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14
ZAKAT DISTRIBUTION MANAGEMENT AND POVERTY ISSUES: A STUDY
IN THE STATE OF KEDAH
SOLAHUDDIN ABDUL HAMID1, MOHD AKRAM DAHAMAN@DAHLAN2, MOHAMAD KHADAFI HJ ROFIE3
1 Associate Professor, School of Languages, Civilization and Philosophy, Universiti Utara Malaysia.
(Corresponding author) Email: solah@uum.edu.my Orcid ID: 0000-0002-6711-9335
2 Associate Professor, School of Languages, Civilization and Philosophy, Universiti Utara Malaysia.
Email: akram@uum.edu.my Orcid ID: 0000-0003-3654-6059
3 Associate Professor, School of Languages, Civilization and Philosophy, Universiti Utara Malaysia.
Emai l: khadafi@uum. edu. my Orcid ID: 0000-0001 -8132-213X
Abstract: The poor are known as asnaf and this group of people is often prioritized in the distribution of zakat. However, poverty remains a major issue in the country's socioeconomic development and continues to shackle the community. The study sought to identify the various issues of poverty among the poor asnaf, as well as determine the mechanism used by the Kedah State Zakat Board (LZNK) to address these issues. Data were gathered through interviews with LZNK management representatives and the distribution of questionnaires to 400 asnaf who had received zakat assistance. The survey found that the majority of respondents were pleased with the value and duration of the assistance they received. However, the zakat received cannot lift them out of poverty. In theory, zakat distribution meets the asnaf's daily needs, but in practice, they continue to be reliant on welfare. Hence, effective strategies are needed to address the poverty issues faced by the society.
Keywords: zakat aid distribution, poor asnaf, shackles of poverty.
Table of Contents
Introduction
1. Literature Review
1. 1The Implications of The Zakat Distribution System to the Asnaf Groups
1.2 Asnaf Development Programmes
1.3 The Management of Lembaga Zakat Negeri Kedah
2. Methodology
3. Analysis and Discussion
3.1 LZNK Aid Distribution Programmes
3.2 Zakat Distribution Management and Poverty Issues
3.3 Recommendations
4. Conclusion
5. Acknowledgements
Introduction
Poverty has always been a problem that transcends ethnic, ideological, and religious barriers throughout human history. This problem is widespread not only in least developed countries and developing countries but also developed countries. Poverty is a fact and part of human life. Although no one wills it, this problem continues to persist and will always be a concern. The fight to eradicate poverty is a never-ending issue that has involved scholars and thinkers throughout the ages, each with their own approaches and ideologies. In order to manage poverty concerns more
effectively, a suitable and effective distribution programme management should be developed, particularly among the Malays who are synonymous with poverty in Malaysia.
1. Literature Review
Islamic law forbids the poor or the impoverished from being a marginalized group in the society. The eight groups of asnaf that are eligible for or deserve to be given zakat, in order of priority, are namely the poor (al-fuqara), the needy (al-masakin), zakat administrators (amil), new Muslims (muallaf), those in bondage (captives and slaves) (ar-riqab), the debt-ridden (al-gharim), those who work in the cause of Allah S.W.T, including those who seek knowledge (fi sabilillah) and the wayfarer (those who travel with the purpose permitted by syarak) (ibn sabil). Six of these are economically disadvantaged. Thus, the role of zakat in alleviating poverty is an important issue in Islam.
1.1The Implications of The Zakat Distribution System to the Asnaf Groups
Rahisam Ramli and Patmawati Ibrahim (2010) studied the impact of zakat distribution by Majlis Agama Islam Negeri Sembilan (Negeri Sembilan Islamic Religious Council) on 230 poor and needy people. The study found that the distribution of zakat has the effect of lowering the poverty rate, reducing the poverty gap, narrowing the average poverty gap and improving the ratio of income gap among the respondents. Likewise, Patmawati Ibrahim (2012) discovered that distributing zakat to the poor and needy in the state of Selangor reduced income inequality among them. The result shows that performance of the zakat distribution management system is improving day by day. However, Ili Diyana Yusop's (2013) study on the extent of the effectiveness of the zakat distribution program in assisting socio-economic development in Melaka found that the program is still not fully effective in improving the living standards and development of Muslims in the state over time. The study also found that a significant amount of surplus zakat funds has not been disbursed. According to Ahmad Fahme Mohd Ali (2014), zakat distribution methods in Malaysia that focus on routinely providing visible forms of assistance do not seem to solve the Muslim community's poverty problem. His assumption is that the amount of collection and distribution is constantly increasing, but the number of poor and hardcore poor is also increasing every year due to the drawbacks of some of the distribution methods.
