Zakah Funds Research Articles

Pengaruh Activity Ratio, Amil Fund Ratio, dan Growth Ratio terhadap Efisiensi Pengelolaan Dana Zakat pada Organisasi Pengelola Zakat di Indonesia

The purpose of this research is to measure the efficiecy of Zakat Management Organization to manage the zakah fund. And how the Activity Ratio, Amil Fund Ratio, and Growth Ratio affecting the efficiency of Zakat Management Organization. The population used in this research is the Zakat Management Orgnaizations that already operate in national scale and had publish their financial report at least in 2015-2018. Based on those population with purposive sampling method, there are 8 Zakat Management Organization that suitable as research sample. This research used Data Envelopment Analysis to generate the efficiency rate that Zakat Management Organizatoin had. And used Partial Least Square method to measure the ratios effect on Zakat Management Organizations’s efficieny. The result shows that average Zakat Management Organization is already had the maximum efficiency rate on 2015-2018, and had various efficiency rate each year. The result of Partial Least Square Analysis shows that there are positive effect on the three ratio towards Zakat Management Organization’s efficiency.

Bank social fund distribution and cost of profit-sharing investment account: evidence from Indonesia

Purpose - This study aims to prove the impact of the distribution of social funds (qardhul hasan-QH and zakah funds) on the cost of a Profit-Sharing Investment Account (PSIA) immediately and for a long period in Islamic banks.Method - The research is based on panel data from 11 Islamic commercial banks (IB) in Indonesia from 2009 to 2021. Data were analyzed using the generalized least squares (GLS) random-effects method with robust standard error.Result - This research proves that the distribution of social funds (the distribution of QH and zakah funds) has a positive economic impact in the short period but the distribution of social funds has a negative economic impact in the long period.Implication - This study contributes to bank directors in considering the social activities of banks funded by QH funds by considering the effectiveness of social fund distribution, hence having positive economic consequences for bank performance.Originality - This research contributes to the development of previous literature in two ways. First, we use CSR performance proxies that are different from previous studies, namely the distribution of QH and zakah funds. The distribution of these funds is a proof of the bank's legitimacy to care about social, economic, and environmental issues. Second, we use the cost of PSIA as an economic consequence of CSR performance.

Fiqh Muamalah Analysis of the Fundraising Zakah through Conventional Bank Accounts

Collecting zakah funds through conventional banks is vulnerable to elements of usury. Whereas, Islamic legal norms have strictly regulated that all assets must be protected from the element of usury, including Zakah funds. This research analyzes the collection of zakah funds by zakah fund collection institutions which is carried out by giving muzaki (zakah givers) the option to transfer zakah funds using conventional bank accounts. This paper discusses two schemes,i.e: first, the mechanism for collecting zakah funds through conventional bank accounts; second, analyzing the collection of zakah funds from the perspective of Muamalah Fiqh, namely using the Tabarru agreement. The research method uses empirical juridical with a qualitative approach. The results show, the mechanism for collecting zakah funds through conventional bank accounts is that muzakki are given the option to transfer zakah funds to a conventional bank account or sharia bank, which is owned by the institution collecting zakah funds; then the institution collecting zakah funds separates the bank interest from conventional banks for the public needs, such as building roads, public toilets, bridges, etc; and finally distributing it to Mustahiq. According to Fiqh Muamalah, the factors that cause a transaction to be haram are haram because of its substance, haram in addition to its substance and the cancellation of the contract. Meanwhile, the permissibility of a haram transaction must be channelled for social benefit, because this action is better than entrusting non-halal funds to a Sharia Bank.

