance on secondary data.
 Practical Implications ‒ This research offers valuable insights for those in decision-making roles. It recommends the establishment of a committee of experts to develop standards tailored to the Algerian Islamic banking environment. The committee should be financially independent and under the supervision of the monetary authority. Additionally, the study suggests the issuance of a code of ethics to govern the professional conduct of Islamic banks (IBs) and Islamic financial institutions (IFIs) in accordance with Sharīʿah.

Sustainable Islamic Financial Engineering with Special Reference to Gulf Cooperation Council’s Economies

ABSTRACT Purpose — This paper explores how Islamic economics and finance, when developed as an embedded framework for regenerative development in line with maqāṣid al-Sharīʿah (the objectives of Islamic law), can facilitate the design of sustainable contracts and Islamic financial engineering. This framework provides a mechanism to achieve the paradigm shift advocated by Islamic finance scholars to accommodate the sustainability agenda into the practical applications of Islamic economics and finance. The paper specifically focuses on the Gulf Cooperation Council’s (GCC) economies.    Design/Methodology/Approach — This study employs an analytical research approach to evaluate the compatibility of Islamic social and commercial finance with sustainability objectives. The analysis is primarily qualitative and relies on the One Earth Framework proposed by Simpson et al. (2021) to structure the assessment of opportunities and challenges related to sustainability that Islamic economics and finance in the GCC region can help address. Findings — The paper highlights the potential of Islamic economics and finance as an embedded framework to address sustainability challenges in the GCC countries. By examining the capacity of Islamic finance to accommodate sustainability pathways, it elucidates avenues for integrating sustainable practices within Islamic financial contracts and institutions. Originality/Value — One of the key contributions of this paper is the introduction and development of Islamic economics and finance as an embedded framework. This pioneering concept not only lays the groundwork for a practical mechanism but also signifies a fundamental step in realising the paradigm shift within Islamic finance. This transformative approach enhances the relevance and effectiveness of Islamic finance in fostering sustainability, marking a significant advancement in the field. Research Limitations — While the study provides valuable insights, it primarily follows an analytical approach and does not involve quantitative analysis. It serves as a starting point for further research on the integration of sustainability objectives in Islamic finance. Practical Implications — The paper suggests practical implications for Islamic finance stakeholders, highlighting the potential for sustainable contract design and financial engineering. Keywords — Islamic finance,  Islamic financial engineering, Natural capital, Regenerative development, Sustainable contract design  Article Classification — Conceptual paper

Profitability as a Mediation for Problem Loans, Third-Party Funds, BI Rate on Company Value

This research from 2016 to 2022 intends to understand the relationship between the Islamic banking sector in Indonesia, company value, where profitability is the mediator between non-performing loans and third-party funds, and interest rates. This methodology uses purposive sampling to produce nine samples representing Islamic financial institutions. The criteria is an annual banking report, which can be obtained on the bank's official website or at the OJK. The quantitative descriptive methodology used in this research consists of the Sobel test and panel data regression analysis. Data analysis findings show that while profitability and the BI rate impact a company's value less, non-performing loans and third-party funding do. Profitability is unaffected by BI rates, non-performing loans, and third-party funding. Profitability does not mitigate the effect of third-party financing, non-performing loans, and the BI rate on a company's value.

Contribution of Islamic Finance to Inclusive Growth: A Comparative Study of the West African Economic and Monetary Union (WAEMU) and North African Countries

ABSTRACT
 Purpose — In recent years, economic growth in the West African Economic and Monetary Union (WAEMU) has been positive, but the precariousness of the population has remained virtually unchanged. Thus, the search for inclusive growth should be considered, and that is the subject of this comparative study to determine the contribution of Islamic finance to inclusive growth.
 Design/Methodology/Approach — First, this paper sets up an inclusive growth index to undertake a comparative study between WAEMU countries and North African countries before and after the integration of Islamic finance in order to examine the impact of Islamic finance in these countries. The paper then compares these two areas, WAEMU countries and North African countries, variable-by-variable, using a Student’s t-test over the period 2010–2023. The group of North African countries included in this study is found to have a high Islamic finance development indicator compared to the WAEMU zone.
 Findings — The results show that growth is more inclusive in North African countries. However, the lack of data on Islamic financial institutions operating in the countries examined makes it impossible to determine the extent of their contribution to the economies of these countries.
 Originality/Value — The studies that have dealt with this topic have been limited to the relationship between finance and the components of inclusive growth. Others have chosen the quality of economic growth as the variable for inclusive growth. However, this study goes beyond that by showing the influence of Islamic finance on an index of inclusive growth that takes into account eight components. This adds value to the existing literature.