This result is consistent with Mahyuddin Abu Bakar's study (2012), which showed that even though the poor and needy need assistance as mandated by the religion, there is still a problem with how zakat is distributed to them. He said that providing entrepreneurial assistance in the form of equipment to the poor and needy has enabled them to successfully break the cycle of poverty and attain a minimal standard of living, including allowing them to live comfortably, moving above the level of the poor and needy, and having an income exceeding the nisab level. He also made note of the distribution methods, attitude, and monitoring that were discovered as influencing the success or failure of the poor in improving their living standards.
1.2 Asnaf Development Programmes
In theory, the zakat aid distribution succeeded to fulfil the asnaf's daily needs, but in reality, many still rely fully on welfare benefits. Mohd Taib Dora (2000) stated that the asnaf group can only perform tasks that call for low-level basic skills. They also have to put up with poor wage due to the increased demand for highly skilled labour. The asnaf's lack of education and skills necessary for a modern society has prevented them from being integrated into the city's better labour market and economic system. According to Farhana Sidek et al. (2018), the asnaf do experience challenges in a number of areas, not just economically. They continue to struggle with poverty on a variety of levels, to the point where they are at risk of social marginalisation. They find it challenging to make better career decisions due to their low level of education and lack of specialised skills. They are unable to perceive the wider picture since their lives are confined to the people in their immediate circle. Due to the effects of social marginalisation, they feel no need to strive to advance their education or contribute to economic activities.
Furthermore, in addition to the zakat distribution programmes that are earmarked in the form of ongoing assistance such as subsistence, natural disaster contributions, protection from calamities and hardships as well as medical assistance, education funding and urgent housing assistance, zakat funds can also be used to finance long-term development projects such as providing entrepreneurial capital that is capable of making the asnaf independent in the future in advancing their own economy so that they can finally free themselves from poverty.
Mohd Abd Wahab Fatoni's study (2008) found that zakat institutions have been distributing money to asnaf since the 1990s in order to help them start and grow their own businesses. However, only a few states, including the Federal Territory and Selangor, are actively involved in initiatives to transform asnaf into entrepreneurs. In a subsequent study, Hasan Bahrom et al. (2010) discovered that zakat grants given to the poor and needy in the form of business capital can boost income and have the capacity to alter the asnaf's way of life. Hasan Bahrom's study was conducted in and around the states of Pulau Pinang and Selangor. This finding corresponds with the initial study carried out by Hisham Sabri and Zulkifli Hasan (2006), who reported that the Lembaga Zakat Selangor's (Selangor Zakat Board) initiative to establish the Kumpulan Usahawan Asnaf Zakat and Program Hijrah Kerjaya Asnaf not only shaped the entrepreneurial character of the productive asnaf but also provided important information on income generation techniques and motivated other asnaf friends to follow in their successful footsteps.
A study conducted by Azman Ab Rahman et al. (2016) on the asnaf entrepreneurial programmes in Selangor and Kuala Lumpur revealed that these programmes were highly valuable and had a significant impact on the asnaf's economic standing. In addition, these programmes also facilitated in removing the asnaf from poverty and, as a result, can help stimulate the country's economy toward higher income levels. Nor Syafinas Muda (2014) has also conducted a study on 180 poor asnaf who received Bantuan Jaya Diri funding from the Kedah state Zakat Department in order to start a business. The research sought to determine whether the programme can combat poverty and enhance the asnaf standard of living. Findings showed that 42 research respondents (23.3%) were able to escape poverty and earn income exceeding the national Poverty Line Income (PLI). There are three factors that significantly affect the increase in the asnaf income, namely the period of receiving assistance, the types of assistance and the aid received from other agencies. She also advocated for providing the asnaf with adequate capital, entrepreneurship training, guidance, follow-up support, as well as more active monitoring and collaboration with various other agencies.
