The Key Success Factors in Empowering Zakat Microentrepreneurs Towards Financial Sustainability

Abstract

Empowering microentrepreneurs is essential for the sustainability of the microfinance ecosystem. As a result of their lack of financial skills, many microentrepreneurs have sought assistance from microfinance institutions. In order to achieve their two-fold goals, microfinance institutions must ensure both financial and social sustainability. This study draws attention to the unique and significant resources accessible in Malaysian Islamic social finance, specifically zakat. The institutions provide nonrepayable micro funds and are responsible to stakeholders for managing zakat funds. A systematic literature review technique was used to analyse and evaluate the existing information and knowledge gaps regarding the key factors that contribute to the empowerment of zakat microentrepreneurs for social sustainability. The analysis reveals five themes: entrepreneur values and interpersonal skills, sound and prudent financial management, corporate governance practices, strong customer service and support, and technology and infrastructure. The study suggests implementing measures to strengthen good governance and effective financial management, interpersonal and customer service competency, and technological adoption to attain financial sustainability.