The mediating effect of perceived value on customer loyalty of BMT NU East Java

Purpose – The purpose of this research is to analyze and examine the effect of Islamic marketing mix, service quality, and product quality on BMT customer loyalty, with perceived value as a mediating variable.Methodology – This study is a quantitative research with 200 samples of BMT NU East Java customers. It uses non-probability sampling, and data collected will be analyzed with the help of SPSS software to obtain statistical correlation and regression techniques (validity test, reliability test, classic assumption test, path analysis, t-test, and trimming test).Findings – The results show that service quality and product quality have a significant effect on perceived value and customer loyalty, while the Islamic marketing mix has no significant effect on perceived value and customer loyalty. Meanwhile, perceived value has a significant effect on customer loyalty. Perceived value can mediate the Islamic Marketing mix, service quality, and product quality variables in customer loyalty.Implications – This research provides input for related parties, especially BMT NU East Java and every further Islamic financial institution, to optimize services and financial products to get more attention from customers, both new customers and old customers.Originality – There is no research that discusses microfinance (BMT NU) using perceived value, product quality, service quality, and Islamic marketing mix as variables. These variables are variable that have most effect on loyalty of microfinance’s consumers.

Zakat-based urban farming: A tool for poverty alleviation, community empowerment, financial inclusion, and food security

Purpose – This study introduces a zakat-based model aimed at poverty reduction and enhancing food security in urban settings. Drawing upon the principles of Islamic social finance, the model integrates urban farming with the utilization of zakat, charity, and corporate social responsibility funds, offering sustainable financial avenues for disadvantaged individuals and social enterprises. The primary objective of this research is to design and pilot test a practical model that not only generates consistent financial income, but also bolsters food security and advances financial inclusion. Methodology – This study reviews various models that have used Zakat funds for economic empowerment, conduct interviews, and hold focus group discussions. It proposes a zakat-based urban farming model for poverty alleviation and community empowerment using the theory of change. In collaboration with a leading Islamic bank in Malaysia, the model was pilot tested across selected residential communities in Malaysia. Finding – The research findings demonstrated positive impacts both at the individual participant level and within the broader community. Serving as a replicable blueprint, this project envisions the transformation of urban spaces into productive landscapes, thereby ensuring sustainable livelihood, amplifying food security, and promoting financial inclusion. Implication – Through this Zakat-based approach, the research underscores the profound impact of urban farming in catalyzing socio-economic change and advancing efforts towards poverty alleviation.Originality – No previous research has introduced and pilot-tested Zakat-based urban farming solutions for Islamic financial institutions as a tool for Poverty Alleviation and financial inclusion

Development of the UAE financial system in a rapidly changing economic landscape

The UAE financial system is the country’s leading non+hydrocarbon sector which has shown good growth in the post–pandemic period. The country’s ability to become a leader in innovative technology not only among the GCC countries but also among the countries in the MENA region is beyond doubt. After the global financial crisis, which also affected the wealthy emirates of Dubai and Abu Dhabi, the UAE government took the vector to create a risk–oriented innovative financial system. The creation of major international financial centers, such as Dubai International Financial Center (DIFC) and Abu Dhabi Global Market (ADGM), was the logical concept for creating the above system. Islamic financial institutions represented in the UAE operate within the framework of clear rules and standards that have been implemented by supervisory and regulatory authorities, precisely to build high–quality and transparent relationships between counterparties not only within one country, but also at the international level.

Assessing the Productivity and Technological Changes of Indonesian Zakat Institutions

Measurement of the productivity level of Islamic financial institutions in Indonesia has been widely carried out. However, not much research with the object of research in Islamic social fund institutions, one of which is zakat institutions in Indonesia. This study tries to measure the productivity performance of zakat institutions. This study uses the Malmquist Productivity Index method with DEAP 2.1 software. Data were obtained from eleven zakat institutions with a five-year research period from 2016 to 2020. This study uses the Malmquist Productivity Index method with DEAP 2.1 software. Data were obtained from eleven zakat institutions with a five-year research period from 2016 to 2020. This study is the first study to calculate the productivity level of eleven Indonesian zakat institutions with a research period of the last five years.