Azman Ab Rahman (2014) came to the conclusion that the establishment of the asnaf economic and entrepreneurial development programmes had revolutionised the way zakat institutions in Malaysia managed the disbursement of zakat funding. However, the findings of Azman's study demonstrated that monitoring issues as well as a lack of resources—both human and otherwise—were the biggest obstacles to putting these programmes into action. From the perspectives of the recipients, the key factor affecting whether the programmes were successful or unsuccessful was the attitudes, abilities, and knowledge of the zakat recipients. Azman's findings are consistent with Zakaria Bahari's (2011) study which emphasises on the need to ensure that asnaf not only become recipients of zakat every year, but the asnaf also have the capacity to increase their income through the zakat funds received. He also concluded that the asnaf's inability to escape poverty is due in part to their lack of entrepreneurial knowledge, experiences, skills and creativity in producing a marketable product. One significant implication of these studies is that the institution of zakat needs to be more orientated towards providing long-term impact aid for the purpose of eradicating poverty through human resource development. This is because although the poor i.e. the asnaf have been prioritized in the zakat distribution, poverty remains a major issue in society and impedes the nation's socio-economic development process.
1.3 The Management of Lembaga Zakat Negeri Kedah
The institution that is in charge of overseeing zakat funds in the state of Kedah is known as the Lembaga Zakat Negeri Kedah (Kedah State Zakat Board) (LZNK). The management of LZNK is always committed in providing the asnaf in Kedah with proper aids and support. The poor and the hardcore poor are the types of asnaf who are always prioritized in the distribution of zakat funds by the LZNK (See table 1).
Table 1 : Lembaga Zakat Negeri Kedah Distribution Statistics
TAHUN
TYPES OF ASNF 2015 2016 2017 2018
al-fuqara RM8,065,104.00 RM11,791,594.00 RM10,693,481.00 RM165,372.00
al-masakin RM60,350,677.00 RM67,608,579.00 RM70,009,207.00 RM81,638,060.00
muallaf RM1,902,430.00 RM1,680,590.00 RM1,388,810.00 RM2,173,503.00
ar-riqab RM0.00 RM0.00 RM0.00 RM14,600.00
al-gharim RM32,100.00 RM38,098.00 RM57,134.00 RM1,510,834.00
fi sabilillah RM62,585,716.00 RM63,466,777.00 RM52,631,166.00 RM64,392,300.00
Ibn sabil RM189,050.00 RM245,840.00 RM163,810.00 RM223,930.00
Total RM133,125,077.00 RM144,831,478.00 RM134,943,608.00 RM150,118,599.00
LZNK website: https://www.zakatkedah.com.my/statistik-agihan/
The above statistics show that during the last four years, the value of the distribution allocation for the poor asnaf has consistently increased, reaching RM7 257 902.00 (12.02%) in 2016. Even though the annual value only climbed to RM2 400 628.00 (3.55%) in 2017, the allocation distribution pattern continued to demonstrate an upward trend. The annual allocation, however, increased significantly in 2018, reaching RM11 628 853.00 (16.61%). The annual increase in distribution allocation is a manifestation of LZNK prioritising poor asnaf in distribution management. However, according to the Department of Statistics Malaysia's 2019 Household Income and Basic Amenities Survey Report, Kedah ranks fourth (8.8%), in the absolute poverty incident list, after Sabah, Kelantan, and Sarawak in terms of poverty rates by state in Malaysia. Although this ranking has shown an improvement compared to the third position that Kedah held in the previous year, the problem of poverty has clearly been and is still plaguing the predominantly Malay and Muslim communities.
To achieve the goal of addressing poverty more effectively, an exploratory study needs to be conducted so that the various factors and issues of poverty that affect the community can be well understood. The findings of the study could pave the way for a more effective aid distribution scheme that takes into account the diverse basic needs of the asnaf, ease their burden and assist them in rising out of poverty. This study set out to understand how Kedah's asnaf were impacted by their social environment and their ability to cope with poverty in general.