Mapping the evolution of ZAKAH theme publications years 1964-2021: a bibliometric analysis

PurposeThe increasing number of papers on zakah shows that it has become an important research topic. However, few studies attempt to analyze the evolution of zakah studies which might be helpful as guidance for policymakers in creating zakah management systems and policies, for zakah management organizations administering zakah funds, for future research on related subjects and for academic actors to construct a zakah study curriculum. This study aims to conduct a bibliometric analysis of the evolution of zakah theme publications from 1964 to 2021.Design/methodology/approachThis study uses bibliometric analysis to analyze the evolution of zakah research. This study compared all Scopus-indexed journal papers to Zakah publications regarding research flow, themes, abstracts and titles. The relationships between researchers, the titles of the papers and keywords associated with “zakah” are analyzed in these publications published between 1964 and 2021. A total of 632 scientific contributions were discovered using RStudio and VOSviewer to analyze the bibliometric metadata.FindingsBased on the results, the theme of zakah has evolved from 1964 to 2021. The author emphasizes the zakah publication theme. Each affiliation and country have its conditions, management method, data sources and characteristics. The theme “zakah institutions and zakah collecting” grew in popularity between 2010 and 2021 and is projected to grow in the following years. Malaysia, Indonesia and Pakistan can be used as zakah development research models. In spans of zakah publications, the author with the most global citations is Wahab N.A., and the author with the most productive is Saad Raj.Research limitations/implicationsZakah publications are analyzed using the Scopus database. This study applied only Scopus index data, excluding non-Scopus, and most studies conducted in non-English languages. This conclusion indicates the issue’s importance among academic researchers and practitioners, notably on the subject of zakah. Thus, a comprehensive picture of zakah theme publications assists researchers and zakah fund institutions in making assessments, focusing on the unstudied fraction of the zakah theme.Practical implicationsThis research is planned to serve as a reference for future research, particularly examining the theme’s novelty. It is intended to have implications for policymakers, particularly zakah institutions, regarding funding the several zakah research issues and concentrations.Social implicationsThis research can guide future researchers and is expected to include parameters such as author, year and data source while analyzing zakah publications to generate new findings.Originality/valueThis is probably one of few comprehensive studies that examined the evolution of the zakah theme using the Scopus-indexed database. The relevance of this paper is to provide suggestions and projections for future zakah research. Scholars should examine zakah publications by author, year and data source to gain fresh insights. Search for data sources with high-impact factors and objective metrics, then clear out irrelevant documents to improve the analysis’ quality and findings.

Promoting business zakah as a product of Islamic finance to fund social causes for well-being of the underprivileged: evidence from Bangladesh

PurposeThis study aims to look into the scope of exploring and promoting business zakah for the enhancement of the well-being of the underprivileged in society.Design/methodology/approachThis is mainly a qualitative research conducted using both primary and secondary data. Primary data have been collected from 34 business entrepreneurs in Bangladesh through semi-structured in-depth interviews. The secondary data have been collected from annual reports with a view to calculating business zakah of five business enterprises for providing an indicative picture of prospective volume of business zakah in Bangladesh. Finally, collected qualitative data have been analyzed thematically following the due procedures with a view to addressing the research questions.FindingsThe findings reveal that around thirty five percent of sample entrepreneurs have used business zakah fund for fully and partially financing their social projects. It also reveals that on average annual business zakah fund amounts to nearly 144m BDT (around US$1.7m) per business enterprise. These findings bear clear witness that business zakah has extensive scope and promising prospect to be an instrument of financing social projects aimed at ensuring social well-being of the disadvantaged.Practical implicationsThe findings of this research can be used as a guide to promote business zakah to finance social programs aimed at ensuring the well-being of the underprivileged of all societies particularly of Muslim countries representing one-fourth of the world population.Originality/valueExploring and promoting business zakah as an initiative of broadening the base of zakah is an innovative move and net addition to the literature of Islamic finance. It contributes greatly to the poverty alleviation movement in the sense that Muslim business entrepreneurs will now find their business zakah fund readily available to finance their social projects aimed at ensuring well-being of the impoverished.

