International Journal of Zakat Vol.

4(2) 2019 page 1-12

Investigating the Impact of Zakat on Poverty Alleviation:

A Case from West Sumatra, Indonesia

Dian Fitriarni Sari, Irfan Syauqi Beik and Wiwiek Rindayati

IPB University

ABSTRACT

Muslim population in West Sumatra is vast, thus, it has significant potential of zakat. In
the province, the regulation of compulsory zakat which is directly deducted from the local
State Civil Apparatus (ASN) salaries has been practiced. This regulation has a positive
impact on the collection of zakat funds in West Sumatra, yet the position of zakat in
reducing poverty in the province demands a discussion in scholarly work. This study
appointed 200 respondents and employed poverty indicators to investigate the impact of
Zakat on poverty alleviation in the province. The results indicated that zakat promotes
poverty reduction. This research also proves concisely the poor can exit the poverty line
with Zakat. This work implies the role of government in supporting Zakat as monetary
tool in poverty alleviation.

Keyword: Zakat, West Sumatera, Exit Poverty, BAZNAS

INTRODUCTION to be significant enough to achieve the

target in reducing poverty (Kahf, 1997).
Poverty is an individual situation, not Zakat is included as the third pillar of
individual characteristics or behavioural Islam. Zakat in Islam is not just worship
patterns (Watt, 1968). This point of view and virtue but also an important role in
leads to the definition of poverty as a economic growth that has an impact on
situation where individual consumption the people welfare.
is minimal, while prosperity is defined as Indonesia as the fourth-largest
a situation where there is a slight population in the world with 87.21
narrowing of consumption. Poverty is percent is Muslim (Ministry of Religion,
most often classified as something 2016). Of the percentage of Indonesian
chronic and temporary (Murdoch, 1994). poor population is 9.41 per cent. In
Poverty is still an interesting topic general, this indicates that the
discussed in the field of research. One Indonesian Muslim population with
way to calculate the depth of poverty is poverty levels can be balanced with the
by measuring the poverty gap, existence of zakat.
measuring how far the average poor Based on research by Firdaus et.
person or poor family is below poverty al. (2012), the potential of national zakat
thresholds. Islam has Zakat as an in 2011 reached 3.4 percent of total gross
instrument to reduce poverty. domestic product, or in other words the
Hassan and Khan (2007) said that potential of zakat in Indonesia was
Zakat is one of the most powerful tool in estimated at Rp.16.6 billion. The
poverty alleviation. Zakat yield is potential of zakat in Indonesia described
enough to cover needs. That is, the is not yet supported by the collection of
assumption of zakat must be based on zakat fund (Puskas BAZNAS 2019). The
Shariah opinion which allows the results latest data shows that there is a gap
2 International Journal of Zakat Vol. 4(2) 2019

between the potential of zakat and its 2016),with a percentage of poverty of

collection. This can be seen from the data 6.42 per cent. This certainly supports the
on the collection of national zakat, by the existence of a large potential of zakat of
official zakat management organization Rp.120.7 million UD West Sumatra
in 2015 which reached Rp. 252.8 million (Firdaus et. al. 2012). The zakat fund in
or less than 1.3 percent of its potential Indonesia is managed by the national
(Puskas BAZNAS, 2016). board of zakat, Republic of Indonesia
One of the provinces in Indonesia (BAZNAS). This institution is operated
which has considerable potential is West in the nationwide of Indonesia.
Sumatra with a population of more than BAZNAS West Sumatra is one of the
5 million people where 97.42 per cent is institutions that has been collecting the
Muslim (Ministry of Religion, highest amount of zakat funds.

Table 1. Total Collection and Distribution of Zakat Funds in BAZNAS West Sumatra
2013-2018

Percentage Percentage
Collected Zakat Distributed Zakat
Years difference difference
Funds (Rupiah) Funds (Rupiah)
(%) (%)
2013 5 698 039 385 - 4 313 818 278 -
2014 6 826 525 113 0.19 5 069 317 746 0.17
2015 7 463 013 735 0.09 5 966 826 320 0.17
2016 11 149 385 130 0.49 6 845 752 500 0.14
2017 8 519 615 809 -0.23 8 838 308 200 0.29
2018 12 815 438 981 0.50 8 134 607 000 -0.07

Source: BAZNAS Province of West Sumatra 2018

Table 1 informs that there is an institutions from Zakat, almsgiving and

increase in zakat funds collected from endowments to fight poverty. Therefore,
2013 to 2017 in BAZNAS West this study aims to investigate the impact
Sumatra. In the previous research on of zakat on poverty alleviation, with a
zakat as a reduction in poverty by Hassan special case from West Sumatra,
and Khan (2007), it is mentioned that; Indonesia.
1) Zakat can alleviate the targeted
budget category for poverty
alleviation for other budget LITERATURE REVIEW
needs.
2) Zakat can increase the potential Zaim (1989) and Powell (2010)
for taxation through increased explained that Zakat can be literally
productivity, employment and translated as “purity” or, in verbal form
results. “to be pure”. In the context of English,
zakat is usually translated as
Various policies and strategies “almsgiving”, meanwhile in al-Qur’an, it
have been adopted to reduce poverty, but refers to as ease the burden of the poor,
the fact remains that poverty still exists. as money, food, or clothing; charity gift
Muslim countries inherit powerful (Powell, 2010; Bukowski, 2014).
Investigating the Impact of Zakat on Poverty Alleviation:…… 3