2. Methodology
An exploratory approach was used in this study to establish the background of the poor asnaf based on several dimensions. Both quantitative and qualitative designs were used to obtain complete information to fulfil the research objectives. These research designs were employed to gather descriptive data pertaining to the research population as well as to map out the distribution of actual circumstances and needs of the asnaf in Kedah. Interviews were held with the head of the LZNK distribution division to obtain a true picture of the institution's aid distribution programmes. The questionnaire instrument contains items related to the background of the problems encountered, the diversity of the asnaf needs and their personal perspectives. Selected samples included those who were 50 years and under. The reason is that the asnaf from the age range is assumed to be physically fit and capable to return to work in the near future to support their
families. 400 samples were chosen via purposive sampling from the list of personal data of asnaf who received monthly financial assistance from LZNK.
3. Analysis and Discussion 3.1 LZNK Aid Distribution Programmes
The discussion of this section is based on data from interviews with LZNK Distribution Division management representative and follow-up checks on the LZNK website. Various distribution programmes have been implemented in an effort to support the asnaf in Kedah, particularly among the poor and needy. Seven components of aids were allocated to individuals, with a focus on asnaf development, distribution programmes and education. Individual aids include subsistence assistance, healthcare, housing, business or personal enterprise, natural disaster relief, ummah development. and education (see Table 2).
Table 2: LZNK Aid Distribution Components
No. Component Details
1. Subsistence assistance Subsistence comprises monthly financial aid, monthly food help, annual aid for the poor, a lump sum subsistence, new muallaf start-up, assistance for persons in debt, return travel for graduating students and monetary gifts for newly married muallaf.
2. Healthcare Includes monthly treatment, lump sum treatment, treatment at panel clinics and treatment at haemodialysis centres.
3. Housing Financial aid for construction and repair of a house.
4. Business/Personal enterprise Financial assistance for personal endeavours and sewing skills centres
5. Natural Disaster Relief Includes financial aid for natural disasters
6. Ummah Development No further details were provided
7. Education Includes monthly tuition assistance, early schooling assistance, full fees for Institutes for Higher Education, financial aid for students to pursue their studies at KUIN, selected Institutes for Public Higher Education (IPTA) and foreign universities, educational scholarships at IPTA and medical scholarships in Egypt.
There are four primary programmes in the context of asnaf development. The first is the Sewing Skills Centre (Pusat Kemahiran Jahitan), which is located on the ground floor of the LZNK Tower. The students are given practical training for three months and are paid RM450.00 per month. Due to high demand, the sewing centre was relocated to the Kompleks Pembangunan Asnaf (Asnaf Development Complex). The second programme is Usahawan Zakat Kedah (Kedah Zakat Entrepreneurs) which produces entrepreneurs by providing entrepreneurship training and guidance, advertising, financial assistance and partnerships with various agencies. This programme aims to produce asnaf entrepreneurs who are known for their own products and brands. The third programme provides asnaf children with training and skills. This training programme is designed for asnaf children who receive LZNK monthly assistance. Professional guidance and monitoring are provided to them in order to produce a competitive generation capable of lifting their families out of poverty. Free Market@Zakat Kedah is the fourth programme that is held at the LZNK tower parking area since 2016. LZNK also offers a free Zakat Kedah haemodialysis centre on the ground floor of the tower to improve the health of the poor asnaf. Likewise, LZNK also manages the Pusat Bimbingan dan Latihan Saudara Baru (Newly Converts Coaching and Training Centre) (PUSBA), which
has a capacity of 128 participants and is equipped with various facilities. There are also a variety of educational programmes for students of religious schools and Islamic religious schools (sekolah pondok), as well as a variety of community programmes. In terms of education, particularly, LZNK founded Pondok Moden Zakat Kedah with the intention of creating scholars who are knowledgeable about religion and the outside world and are prepared to lead society and the nation in the future. The strategy to improve the competency of aid distribution is carried out through collaborations with various Bumiputera companies that produce basic necessities such as cooking oil, vermicelli rice, sugar and others. The cost of such essential goods becomes cheaper because LZNK obtains them in bulk without any labels. The goods are then self-labelled in the name of LZNK and are placed in food boxes distributed in the mosques once a month and during disasters.