Analysis of Efficiency for Zakat Management Organization in Indonesia: A Comparison Study of Super Efficiency and Free Disposal Hull

This research aims to analyze the efficiency level of fourteen Zakat Management Organizations (ZMO) in Indonesia. This study uses a quantitative approach with the method of Free Disposal Hull (FDH) and the Super Efficiency (SE) method. Socialization Expense, Operational Expense, and Salary Expense are the input variables, while zakah fund collection and zakah distribution become the output variables. Empirical findings show that ZMO Corp 4 has the highest efficiency level, which analyzed through both methods of FDH or SE. ZMO managed by the government is the most efficient ZMO compared to the others who managed by private group and social organization. Total Potential Importance (TPI) shows that the output variable that requires the most significant adjustment is the zakat distribution, which is 12.66%

Assessment of the Service Performance of Zakah Institutions in Gombe Metropolis, Nigeria

Zakah is an important tool in Islamic economic system, it plays a crucial role in reducing some social and economic problems such as poverty, unemployment, indebtedness and inequitable redistribution of income in the Muslim communities. The Zakah institutions in Gombe metropolis are said to practice favouritism and unfair service quality and distribution of Zakah funds among recipients. The main objective of this study is to empirically examine perception of the Zakah recipients towards the services provided by the institutions. This study adopted descriptive survey design approach. PLS-SEM is employed to test the hypothesized model of the study. The result reveals that reliability, responsiveness and assurance significantly affect performance of Zakah institutions but tangibility and empathy were found to be insignificant. The study recommends the need for Zakah institutions in Gombe metropolis to consider improving the tangibles and empathy dimensions of service quality. The study also recommends the need to concentrate on the antecedents of service quality as it will assist Zakah institutions to improve performance. Lastly, the study suggests the establishment of Zakah board that will serve as regulatory body in charge of supervising the activities of private Zakah institutions in Gombe state.

The Impact of Inflation on Zakah

AbstractPurpose - This paper aims to reveal how the impact of inflation on zakah can reduce the actual value of zakah collected, study the fiqh about zakah distribution, and apply zakah fund reserves funds not distributed entirely.Methodology - The method used is qualitative with the form of library research (library research). This paper concludes that inflation impacts zakah acceptance; that is, the amount of zakah collected is reduced. The management of zakah by the state in some of the scholars’ reviews turns out to have a more significant positive impact than if zakah is distributed individually by muzaki.Findings - The rule regarding zakah funds reserves, in distributing zakah during the time of the Prophet ﷺ is never to delay the distribution of zakah, the zakah received is then distributed to the asnaf, so that the nature of zakah distribution during the time of the Prophet ﷺ is immediately and distributed without remainder.Keywords: Inflation, Zakah, Zakah Funds Reserves.

Pengaruh Net Profit Margin Dan Rasio Biaya Operasional Pendapatan Operasional Terhadap Kemampuan Zakat

Zakah is one of the social activities carried out by PT. Bank Syariah Mandiri and those who are required to be paid when they reach the nisab. The calculation of zakah funds issued is 2.5% of profit before tax. To find out the ability of a bank to generate relative profits using Net Profit Margin (NPM) and the ratio of Operating Costs to Operating Income based on data obtained from PT. Bank Syariah Mandiri. This research was conducted to determine whether NPM and BOPO affect the zakat ability of PT. Bank Syariah Mandiri both partially and simultaneously. This research is a quantitative study with secondary data with data analysis techniques using multiple linear regression methods. The results of the research partially (t test) state that, NPM has no effect on Zakah. Meanwhile, BOPO has an effect on zakah. NPM and BOPO together have an influence on zakah. Keywords: Net Profit Margin (NPM), and the ratio of Operating Costs to Operational Income (BOPO) Against Zakah.

Zakah as Intervening Variable in Enhancing Sharia Bank in Indonesia

The purpose of this study aims to reveal confidence in Islamic financial institutions as an institution that operates based on sharia principles to provide public welfare with four disclosure indicators, namely Islamic corporate social responsibility, Islamic corporate governance, zakah funds, and financial performance. This study elaborated path analysis calculations to gain a deep understanding on the provided issues. The population in this study included data on the publication of annual financial reports on Islamic banks in Indonesia which are registered with the Financial Services Authority (OJK) with a total of 14 Islamic banks, while the samples were selected according to the provisions of the purposive sampling method. The findings of this study indicate that partially Islamic, corporate social responsibility, Islamic corporate governance, and zakah funds have a positive and significant effect on financial performance. Also, Islamic corporate social responsibility and Islamic corporate governance have a positive and significant effect on financial performance through zakah funds.