In a simplified context, zakat is a mandatory zakat deduction on the

an obligation imposed on a Muslim who income of all Muslims. In the country,
has attained Nisab and must pay 2.5 Zakat management is under the authority
percent of the income he gets for one of the state government.
year. The Payment of zakat can be in the The concept of zakat itself is a
form of property owned. The 2.5 percent fundamental basis for Islamic economics
is not a fixed amount and may be to bring a balance between rich and poor
modified depending on the property people and also to strengthen the
subject to zakat. nation’s entire economy and a large
Zakat has a positive effect on worldview (Al-Mamun & Haque, 2015).
economic growth. Paying Zakat However, like a strategy to reduce
promotes the growth of faith and poverty, the capacity of the poor must be
economic growth. As a redistribution of developed through health, education,
income and wealth and reducing the vocational training facilities, and others.
phenomenon of inflation and poverty, So that poor people can get out of trap
other social and economic problems. poverty. In addition, business
Miah (1992), Sarea (2012), entrepreneurship must also be developed
Bukowski (2014), Bakar & Rahman based on priority.
(2007) elaborated that zakat serves as a The entrepreneurship
unique mechanism for mandatory development program has the possibility
transfers of income and wealth to bridge to not only eliminate poverty but also
the gap between the rich and the poor in create employment opportunities for
society. Zakat can gradually increase poor people. Proper payment of zakat
employment and income in the amount with the right method to
economy, thereby increasing people’s eliminate poverty from Muslim
living standards and ultimately communities will ultimately help bring
increasing the aggregate volume of zakat peace, harmony and prosperity to the
collections. On this point, zakat has a Muslim world (Hoque, et al., 2015).
positive impact on the rate of economic In the study done by Shirazi
growth in terms of poverty alleviation (2014), it was highlighted the critical
and reduction of unemployment role of zakat in poverty alleviation in
(Ahmad, 1989). Bangladeshi context. In that, zakat funds
Study in Bangladesh by Hassan is believed to replace government budget
and Khan (2007) found that the good expenditures in the range of 21 percent
management of zakat can reduce of the Annual Development Plan (ADP).
international monetary assistance (debt), Furthermore, zakat can increase
which significantly reduce the national productivity, employment, and output
debt (Hassan & Khan, 2007). Some which consequently will increase the
economists project that in 2004 to 2005, government’s tax potential.
the potential of zakat funds could Unfortunately, the government and the
contribute in reaching 43 percent of global stakeholders seem to be less
Bangladesh’s annual development plan aware to include zakat as an instrument
(Shirazi & Amin, 2009). of poverty alleviation.
The following study in Malaysia Regarding zakat distribution, it
illustrates the approach to strengthening has a significant and positive influence
the existence of the zakat system in on increasing income distribution for the
Malaysia’s socio-economic developent. poor and needy (Ali et. al., 2013). In a
It is similar to a tax deduction on salaries, study with the Human Development
4 International Journal of Zakat Vol. 4(2) 2019

Index (HDI), it can be concluded that household. Based on secondary data, the
there was indeed an increase in the HDI amount of data used is 200 respondents
of Mustahiks (zakat recipients) taken from all cities and regencies in
households in the period being observed. West Sumatra, Indonesia.
There are several possible reasons why This study uses the method of
Mustahiks who received productive calculating the Poverty Indicator and
zakat assistance are improved their Average Time Taken to Exit Poverty.
welfare status. In this regard, it is due to The analysis of this study assesses how
the investments in productive capital, in the positive impact of zakat on poverty
addition to having microfinance which and also calculates how many years the
can encourage growth in income and community estimates can get out of the
fulfill basic needs. Further, an cycle of poverty.
appropriate training and empowerment
programs can also be essential factors to Analysis of Poverty Indicators
strengthen household awareness in
having good education (Nurzaman, According to Foster, Greer and
2016). Thorbecke (1984), there are several
Furthermore, Kasri (2017) studies of poverty defined by ethnicity,
discussed the Determinants of Poverty geography, or other lines. Such an
among zakat recipients in Indonesia approach to poverty analysis places
using household level analysis. The requirements on poverty measures in
results show that the lower the age, the addition to those proposed by Sen
lower the education, the less formal (1979). In particular, the question of how
employment, the smaller the size of the to measure the linking of subgroup
household, are related to the higher poverty with extreme poverty is very
probability of being poor. The results important for its application in the form
show that such group of people should be of analysis. At the very least, one would
the main target of zakat distribution, expect that a reduction in the poverty rate
notably in Indonesia’s context. of a ceteris paribus subgroup must
As explained in the above texts, reduce poverty for the population as a
it is evident that zakat has been found to whole.
positively impact on transforming its There are many analysis
recipients into the group of people with calculations for poverty but using
financially stable. This study aims to poverty indicators we can also explain
extend the evidence from West Sumatra, how many households are still
Indonesia in that regard. categorized as poverty and depth of
poverty. The Central Statistics Agency
(BPS) uses several general indicators to
RESEARCH METHODOLOGY measure poverty and inequality, namely
the ‘headcount ratio’, the ‘poverty gap
The main data used in this study are index’, and ‘the sen index’ and the ‘FGT
primary data from community surveys Index’. Meanwhile, according to Beik
with respondents who have income and Arsyianti (2016), to measure the
below the poverty line and receive level of poverty in a region, some
assistance from zakat funds. Primary differences need to be taken into
data is taken using a questionnaire that account, for instance, the distance
provides information about the between the average poor household and
characteristics of the respondent’s the poverty line. In terms of measuring
poverty levels also need to be considered
Investigating the Impact of Zakat on Poverty Alleviation:…… 5

