World Zakat Forum: Harnessing Collective Power to Optimize Funds and Combat Poverty

Zakat funds from around the world are not effective in helping alleviate poverty in Muslim-majority nations.

The issue was raised at the Conference of World Zakah Forum in Bandung, West Java, earlier in the week.

“Twenty-four of the five 57 OIC members Organization of Islamic Cooperation (OIC) require assistance from the humanitarian sector because of conflict and displacement,” said Sikander Khan, Director of the UNICEF emergency relief centre, on Thursday.

A study by The World Bank and the Islamic Research and Training Institute (IRTI) of the Islamic Development Bank (IDB) estimated that the global Zakah fund reached between $550 and $600 billion annually. In contrast, the Zakah institutions that are officially recognized did not manage to collect 10 billion to 15 billion annually.

Khan claimed that the money must be properly managed and strategically channelled through empowerment programs.

Muslims in a few countries subsistence-level. They are impacted by wars and are forced to be in refugee camps.

He claimed the event was an alarm signal for the OIC to develop strategic plans to maximize the potential of Zakah for Muslims who require assistance in humanitarian situations.

Zakah ‘s contribution to reducing poverty and improving the welfare of the Muslim population is a topic still being debated at this year’s World Zakat Forum (WZF), a gathering that Zakah institutions attend across 33 nations.

“There is no data from anywhere that shows how much Zakat fund has helped aid the Muslim people,” added Executive Secretary of WZF Irfan Syauqi Beik.

An organized effort is required to improve the management of Zakah so that it can function optimally. Furthermore, not all of the people of the people in the world’s Muslim population are aware of the fact that zakat could play an important role in helping communities over the long term.

There are Muslims who prefer to pay zakat on their own without undergoing long-term empowerment and management programs.

Furthermore, there is a difference in the fact that not all Muslim countries have accredited Zakat management institutions. In addition, not all countries with Muslim populations have laws governing Zakat.

“Only one-third of WZF member states have laws governing zakat,” Irfan said. Irfan.

However, in several countries – including Indonesia and Malaysia – Irfan claimed that zakat distribution has effectively improved the quality of life of those who receive it.

“It is to say that a lot of individuals cannot decide if the person receiving the zakat is entitled to receive zakat,” said the official.

To boost the contribution of Zakah , WZF has asked its members to participate more in empowerment programs by working with other humanitarian organizations, such as the United Nations Children’s Fund (UNICEF) and the United Nations Development Program (UNDP).

WZF has signed a memorandum of understanding with two agencies relating to the application of funds from Zakah to help reduce poverty as one of the goals in the Sustainable Development Goals (SDGs).

For example, Zakah money was used to build renewable energy power stations for 803 households across four villages in Jambi, Indonesia.

The program has helped more than 5500 persons in 2017, stimulated economic growth, and improved communities’ productivity.

WZF believes that the member countries of SDGs could duplicate similar programs in economics, education, stunting prevention, and many more.

Digitization of Zakah

WZF believes using digital technology is among the methods to maximize the zakat management to achieve the desired goal. In its resolution, WZF demanded all members use the most recent technology for managing Zakah .

The Zakah Foundation of India is one of the organizations that has used technology in collecting and distributing alms.

“No person comes to our offices to make payments for Zakat; all payments are made digitally,” said Mahmud.

Digital technology was said to have increased the visibility of the reception and distribution of Zakah .

“Every afternoon, I receive zakat report via smartphone,” said Mahmud.

“Transparency increases trust among people to the point that they are more likely to give their zakat through the organization.” said the official.

While in Indonesia, Baznas has collaborated with various digital financial platforms to facilitate the payment of Zakah .

Baznas stated that digital channels would account for 30 per cent of the total Zakat collection by 2020 because the trend towards digital Zakat distribution continues to increase.

The issue is that, however, not all of the world’s Muslim population is tech-savvy. Therefore, the goal of digitizing Zakah may not be completely relevant to implement.

Azara Abubakari-Haroun, acting administrator of Zakah Sadaqat Trust Fund Ghana, said 70 per cent of the five million Muslim inhabitants of Ghana are nonliterate and live in poverty.

“That is an issue. If 70 per cent of Muslims remain illiterate, how do we digitalize our economy?” she asked.

Azara realized that the digitization of zakat has to be completed in light of the rapid growth of the world. Azara also stated that Ghana Zakat Institution is working on a program to pay Zakat through direct salary debit.

“[Eighty per cent] from the 1.5 million Muslim population that are eligible to pay Zakah are attracted by this method,” she said.

Concerning this, WZF said it would aid in education and improve the resources available to countries that require assistance in developing the digitization of the Zakah .

“Africa is among our top priorities. We aim to improve education and improve the availability of countries needing assistance. This is the core of WZF,” said Beik.

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