The Effectiveness of Zakat in Reducing Poverty Incident: An Analysis in Kelantan, Malaysia

Abstract

This study attempts to examine the effectiveness of monthly zakat distribution as a mechanism to poverty reduction in the state of Kelantan. The target population of this study is the masakin (poor) and fuqara (hardcore poor) (Note 1) categories of the Kelantan Islamic Religious Department (MAIK) (Note 2) zakat recipients. Simple Random sampling procedure is applied to collect primary data related to zakat recipients from the poor and hardcore poor category of ten districts of Kelantan. The effects of zakat distribution on poverty are analyzed within the context of burden of poverty; specifically in terms of incidence, intensity and severity of poverty. These are examined using four major indices of poverty, which include the Headcount Index, Average Poverty Gap, Income Gap and Sen Index. Results revealed that zakat distribution reduces poverty incidence, reduces the extent of poverty and lessens the severity of poverty. Further, the current zakat distribution in Kelantan only gives a small effect on increasing the income of the poor. Hence, by locating the perfect amount of zakat distribution to eliminate poverty and to offer alternative zakat distribution model is the best way in reducing the income inequality and maximization of social welfare.

Relevansi Sistem Akuntansi Zakat Pada Pengembangan Berkelanjutan Lembaga Amil Zakat di Indonesia

“…Program pengembangan berkelanjutan lembaga amil zakat di Indonesia penting untuk mengkaji zakat secara detail dalam konteks kerangka kelembagaan, dan pengelolaan kinerjanya (Alshater, 2021). Hal ini disebabkan adanya mekanisme penegakan zakat untuk meningkatkan pendapatan dan menyalurkan zakat sesuai sasaran (Ali, 2015). Pada dasarnya penerimaan zakat juga merupakan sumber pendapatan yang dapat digunakan untuk mendukung program pembangunan (Kailani, 2020, Kuran, 2020.…”

Zakat Distribution Priorities in Malaysia: An Analytic Hierarchy Process Analysis

“…However, there are numerous issues associated with zakat management. Ali et al (2015) show that issues concerning the administration of zakat institutions go beyond religious perspectives. The main objective of zakat institutions is to assist Muslims in performing a pillar of Islam and alleviating poverty, thus necessitating zakat to be managed as efficiently as possible.…”

“…However, these efforts should still be stepped up to address poverty rates. Even though zakat institutions in Malaysia appear to assist Muslims, there is still some dissatisfactions over how they are managed (Ali et al, 2015).…”

“…Both distributions complied with maqasid ta'lif qulub (the principle of companionship of hearts) to strengthen their faith in Islam. Ali et al (2015) examine the effectiveness of monthly zakat distributions to the inclined to Islam group in Selangor. The authors use simple sampling on the primary data and analysed it using the Gini coefficient and Lorenz curve.…”

Can Zakat Contribute to Achieving Sustainable Development Goals? A Case Study on Java Island, Indonesia.

“…Several authors argue that the collection and distribution of zakat will contribute to economic growth (Khasandy & Badrudin, 2019;Ridlo & Setyani, 2020;Suprayitno, 2019Suprayitno, , 2020. Other research shows that zakat can reduce poverty gaps, income gaps and poverty levels (Abdelbaki, 2013;Ayuniyyah et al, 2018;Bouanani & Belhadj, 2020;Choiriyah et al, 2020;Embong et al, 2013;Gamon & Tagoranao, 2018;Ali et al, 2015). Other research shows that the targeted distribution of zakat can improve human development (Arwani & Wahdati, 2020;Nurzaman, 2016;Pasha & Pratama, 2021;Widiastuti et al, 2022).…”