between poor households. Poverty with income below the poverty line. In
alleviation programs have been well other words, the smaller the headcount
distributed to accumulate in certain ratio of the index, the fewer the number
groups. The following general poverty of poor people.
indicators are as follows:
Poverty Gap Index (P1) and Income Gap
Headcount ratio (H) Index (I)
Headcount Ratio Index is a poverty The poverty gap index (poverty
indicator that measures the number of reduction) and income gap index
poor people below the poverty line. The (income) are gauges used to identify and
way to assess the level of poverty in any measure poverty levels. the poverty gap
community is to obtain a modest number index is used to measure the difference
of poor people. Poor people are those between the average income of poor
whose income falls low of the specified households below the poverty line and
poverty line (UNDP 2009). In this study, the poverty line. Beik and Arsyianti
the poor category was based on the (2016) cite this program is needed to
poverty line standard issued by the determine the amount of funds needed
Indonesian Central Bureau of Statistics. by a program or cash transfer policy or
This indicator is used to calculate the government to transfer people. the
percentage of poor people in an calculation formula is as follows:
observation population. For this ratio
𝑞 𝑧−𝑦𝑖
calculation: 𝑃1= ∑𝑖=1
𝑞
𝑞
H=𝑛 Information:
P1 = poverty gap index
Information: z = Poverty Line
H = The ratio of the number of yi = 1st household income
employees (0 to 1) q = Number of households that
q = Number of Households that have income below the poverty
Have Income Below the line.
Poverty Line
n = Total population If after the distribution of zakat,
then the value of this index will decrease,
The family poverty line is meaning that zakat has a positive
obtained from multiplying the per capita meaning on the submission of poverty
poverty line per month with the average levels. Or in other words, the smaller this
family size of the poverty line of West index, the less the difference between the
Sumatra Province is Rp. 476 554. The aggregate income of the poor and the
headcount usage ratio index in this study poverty line is getting better.
aims to calculate the number of Furthermore, the Income Gap
households receiving zakat higher than Index is used to calculate the percentage
the poverty line and can determine the of poor households whose opinions
number of mustahik that can be obtained depend below the poverty line. The
through the utilization of zakat. If the smaller the index value, the fewer poor
value of the headcount index is reduced, households in the community. This
it means that the utilization of zakat has second index can represent the success
a positive influence, because it can of a program. The following income gap
reduce the number of mustahik living formula is as follows:
6 International Journal of Zakat Vol. 4(2) 2019