Zakah Distribution for The Purpose of Capital Assistance at Zakah Institutions in Malaysia: An Exploratory Study

As prescribed by shari'ah, zakah is distributed to eight (8) groups of asnaf. There are different mechanisms in Malaysia to distribute zakah, such as financial support for living, education, medical, et cetera. One of the financial supports from zakah is to motivate the beneficiary of zakah by supplying zakah fund for business purposes. This study will explore the practise of capital assistance among zakah institutions in Malaysia. The information for this research was gathered through interviews conducted between July and September 2019. The findings indicate that, out of fourteen (14) states in Malaysia, only one state does not include zakah for business purposes, which is Sarawak or Tabung Baitulmal Sarawak.

Digitalization of Mustahiq Economic Empowerment Model based on Productive Zakah Fund

Poverty is a social problem that requires effective and sustainable management. Many parties have made various efforts to overcome poverty. However, the poverty reduction model that was built tended to only use a charitable approach. So that’s only creates a sense of dependence on aid. Poverty reduction requires the involvement of all elements of society, which in a systematic, sustainable, holistic and integrated manner. In line with that, the Islamic economic system offers an alternative in overcoming various socio-economic problems in society, through the instrument of zakah. Although many studies have found that the potential for zakah is very large, the collection and distribution of zakah funds has not been carried out optimally, so that it has not had a significant impact on poverty. Therefore, facing the current development, it is necessary to digitize the proper mustahiq economic empowerment model. The research type used is in the form of field research with a qualitative methods by conducting a deep review of various literatures. The research concludes that the proper digitalization of the mustahiq economic empowerment model can be carried out in a creative productive manner, by distributing a zakah that cannot directly used or spent by the mustahiq. So that the utilization of zakah itself, will have an economic impact on the mustahiq. In order to make this creative productive distribution model runs successfully, it requires coaching and mentoring activities. Coaching and assistance carried out for mustahiq must be adjusted with the era development, through the use of digital technology.

Analysis Of Human Development With The Islamic Human Development Index (IHDI) In West Java Province In 2014-2018

This paper aims to reveal how the impact of inflation on zakah can reduce the actual value of zakah collected, study the fiqh about zakah distribution, and apply zakah fund reserves funds not distributed entirely. The method used is qualitative with the form of library research (library research). This paper concludes that inflation impacts zakah acceptance; the amount of zakah collected is reduced. The management of zakah by the state in some scholars’ reviews turns out to have a more significant positive impact than if zakah is distributed individually by muzaki. The rule regarding zakah funds reserves, in distributing zakah during the time of the Prophet ﷺ is never to delay the distribution of zakah, the zakah received is then distributed to the asnaf, so that the nature of zakah distribution during the time of the Prophet ﷺ is immediately and distributed without remainder.

Zakah compliance in Muslim countries: an economic and socio-psychological perspective

