Competency Of Zakat Institution And Minimizing Exclusion Of Potential Zakat Beneficiaries

Abstract

Zakat is the third pillar of Islam. It serves as an important instrument in ensuring equitable economic distribution and an improved standard of living for zakat recipients. However, despite its importance, zakat institutions entrusted to collect and distribute zakat have yet to register a commendable impact in materializing better public welfare and reducing poverty levels. This was evident by excluding potential zakat recipients due to organizational factors and refusing a section of the potential recipients to apply for zakat fund assistance. This led to zakat's objective being compromised and jeopardizing poverty alleviation programs; as such, it is crucial to identify the factors contributing to potential recipients' exclusion and refusal. Furthermore, zakat institutions' policies, guidelines, and processes in distributing and developing zakat should achieve an acceptable level of competency. This study examined the list of poor households from Malaysia's National Databank of Poverty(e-Kasih). It employed poverty and social exclusion theory on institutional exclusion as its main theoretical framework. Opinion based questionnaires using the Likert scale were used to analyze applicants of zakat fund assessment on the activities and processes of zakat institutions. The findings showed that institutional exclusion affects the individual eligible to apply for zakat but is left out because they did not know how to apply or did not want to apply for zakat. Therefore, it is vital to consider about the process of social exclusion since it becomes a drawback to social integration.