𝑔𝑖
I = ∑𝑖=∈𝑆(𝑧) Beik and Arsyianti (2016)
𝑞𝑧
explained that the Sen Index formula
Information: (P2) above is a combination of three
I = Income gap index indices namely the headcount ratio, the
gi = z - yi (Difference in income income gap ratio, and the Gini
between poor households with coefficient of the poor population. P2 is
poverty line, yi <z) worth 0 if there are no more households
z = Poverty line that have income below the poverty line,
yi = Income of household number i and value 1 if all households have
q = Number of mustahik income below the poverty line. While the
households that are below the FGT Index is the development of the
poverty line Poverty Gap Index (P1), which can be
used to see total poverty equal to the
Sen Poverty Index (P2) and The Foster- weighted average of poverty in the
Greer-Thorbecke (FGT) Index (P3) population subgroup.
There are two types of indicators that can Murniati and Beik (2014) added
illustrate the level of expenditure that the smaller the value of the FGT
inequality among the poor, namely Sen Index, the smaller the percentage of poor
Index (P2) and FGT Index (P3). The households, the gap between the
second indicator formula is as follows: aggregate income of poor households
and the poverty line is also less, and the
𝑃2 = 𝐻 [𝐼 + (1 − 𝐼)𝐺𝑝 ] income gap is getting smaller. If after the
utilisation of zakat, the value of this
Information: index has decreased, meaning that zakat
P2 = Sen Index has a positive impact in reducing the
H = Headcount ratio severity of poverty.
I = Income gap index
Gp = This poor coefficient of gini Analysis of Average Time Taken to Exit
Poverty
The Foster-Greer-Thorbecke
(FGT) index is based on the gap Morduch (1998) introduced a method for
normalized gi = (z-yi)/z from poor measuring the average time needed by
people i, who lack income which is households to reach a particular poverty
stated as part of the poverty line. See gi line or regardless of poverty called
as a measure of individual poverty for Average time taken to exit poverty. This
the poor. Here is the FGT Index formula: method makes it possible to describe the
potential for future economic growth as
1 𝑔 𝛼 well as the basis of appropriate economic
𝑃3 = 𝑛 ∑𝑎𝑖=1 | 𝑧𝑖 |
policy in the future. Morduch (1998)
Information: shows that only dividing the Watts size
𝑃3 = FGT Index by some hypothetical growth rates g,
𝑛 = Number of households where g> 0, gives an interesting cardinal
observed interpretation.
𝑧 = poverty line The modified index reflects the
𝑔𝑖 = Short-fall income of the i poor number of years a population needs to
population get out of poverty needed to ensure all
α = Sensitivity parameter with a income grows at the “g” level. Thus,
value of ≥0 providing a simple metric of potential
economic growth to reduce poverty and
Investigating the Impact of Zakat on Poverty Alleviation:…… 7

in this way can help to illuminate the RESULTS AND DISCUSSIONS

contested policy debate. The method of
calculating this method is formulated as Analysis of the Impact of Zakat in West
follows: Sumatra Province Based on Poverty
Indicators
ln(𝑧) − ln (𝑦𝑗 )
𝑡𝑔𝑗 =
𝑔
Table 2. Indicators of Poverty Before and
Information: After Zakat
𝑡𝑔𝑗 = Average Time Taken to Exit
Indicator of Before After Change
Poverty Poverty zakat zakat (%)
𝑧 = Poverty Line H 0.59 0.185 -0.68
𝑦𝑗 = Income of poor households in j P1 (Rp) 633 110.71 326 186.11 -48.5
(where yj grows constant I 0.27 0.14 -48.5
positively at g per year) P2 0.30 0.08 -73.3
𝑔 = Economic growth rate per year P3 0.06 0.01 -83.3
in a region
Source: Calculated by Authors (2019).
Mussa (2015) defined as the time
needed by households to reach the Headcount Ratio Index
poverty line through economic growth The use of this index is intended to
(income), which is assumed to grow determine the number of poor
steadily with a constant amount per year.
households that can be reduced through
This method can also be used to increase efforts to utilize zakat. Based on the
the level of household expenditure. calculation, it is known that the
While the compilation of households is Headcount Ratio (H) value has
above the poverty line. decreased after the BAZNAS zakat
Based on the research done by empowerment program of 0.59 to 0.18.
Gibson and Olivia (2002) in Papua New This decrease indicates that the zakat
Guinea to calculate the level of poverty empowerment program in West Sumatra
in this area. This study calculates the size
can reduce the number of poor
of the time out of Papua New Guinea. households by 68 percent.
The results of this study indicate that the
average time taken to get out of poverty Poverty Gap Index and Income Gap
is 6.2 years if the growth rate is 2
Index
percent. One reason for the average time
of only 6.2 years is more than two-thirds The Poverty gap ratio (P1) and the
of the population above the poverty line, Income gap ratio (I) are indicators that
so the time of discharge is zero. Things can show the level of poverty in
that should be considered by households in a region. Based on the
policymakers are ways to reduce poverty Table 2, it is known that the utilisation of
of policymakers. Moreover, it takes 20.5 zakat provided by zakat institutions is
years to get out of inequality. from the previous Rp. 633.110 to Rp.
326.186. Likewise, the value of I has
decreased from 0.27 to 0.14. Both of
these indicate that the level of depth of
poverty of households in West Sumatra
was reduced after the zakat
empowerment program by BAZNAS.
8 International Journal of Zakat Vol. 4(2) 2019

Sen Index Index and FGT Index Figure 1. Average Time of Taken to Exit
Poverty Mustahik Household Without zakat
Sen Index (P2) and FGT Index (P3) are distribution
analytical tools used to measure the
severity of poverty in a region. The Without Zakat Distribution
results of the analysis show that the P2 6,9
8 6
value has decreased from 0.30 to 0.08. 5,2
6
This value is known to be worth 0.