PurposeAlthough Zakah is the cornerstone of the social protection system in Muslim societies, providing relief to those in need and collecting funds from those who have access to money and property, many administrative and legal improvements need to be made to ensure that Zakah funds are managed effectively and efficiently in Muslim states. It is therefore important to recognize why some Muslims are not paying their Zakah through Zakah authorities. The purpose of this paper is to propose a viable and comprehensive research model, derived from an economic and socio-psychological perspective, to provide a richer understanding of Zakah payers’ compliance behaviour.Design/methodology/approachDrawing on extant literature, this study offers a conceptual framework for a better understanding of compliance behaviour by proposing an economic and socio-psychological model based on Fischer’s tax compliance model, which could be applied cautiously in an Islamic setting like Zakah.FindingsThe four main categories of the Fischer model are derived from socio-psychological and economic perspectives, namely, attitude and perception (system fairness, ethics and peer influence); Zakah system structure (Zakah law complexity and law enforcement); non-compliance opportunity (education level, wealth source and occupation); and demographic factors (age and gender). Each has much to offer in understanding Zakah payers’ compliance decisions. To suit the nature of Zakah, the influence of Islamic religiosity and the moderating effect of trust in the Zakah institution are incorporated into the model.Practical implicationsThose Muslim communities that strive to have functional Zakah systems to search for solutions to the perennial problem of low Zakah funding and its damning consequences, are offered a compliance model for systematically assessing Muslims’ compliance behaviour with Zakah provisions. This framework is anticipated to offer invaluable input to policymakers in streaming and strategizing the minimization of losses of Zakah revenue to Zakah authorities.Originality/valueAlthough behavioural models such as the theory of reasoned action and the theory of planned behaviour have been extensively used in Zakah compliance studies, to the best of the authors’ knowledge, this study is perhaps the first to apply a socio-psychological and economic framework, emerging from tax literature, in the Zakah environment to develop fully understanding of Zakah payers’ compliance decisions.

Zakah and its Utilization as Working Capital for Micro, Small and Medium Enterprises

Zakah is an obligation that is directly mandated by Allah in the holy Quran. Zakah is assumed as a solution to overcome the poverty in Indonesia if it is well organized and well utilized. The focus of this study is how to empower zakah productively by distributing zakah fund in the form of working capital to mustahik. This study uses descriptive method that is decribing the condition or facts finding with proper interpretation. The result of the study shows that they are many zakah management agencies practice productive zakah model by distributing the working capital to mustahik so that they are able to change their social status to be muzakki. It can be concluded from this study that productive zakah by giving working capital for the micro, small and medium enterprises is an alternative way and effective effort which get them out of the poverty chain to be independent in economic matters.

Pengelolaan Dan Penyaluran Dana Zakat dalam Program yang Bekerjasama dengan Mitra di Baitul Maal Manfaat Surabaya

This research aimed to find out the way of management and distribution of zakat fund in Manfaat Mitra Mandiri (M3) program existed at Baitul Maal Manfaat Surabaya. The method used was descriptive method with case study. This research also used interview, documentation, and direct observation techniques. The results of the research showed that the management and distribution systems of zakah fund in this program were a co-operation with partners, and then the partners gave the fund to the party of Baitul Maal Manfaat Surabaya to manage. After mustahik has received loan assistance, she must make installment payments on a monthly basis, up to ten months from the time the loan was received. Mustahik would pay the payments and it would be given to the parties of Baitul Maal Manfaat Surabaya, and after that they collected it and gave it back to the partners that were suitable to the Manfaat Mitra Mandiri (M3) program.Keywords:Distribution, Zakah Fund, Baitul Maal, Mustahik

DINAMIKA ZAKAT DALAM TINJAUAN SEJARAH KEINDONESIAAN: KAJIAN POSITIFIKASI DAN IMPLIKASINYA BAGI EKONOMI UMAT

This study aims to outline how it should go back to the era when the charity in terms of its historical context by tracing regulations since the pre-colonial, Kolonia, the old order, a new order and until the era of reform. This study suggests that the zakat law positifikasi believed by many good scholars, Muslim scholars, and charity watchdog, as the best solution for the realization of the optimization of the collection and management of zaka, as one obligation for Muslims. Then the Law no. 38 of 1999 on Zakah Management is aimed at optimizing the distribution of zakat economic equality and development, but it needs to be supported by a business entity Zakah is a modern and professional. Zakah funds should be directed to small businesses run by the majority of the ummah, in this case agriculture, and the livelihoods of the majority of Muslims and people of Indonesia. Thus the charity will be able to influence the economic development of society.

Can Social Performance Improve Financial Performance and Increase Customers’ Trust?

