PurposeThe purpose of this paper is to investigate and explain the factors underlying the inclination of zakat payers to trust a particular zakat institution.Design/methodology/approachBased on the literature review and experience survey, a context specific questionnaire was developed as the main method of quantitative data collection. The instrument was administered to a sample of Muslim professionals who observe religious seclusion in the last ten days of the Islamic fasting month (itqaf) in 12 purposely selected mosques across four states and the federal capital territory.FindingsDrawn from the resource dependence and legitimacy theories, the study finds that board capital, disclosure practices, governmental model of zakat institution, and stakeholder management were identified through the use of structural equation modeling as being the antecedents of zakat payers' trust.Originality/valueThis paper is the first to report an empirically based model of zakat payers' trust.

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Purpose – This paper aims to investigate the effectiveness of Baitul Maal wat Tamwil (BMT) in reducing poverty. Design/methodology/approach – The case study approach on BMT MMU Sidogiri (located at East Java Province) is taken. Two important and dominating products of BMT MMU Sidogiri (i.e. ba’i bithaman ‘ajil (BBA) and mudarabah) are examined carefully on how much they have helped the customers in reducing their poverty. The paper goes beyond data measurement using descriptive statistics, paired t-test and some poverty measurement indexes such as headcount index; poverty gap; Sen index; and Foster, Greer and Thorbecke Index to investigate the effectiveness of the BMT in reducing poverty. Findings – This paper reveals that BMT financing is effective in reducing poverty. Most of respondents can increase their income after receiving BMT financing. Products of BMT, especially BBA and mudarabah, to empower the poor in various productive businesses have been able to reduce the extent and severity of poverty. This paper also discloses some interesting and important findings related with how BMT’s work, so that it can contribute more to the knowledge enrichment, as well as the development of BMTs, in general, in realising their mission. Originality/value – The establishment of the so-called BMT in the form of an Islamic microfinance is intended initially to effectively help the poor. At present, there are around 3,874 BMTs operating around the country. Although the BMTs have been existing since more than ten years, no research has been conducted to examine their effectiveness in alleviating the poverty. This study in aimed at fulfilling this important gap.

Purpose-The purpose of this paper is to review the accounting treatments for corporate zakat, as advocated by accounting standards and guidelines, as well as those been practised by relevant corporations. The aim is to determine their appropriateness and adherence to both the Islamic as well as the accounting theoretical perspectives. Design/methodology/approach-Accounting standards and guidelines related to zakat, including the Financial Accounting Standard No. 9 and the Technical Release i-1, are examined. Additionally, analyses are made on the practices of Islamic financial institutions to determine their compliance with both standards and ontological aspects of zakat. Findings-The study reveals that there is a general misconception of zakat, as indicated in several standards and guidelines, which has consequently resulted in inappropriateness in their proposed corporate zakat recognition and measurement and hence presentations. These inaccuracies, in one way or another, have not been in line with the true spirit of zakat in Islam. More worryingly, some unfavorable consequences may and in fact have already been implicated on the larger Muslim community as a result. Research limitations/implications-An alternative view on the accounting treatment of corporate zakat is offered in this paper with the aim to provide a fair and proper assessment of zakat on corporate wealth, which is more parallel to the true spirit of zakat. Originality/value-The paper integrates both the revealed and the contemporary accounting knowledge in scrutinizing the standards and practices as well as in recommending an improved and meaningful alternative.

The Islamic financial institutions generally, and the Islamic banks particularly have been interesting phenomena for about last two or three decades. They are believed [by many] to be an interesting, challenging and promising model of the current or conventional financial systems. In the case of Indonesia, despite of the fact that there are two official types of Islamic bank, as they are accommodated by Banking Act No. 7 1992, as well as Banking Act No. 10 1998, there is an additional type as what so-called Baitul Maal wat Tamwil, or abbreviated as BMT.BMTs have even attracted more attention. First, because they are generally unregistered under the normal practice rule such as Central Bank. Second, they have developed very significantly in quantity and spread in very wide areas of different provinces. Currently, there are about two thousand BMTs around the country. This indicates that BMTs have been contributing to the national economy. Third, although the country is hit by the crisis, many BMTs operate smoothly. This is contrary to what might be seen in the fact faced by many formal conventional banks.Based on the above factors, we are interested in investigating what the influencing factors are behind the good performance of BMTs in general. This is the main objective of this study. To answer the research problems, the data were collected from the best 47 BMTs in five different provinces, i.e., West Java, Jakarta Special Territory of Capital, Middle Java, Special Region of Yogyakarta, and East Java. The simple descriptive, as well as the regression analysis, was applied.It is found that there are four main influencing factors. They are the salary rate of management, the education and the management skill of personnel's involved in daily operation and the product attributes. Other factors predicted at the beginning [such as working hours, the number of products] are found to have a negative correlation to the BMT's performance. One important implication of these finding is that there is a serious need to improve the management skill as well as the need to refine the managers' rate of salary.