Year
4
Hence, there is no household that has
2
income below the poverty line, whereas
if it is worth 1 then all families have 0
5,29 6 7
income above the current poverty line.
While the P3 value shows a decrease Economic Growth of West Sumatra
from previous 0.06 to 0.01 This result
shows that the empowerment program Source: Prepared by Authors (2019).
initiated by BAZNAS was able to reduce
the severity of farmer households by Figure 2. Average Mustahik Time Taken to
83.3 percent. Exit Poverty of Households, there is a
Zakat Distribution
Average Time Taken To Exit Poverty
Analysis Without And With Zakah With Zakat Distribution
Based on Figure 1 and Figure 2, it is 4 3,3
2,8
known that there is a decrease in the 3 2,4
Year

average time needed for beneficiaries of 2

zakat empowerment programs to get out 1
of poverty, or at least be able to reach the 0
Poverty Line of West Sumatra Province. 5,14 6 7
This calculation uses the assumption of Economic Growth of West Sumatra
economic growth in the Province of
West Sumatra in 2017 which is 5.29 and Source: Prepared by Authors (2019).
in 2018 of 5.14 per year.
This shows that the management Based on this research, it can be
of zakat and the distribution of zakat by concluded that the zakat program
BAZNAS of West Sumatra to mustahik managed by BAZNAS in West Sumatra
has been able to accelerate income Province is able to contribute positively
increases while shortening the time the to poverty alleviation programs. The
people who receive zakat funds can get performance of amil institutions in terms
out of poverty and can become a person of distribution is quite good. Despite the
who pays zakat. It can be noted the increase in the aspect of zakat
results of the analysis using the method distribution, the collection of actual
of analysis of average time taken to exit zakat is still far behind its potential.
poverty, from before it took 6.9 years There is a big gap between the potential
without zakat and can be reduced to only and the collected zakat.
3.3 years if zakat can be optimized in its If the value of economic growth
use. in West Sumatra Province can increase
to 6 to 7 percent, this will have an
impressive impact repeatedly. Because
the time needed for mustahik to get out
Investigating the Impact of Zakat on Poverty Alleviation:…… 9

of poverty is getting faster. If the growth expected potential amount. Likewise,

rises to 6 per cent without the zakat, the zakat institutions are recommended to
average value of time taken to exit keep and improve their innovation in
poverty is 6 years, however, if it is empowering Mustahik.
accompanied by the distribution and
utilization of zakat in a professional
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12 International Journal of Zakat Vol. 4(2) 2019
 International Journal of Zakat Vol. 4(2) 2019 page 13-22

Measuring Amil Happiness Using Psychological Approach:

Evidence from Yogyakarta, Indonesia

Zaki Abdullah, Duddy Roesmara Donna

Graduate School, Universitas Gadjah Mada

Dinda Aisyah Najmi

Faculty of Economics and Management, IPB University

ABSTRACT

The implementation of Good Amil Governance as one of the important aspects of a

standard of international zakat management, which is stated in Zakat Core Principles,
requires an approach that is more than just amil competence and qualification aspects.
The psychological perspective of amil also needs to be considered to obtain and maintain
the best human resources. As a profession that is oriented towards social benefits, an
amil has different working rhythm and consequences. This research aims to measure level
of amil’s happiness in the workplace and further study its impact on amil productivity.
The result shows that amil is a satisfying job. Further, the most blissful factor for amil is
work motivation, while the most unhappy factor for amil is the career path, which seems
to be less promising. In addition, the happiness level of amil has a positive relationship
with his or her productivity level. Therefore, psychology condition of an amil should be
considered in order to increase the performance of zakat institutions.

Keywords: Amil Zakat, Good Amil Governance, Happiness, Productivity, Psychology

JEL Classification: D23, D91

INTRODUCTION zakat fund can serve as a tool to decrease

poverty and the gap in the economy.
Poverty and the gap in economic welfare According to Statistik Zakat
are the problems of developing Nasional (2017), the current collection of
countries. Therefore, the poverty zakat remains at Rp. 454million or 2.8
alleviation and gap of economic decrease percent from the measured potential.
indicators are included in Sustainable There are still many tasks to be done by
Development Goals (SDGs) of The zakat institutions in digging the potential
United Nations, as a development goal of zakat. As an effort to optimize the
for human. Zakat becomes one of the existing potential, zakat management
right tools to reduce poverty and the gap should be well driven by competent and
of economic welfare (Beik, 2009). A credible institutions. Beik et al. (2016)
study by Firdaus et al. (2012) found that provide the reference of Zakat Core
the potential of zakat in Indonesia Principles that are fundamental
reached Rp.16.2billion or 3.4% of principles of zakat management as an
Indonesia’s GDP in 2010. Further, in effort by the zakat institutions to
2019, research done by BAZNAS Center implement the ideal management zakat
for Strategic Studies shows that potential system.
of zakat fund is at Rp.21.3billion. This One of the critical principles of
zakat institutions is Good Amil
14 International Journal of Zakat Vol. 4(2) 2019

Governance. This is because amil is the and professional in accordance with the
motor of the system in zakat institutions required field.
covering administration, collection, and However, in addition to the
distribution of zakat. This matter competency and professional factors of
strengthened by Rusydiana & an amil, the psychological well-being in
Firmansyah (2017) in their research that the implementation of Good Amil
put Good Amil Governance as the most Governance also needs to be a concern.
priority aspect of Supervision. This In this regard, well-being has a broad
shows that this aspect is one of the meaning. Thus, the measurement of
considered principles in supporting the well-being using arranged indicators that
optimization of existing zakat potentials. not only to describe the condition of
The implementation of Good material prosperity but also lead to the
Amil Governance can be conducted by condition of subjective welfare or
implementing the following aspects; happiness (BPS, 2017).
transparency, accountability, As elaborated in the above text,
responsibility, justice, and local wisdom this paper aims to measure the degree of
(Chotib et al., 2018). Therefore, it is amil’s happiness using a psychological
necessary for an amil to be competent approach method.