Social concern is strongly emphasized in Islam. There are the concepts of khalifah fil ard, hablum min nass, tawazun in Islam which demonstrate the Islamic approach to concern for social issues. The purpose of this study is to obtain evidence pertaining to whether social concern in Islamic banks has an impact on improving their performance and the trust of customers. The research sample is 11 Islamic commercial banks in Indonesia. The observation period was from 2009 to 2017. The results of this study show that social activities carried out by banks in the form of qardh financing, and the distribution of qardh al-hassan and zakah funds, were able to increase customer trust in the banks. This increase in trust is evidenced by the positive influence of channeling social funds on increasing debt and temporary syirkah funds. However, the distribution of social funds does not have a positive impact on the amount of funding channeled by banks. As a result, the bank's income from the disbursement of finance cannot increase, and the impact of the bank's profitability does not increase. So, it has been proven empirically that the distribution of social funds does not have a positive impact on the amount of financing and profitability as measured by ROA and ROE.

Sustainability of Zakah Distribution in Baitul Mal Aceh: Basic and Implementation Methods

Currently, the working capital for micro businesses is provided by free from the zakah institution in Malaysia. However lately, the amount of zakah distribution by zakah institutions in Malaysia has exceeded the accumulated amount. For long-term planning, among the proposed alternative approach is through the distribution of working capital in the form of micro financing. The question is, what is the substructure and method of implementation? Based on content analysis, the distribution of working capital by microfinance are justified and agreed upon by scholars of zakah . In fact, Baitul Mal Aceh successfully exhibit in the distribution of zakah funds through microfinance. The findings showed that Baitul Mal Aceh regarding the amount of loans had increased by Rp 500 000 on average and the returns were more than 75%. The implication of the distribution of zakah funds through micro financing shows the presence of sustainability in the distribution of zakah funds. In addition, it not just could create a revolving fund, but the distribution of zakah can be done continuously although the amount of zakah collection may be impaired.

Analysis Of Ta’awun Fund Model Best Practice From Indonesia

The Muslim population of Indonesia in 2010 reached 207 million, while the number of poor people reached 27,76 million. On the other hand, Indonesia is prone to natural disaster. By 2015 there are 16,830 villages hit by floods, 3,827 villages experiencing earthquakes, and 7,861 villages experiencing landslides. It is important for Indonesian people to pool fundraising to help each other (ta'awun). One of the schemes is through the microtakaful program. The next issue is the inability of the poor Indonesian to pay a pooling fund. The research is conducted with the aim to analyze the appropriate model of microtakaful in Indonesia using infaq/sadaqah and zakah fund as an alternative payment of subsidy of microtakaful contribution. The research is conducted with several methods, namely the study of in-depth literature on the utilization of infaq/sadaqah and zakah fund. The proposed models of utilization of infaq/sadaqah and zakah fund to subsidy ta’awun fund, validate the model through interviews to experts, practitioners and fund managers, process the data through Analytic Network Process (ANP), and determine the best model in utilizing infaq/sadaqah and zakah fund to subsidy ta’awun fund. Fund management model to become the object of research are microtakaful model and subsidy fund from the government model. The study shows that: Firstly, Ta'awun's fundraising in Indonesia is in line with the shariah objectives of protecting the soul, protecting religion, protecting intellect, protecting wealth, and protecting progeny. Secondly, the microtakaful model implemented in Indonesia is a microtakaful model by institution independently, a microtakaful model with a subsidy from infaq/sadaqahfund, a microtakaful model with a subsidy from zakah funds, ta’awun fund management model with a subsidy from the government and microtakaful model with a subsidy from other institution. Third, an important component in microtakaful is aqad, participant, underwriting process, investment, donor party and facility needs. The proper aqad in ta’awunfundraising is mudharabahmusytarakah.The simple Underwriting process is required. Parties that act as donors are zakah institution and government. Participants as beneficiaries of the contribution are poor and needy. Keywords : Microtakaful, Ta'awun, Zakah, Infaq, Sodaqah