International Journal of Arts and Commerce 1(7), 61-72, 2012

 

ZAKAT AND POVERTY ALLEVIATION   ROLES OF ZAKAT INSTITUTIONS IN MALAYSIA

Farah Aida Ahmad Nadzri, Rashidah Abd Rahman and Normah Omar

Abstract  

In Islam, poverty is defined based on an individual failure to fulfill any of the five basic human requirements   of   life  that   is   based   on   Maqasid  Syariah     i)   religion,   ii)   physical   self,   iii)knowledge, iv) dignity,  and v) wealth. Consistent with the brotherhood concept in Islam, Muslims were strongly encouraged to look after the poor in their community. Thus, in 9AH,the obligation to pay zakat on wealth was received by the Prophet Muhammad (pbuh). History proves that zakat is an effective tool to alleviate poverty as during the period of Umar bin AlKhattab and Umar bin Abdul Aziz poverty is completely eliminated. However, with the fall of Islamic Empire and the increasing European influence during the colonialism period, Zakat Institutions   have   lost   their   glory.  Therefore,   the   objective   of   this   paper   is   to   provide   conceptual   study   on   the   roles   of   zakat   in   alleviating   poverty   especially   in   Malaysia   by examining both theory and practical aspects. It is also suggested that the effectiveness of Zakat Institutions may improve by collaborating with other institutions such as Microfinance Institutions.