Figure 1. Framework of Thinking

Source: Authors’ own.

LITERATURE REVIEW their work because all of their needs are

satisfied. That also goes to amils. In this
In research conducted by Sharifzadeh & regard, an amil who works happily will
Almaraz (2014), it was found that happy be more loyal to the zakat institution
workers tend to be more productive than where he or she works.
those who are less happy. Workers also Cadmus (2012) in his study
do not need to worry and can focus on found that among the factors that
Measuring Amil Happiness Using Psychological Approach: Evidence… 15

influence the happiness of a environment, heavy workload, and

worker, in special relation to passion discrepancy, should bring down
psychological well-being, is a relevant an amil’s performance.
workload, work time and balanced life,
decent salary, a positive environment, Objectives
and a clear career path. Although
The psychological aspect of an amil is an
happiness in workplace cannot be essential variable in zakat institution.
achieved continuously, these factors That is because the condition of an amil
need to be considered by human as a motor of zakat institution will
resources (HR) managers. The target and determine the productivity and
productivity of the institution that will be achievement of the institution. This
achieved need to be determined research tries to look at the role and
realistically and wisely by looking at the management of amil from a different
aspects of the resources they have. perspective, which is related to the
Work motivation has a positive
psychology of amil in managing zakat
impact on the commitment to an funds.
organization (Mangkunegara & Psychological well-being can be
Octorend, 2015). Work motivation also measured through the happiness of amil
has a positive effect on employee
in the workplace. Happiness can be
happiness. Workers who are increasingly measured through several latent
motivated and committed will work variables. Thereby, there are 2 (two)
better and be satisfied (Sohail et al,
objectives in this study which are;
2014). As a non-profit institution, zakat measuring happiness of amil zakat
institution has different characteristics institutions in Yogyakarta, and
compared to that of profit-oriented ones, investigating its impact on amil
including in managing their human productivity.
resources. This circumstance is because Measuring amil happiness in
there is no production or sales process in Yogyakarta is interesting due to
zakat institutions, but making the Yogyakarta is the happiest province in
collection of zakat funds as a factor of Java Island (BPS, 2017). Java Island is
production, then channeling the fund to the most strategic island in Indonesia
the mustahik in order to equalize social because it is the center of economic and
economics condition in the society. business activities in the country. It also
These different goals make the work contributes the most to Indonesia’s GDP.
motivation of employees at the zakat Meanwhile, Yogyakarta is one of the
institution different. exclusive provinces in Indonesia and the
As the above, it can be concluded happiest province among other special
that the happiness of an amil in work is regions such as DKI Jakarta, Aceh, and
needed because the implementation of Papua based on Indonesia Happiness
Good Amil Governance as one of the Index.
Zakat Core Principles cannot be carried
out without the support of amil
psychological factors. Disorders of METHODOLOGY
psychological factors will harm amil’s
performance and his or her Work Happiness Factors of Amil
professionalism. For example, the
factors of financial inadequacy, unclear Happiness can be measured through
career paths, less suitable work several factors to describe amil
16 International Journal of Zakat Vol. 4(2) 2019

