Re-blogged from Other Sites Zakat

Zakah as Instrument Islamic Microfinance Mechanism to Productive Zakah Recipients

Baitul Mal Mina

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ZAKAH AS INSTRUMENT ISLAMIC MICROFINANCING MECHANISM TO PRODUCTIVE ZAKAH RECIPIENTS

By: DR.Ahmad Maulidizen, M.Sh.Ec

Editor: Ustaz Sofyan Kaoy Umar, MA, CPIF

Abstract

There are various forms of zakah distribution practiced by the zakah institutions. One of them is the distribution of zakah in the form of business capital given to productive zakah recipients. This form of zakah distribution is recognized as the micro-financing mechanism. Thus, this paper attempts to analyze the potential of zakah fund as a source of Islamic micro financing to productive zakah recipients. The analysis is divided into several parts. Firstly, this paper discusses the rationale of zakah fund as a source of micro-financing to small Muslim entrepreneurs. It is then followed by the feasibility study of zakah as a micro-financing mechanism. Secondly, this paper shares the practicality analysis of the mechanism by sharing the experience of the Selangor Zakat Board. In addition, it also highlights the…

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