A Fresh View On Zakah As A Socio-Financial Tool To Promote Ethics, Eliminate Riba And Reduce Poverty

Abstract

Current statistical data shows that almost all Muslim countries are facing economic and social problems such as the spread of poverty, mounting outstanding external debt due to compound interest and widespread unethical behaviour. Some contemporary scholars relate these problems to the oppression and the crippling policies of former colonial administrations, while others point to the governmental incompetence and corruption that triggered the last Arab spring. However, this paper contends that although the above mentioned issues may have served as catalysts that led to the worsening of socio-economic situation in many countries, the main reason for the overwhelming problems plaguing Muslim countries is their neglect of many Islamic financial and socio-financial duties, including zakah (alms) which is conceived to spread ethical behaviour, eliminate riba (interest), empower the poor and needy and so reduce and may even end poverty. This study aims to demonstrate how zakah, as a socio-financial tool, can help promote sound standards of ethics, generate funds to counter external borrowing endorsed by anti-poverty programmes, empower the poor, and eradicate poverty in Muslim societies. This paper uses a secondary source based meta-analysis of books, articles, journals, annual reports, and websites, besides referring to the Quran and the Sunnah of the Prophet (PBUH) whenever necessary. The findings show it is imperative that zakah to be recognised as an effective socio-financial tool to counter the ills currently plaguing Muslim societies. Adequately managed and distributed zakah can help to promote good ethics, overreliance on external borrowing, empower the poor and end their poverty hence, resulting in a just and a caring society.

A Measurement Model of Successful Muslim Entrepreneur

“…Table 1. A Mohsin (2020) According to the table above, the population of Muslims living below the national poverty line in 2015-2017 was 82.5%, 54.5%, and 54% in Syria, Afghanistan, and Yemen, respectively, and 46.7% in Nigeria, Senegal, and Sudan. Meanwhile, Indonesia had the largest proportion of the Muslim population, reaching 87%, with 28.1% of people living below the national poverty line in 2015(Abdel Mohsin, 2020.…”

“…This was reinforced by previous research by Mohsin (2015), who stated that statistical data in 2009 depicted most of the population living in poverty in Muslim countries. In a recent article, Abdel Mohsin (2020) presented the latest data on widespread poverty in Muslim countries obtained from the World Bank and the CIA, as presented below.…”

Factors influencing the intention to give zakāt on employment income: evidence from the Kingdom of Saudi Arabia

“…Psychologically, it helps in reducing social inequalities in each society by transferring wealth from the affluent to the poor. Thus, zak at works against the concentration of wealth by redistributing it to the less-privileged segments of the society, which would immensely contribute to alleviating poverty (Ismail Abdel Mohsin, 2020). Furthermore, it creates opportunities to improve the life quality and condition of the Muslim Ummah as well as the society at large (Abdullah et al, 2015).…”

“…Zak at is the third fundamental pillar of Islam that plays a crucial role in the redistribution of wealth to the less fortunate Muslim community to eradicate poverty (Ismail Abdel Mohsin, 2020). Zak at is an act of worship that encompasses not just the spiritual aspect but the sociofinancial dimension of individuals and society (Al-Qarad aw ı, 1999).…”

How is the Transparency of Zakat Management Entities in Indonesia?

“…Zakat must be paid to those who have reached the nisab. As a country with a Muslim population of 87% (n=264.9 million) (Mohsin, 2020), the potential amount of zakat is huge. The latest measurement of zakat potential in Indonesia by Puskas (2019) reached an IDR of 233.9 trillion.…”