satisfaction as worker in general. The The data used in this study is the primary
happier person will make him or her data. It is obtained directly through field
more productive at work (Sgroi, 2015). surveys. The data retrieval method is
Based on the principle of Good Amil conducted by filling out the administered
Governance in the Zakat Core Principles, questionnaires that have been made and
an amil does not only have an orientation processed by the authors. The data in the
to work, but also charity under the zakat questionnaire is ordinal. The data was
institution as a social organization at the obtained from 46 respondents who were
same time. These factors can also amils of zakat institutions in Yogyakarta.
illustrate the psychological side of an The selection of respondents was done
amil profession. The proxies of with a purposive sampling method,
happiness of amil can be described by which determines the respondent based
the following factors: on the provisions made by the authors.
The amils involved in this study
Table 1. Determinants of Happiness at were from 3 (three) official zakat
Work institutions, including BAZNAS
Yogyakarta City, BAZNAS Yogyakarta
Determinants of
No Worker Reference
Province, and Dompet Dhuafa (DD)
Happiness Yogyakarta.
1 Workload Cadmus (2012),
Shah et al (2011) Analysis Method
2 Career Path Cadmus (2012), The data obtained from the primary
SEEK Asia (2017) source was processed by a validity test to
3 Financial Cadmus (2012), determine the validity of question as a
Welfare/Salary SEEK Asia
(2017), Wulandari
proxy which illustrates the happiness of
& Widyastuti amil. After that, the reliability test is
(2014) conducted to determine the level of
4 Work Motivation Sohail et al questionnaire consistency. Furthermore,
(2014), descriptive analysis is conducted to
Mangkunegara & measure the happiness of amils in their
Octorend (2015) working environment. The measuring
5 Work Cadmus (2012), scale is at the range from 1 to 5 where
Environment SEEK Asia
(2017), Wulandari
number 3 is neutral. The bigger the score
& Widyastuti describes the happier is an amil. Further,
(2014), Fernández Pearson Correlation Analysis is used to
et al (2017) determine the relationship between the
6 Working Time Cadmus (2012), happiness level of amil to the level of
SEEK Asia productivity at work.
(2017), Fernández
et al (2017)
7 Passion Spehar et al RESULTS AND DISCUSSION
(2016), Purba &
Ananta (2018)
Validity and Reliability Test
Source: Prepared by Authors. After the completion of the
questionnaires, the validity test was
Types and Data Sources conducted. There were 25 from 35
questions that have fulfilled the
prerequisites to be valid. The 25
Measuring Amil Happiness Using Psychological Approach: Evidence… 17

questions have r-count > r-table based on value or composite reliability should be
the significant test at a level of 5 percent. more than 0.7 although 0.6 is still
While the other ten questions were acceptable (Hair et al. dalam Putri &
invalid because the error level of more Gunawan, 2014).
than 0,05 percent. The result of the reliability test of
the 25 valid questions shows that the
Table 2. Result of Validation Test questionnaire is highly reliable as can be
seen in Table 3.
Correlation
Item Indicator r-table Conclusion
Coeff.
Table 3. Result of Reliability Test
X1.1 Work 0,746 0,444 Valid
Motivation
X1.2 Work 0,492 0,444 Valid Cronbach's Number of
Motivation Alpha Statement
X1.3 Work 0,493 0,444 Valid
Motivation
0.945 25
X1.4 Work 0,714 0,444 Valid
Motivation Source: computed by Authors (2019).
X2.1 Working 0,673 0,444 Valid
Time Cronbach’s Alpha 0.945 value
X2.2 Working 0,490 0,444 Valid shows that the 25 questions on the
Time
X2.3 Working 0,528 0,444 Valid
employed questionnaire have a relatively
Time high degree of reliability. After validity
X3.1 Work 0,676 0,444 Valid and reliability tests, the analysis of the
Environment respondents’ answers is further
X3.2 Work 0,577 0,444 Valid conducted.
Environment
X3.3 Work 0,578 0,444 Valid
Environment Analysis of Amil’s Happiness at Work
X4.1 Workload 0,763 0,444 Valid
The result of a descriptive analysis
X4.2 Workload 0,521 0,444 Valid
obtained from the average of
X4.3 Workload 0,809 0,444 Valid
respondents has shown several findings.
X5.1 Career Path 0,728 0,444 Valid
X5.2 Career Path 0,696 0,444 Valid
The career path was found to be the least
X5.3 Career Path 0,562 0,444 Valid unhappy factor for the sampled amils
X5.4 Career Path 0,602 0,444 Valid with 3.78 (the lowest score). The reason
X6.1 Passionate 0,513 0,444 Valid for being so, perhaps, the majority of
X6.2 Passionate 0,694 0,444 Valid amils in zakat institutions in Yogyakarta
X6.3 Passionate 0,723 0,444 Valid are employed based on contract scheme.
X7.4 Passionate 0,796 0,444 Valid This type of employment represents that
X7.1 Salary 0,717 0,444 Valid amil profession is not a permanent job.
X7.2 Salary 0,684 0,444 Valid Further, regarding the permanent
X7.3 Salary 0,590 0,444 Valid amil in the sampled institutions, as
X7.4 Salary 0,665 0,444 Valid authors have found, only totaling 5 to 10
amils are employed permanently.
Source: computed by Authors (2019).
Perhaps, such employment has led to the
Following the validity test above, quick change of human resources, which
the authors performed the reliability test to some degree, could create a risk to the
to all variables considered valid. The test zakat institution itself. It is important to
involved the consistency test of the be noted that the quality of an employee
questionnaire. Rule of thumb of alpha will be improved with a clear career path
(Dewi & Utama, 2016). However, from
18 International Journal of Zakat Vol. 4(2) 2019