3.2 Zakat Distribution Management and Poverty Issues
Of the 400 respondents in this study, the majority of asnaf were men (57.5%) and were married (70.8%). The inadequacy of needs among male asnaf will generally also affect the needs of family members under his care. Among the issues raised by respondents were the lack of a stable, permanent job, a lack of education, childcare issues, and unfavourable attitudes that prevent them from breaking free from poverty. The diversity of existing factors becomes more difficult when there is an incident that causes illness or permanent disability to the asnaf. The same circumstance also holds true for 70 (17.5%) full-time housewives who have lost their primary source of support owing to a divorce or husband's passing. In other words, they are unable to support themselves financially. Those who do not own a home are forced to live with relatives, siblings, aunts, and other relatives. The findings show that the asnaf are affected by a variety of factors that keep them bound by poverty.
Based on the respondents' responses, the researcher concluded that the distribution system is highly beneficial and has an impact on the poor asnaf. Most respondents (80%) were satisfied with the duration of the assistance provided to them. The distribution of aid also had a very significant impact on them where 79.3% stated that they were not able to solve their own financial problems without the assistance from LZNK. This programme, however, only offers short-term solutions to meet the asnaf's basic needs. Although the respondents were pleased with the distribution of zakat aid, the programme was unable to lift them out of poverty. The situation is further complicated by the fact that while the number of present asnaf who request zakat aid from LZNK does not decline, there is also a chance that the number of asnaf who require assistance may increase with the addition of fresh applications. The assumption is based on the fact that the majority of respondents (93.8%) who received help that has since expired or is about to expire still hold out hope that LZNK can prolong the duration of aid. Furthermore, 69.8% of respondents expect home monitoring to convince the LZNK so that the value of assistance can be increased and extended in the future.
3.3 Recommendations
The data revealed that most respondents (71.3%) were male (57.5%), aged 50 years and under (92.2%), and in good health. In addition, 369 respondents (92.3%) said they had no issues with family members; 392 respondents (98%) stated that they had good relations with their neighbours; and 389 respondents (97.3%) said their religious beliefs were unaffected. In other words, their gender, age, state of health, and the fact that they had a positive daily living environment indicated that they may still be helped out of poverty. Hence, in addition to the various existing short-term and long-term aid distributions, LZNK must also develop the personality of asnaf by:
i. Transforming asnaf's mind for a better life
ii. Providing the asnaf with appropriate skill trainings
iii. Creating employment opportunities with adequate pay
iv. Producing asnaf entrepreneurs through mentoring and training, financial assistance, infrastructure, and ongoing monitoring.
The form of aid distribution should also be determined based on the classification of specific needs of poor asnaf families, rather than a homogeneous society. To be successful, efforts to lift asnaf out of poverty require the collaboration of individuals, communities, and institutions. The Department of Social Welfare (JKM), the Department of Agriculture, FAMA, Keda, MADA, and other corporate companies or successful entrepreneurs in many industries should all be strategic partners in this programme. The various institutions' expertise and skills should be utilized through courses and training conducted for the asnaf involved. The poor are typically involved in economic development initiatives related to cattle, agriculture, fishing, retail, sewing, food preparation, small and medium enterprises (SMI), and so forth. The concept of "many helping hands" means that LZNK does not develop the socio-economic structure of the ummah as a "one man show", but rather the mechanism introduced should involve a cooperative network of various pertinent government agencies, the private sector, and successful enterpreneurs or individuals.
4. Conclusion
The asnaf assistance distribution programmes offered by the LZNK benefit the poor asnaf and is very beneficial. The majority of respondents said they were content with the assistance provided, but the programmes had not been enough to free them from the chains of poverty. The distribution of zakat assistance should not only uphold the ummah's rights and duties to address the asnaf's immediate needs, but it should also serve as a mechanism for the community's socioeconomic development as well as enhance the Islamic symbols. At the same time, the asnaf s willingness and efforts to leave poverty are significant. The ummah's socioeconomic development agenda is a continuous effort that requires the cooperation from all stakeholders. In order to effectively address the issue of poverty, this programme also needs a policy that brings together LZNK, the local community, and other institutions.
5. Acknowledgements
This research was supported by Lembaga Zakat Negeri Kedah (LZNK) through Institute for Research and Zakat Innovation, Universiti Utara Malaysia (IPIZ-UUM) Research Grant Scheme (SO Code: 14275). Thank you to the LZNK for offering sponsorship to this study.
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