the current findings, the impermanent amil was the profession they wanted or
occupations factor, the career path aspired.
offered by the zakat institutions, are Another indicator that measures
found to be unclear and less promising. the happiness of amil is salary. The
Although zakat institution is a results show that the salary of an amil has
non-profit institution, the management a score of 4.03. This result represents
must be professionally conducted. that amils in zakat institution is quite
Therefore, amil as a zakat fund manager happy with the salary they earn, notably
needs to have adequate and relevant in the context of amils who work in the
qualifications and loyalty to the sampled institutions. Based on the
institution. If amil’s turnover happens in results of interviews, the average salaries
a short time because the offered career of the amil certainly not as big as in
path is less-promising, that regard will companies or other profit institutions.
weaken the institution. Career path in However, the salary they earn is in
zakat institution must be made different accordance the work they have done.
from those in the conventional company The amount of their income is above the
or civil servant. regional minimum wage. The amount
Following the factor of career can fulfill daily needs, which is fair and
path, the workload was further found reasonable.
with a score of 4. It seems that workload In addition to the above, the
in the sampled zakat institutions is less environment at work was also utilized to
enjoyed by the respective amils. Perhaps, measure the happiness of amil. The
the workload given by the zakat environment in zakat institutions in
institution does not meet the amil Yogyakarta was found to be fairly good
standard of qualification. The workload with a score of 4.30. This score is much
can encourage employee productivity, better than the four previous factors. It
but excessive workloads will result in an means that the amils in zakat institutions
adverse impact on the form of physical in Yogyakarta are happy with the
or mental fatigue (Irawati & Carolina, conditions of the existing environment.
2017). A pleasant work environment
Further, the next factor that supports employees to work
contributes to the happiness of amil is productively. The colleagues in
passion based on the relationship workplace also support each other and do
between the expectation and abilities of not overturn each other’s work. The
amil and the current field of work. The highest quality standards also must be
result of this factor has a score of 4.02, applied to keep the work environment
which can be said to be quite good. This productive and professional. Zakat
score, perhaps, means that the sampled institutions in Yogyakarta have
amils’s passions are in line with their implemented that regard. This condition
tasks. The jobs in administration, was reflected in the sampled amil
finance, fundraising, management or happiness score as above mentioned.
services, are expected by the sample. The other two factors that were
Nevertheless, there is an important note found to be good for the happiness of
in one of the statements as a proxy for the amil in zakat institutions in Yogyakarta
passion of work which is related to the are the factors of working time and
desired job. On average, the respondents motivation. The office hours are not too
answered that they were not sure that tight and ideal (8 hours of work). On that,
an amil is given proportional time for
Measuring Amil Happiness Using Psychological Approach: Evidence… 19

vacation and leave. The policy about the Happiness covers not only the
standard of working hours and overtime material aspect but also non-material
is following the Law No. 13 of 2003 such as the needs of spirituality, social
about Manpower. Furthermore, the amil contacts, and suitability in the field of
can enjoy working moments, and daily work. In this regard, the authors have
work can be completed on time. The records that zakat institution can do to
happiness score for working time factor increase the happiness of amil, which
is 4.45. can improve career and development
The last factor is work path of its amil.
motivation. It contributes to the highest
score as a happiness factor of amil zakat The Relationship between Work
in Yogyakarta with a score of 4.46. Happiness and Productivity of Amil
Perhaps, this is because the motivation as After knowing the level of work
an amil aims at helping people in need. happiness of amil, it is important to
Amil job is a noble profession as Allah
investigate the relationship between
mentioned in the Qur’an Chapter 9 work happiness to the productivity of
(Surah At-Taubah) verse 60. The score amil in order to better understand this
of happiness based on this high working subject matter. In this study, the test is
motivation shows that the amils are the
done following Sharifzadeh & Almaraz
ones who have a high social spirit and a (2014) dan Sgroi (2015), who found that
good level of spirituality. Based on the that happy workers tend to be more
work motivation they had, the amils feel
productive at work.
happy even though they do not expect The result of the descriptive
their current job. analysis from the questionnaires
indicated that each happiness factor has
5,00 4,46 4,45 4,30 different contributions to the level of
4,00 4,02 4,03
4,00 3,78 amil productivity. The level of happiness
from work motivation has the most
3,00 significant contribution to the sampled
amils productivity with a score of 4.50.
2,00
Perhaps, this is because the work
1,00 motivation factor encourages someone
to work better while they enjoy the job.
The happiness of amil as a result of the
work motivation factor has a high score.
Therefore, it is natural when the work
motivation occupies the highest position
Source: computed by Authors (2019).
in influencing productivity.
Figure 2. Level of Amil Happiness by Furthermore, the factor which
Determinants has the most significant contribution to
amil productivity after work motivation
Based on the seven factors as a is working time and working
mean of measuring the happiness of amil environment with the same score of 4.40.
in Yogyakarta above, then an average That was then followed by a passion for
score of 4.15 is obtained. This score work with score of 4.30, salary with 4.20
shows that the profession of amil is a and workload with a score of 4,10. While
satisfying job and this means that the the factor that affects productivity with
sampled amils are happy.
20 International Journal of Zakat Vol. 4(2) 2019

the lowest score is the career path with The result of the Pearson
3.75. correlation was 0.899 as can be seen in
As the level of happiness, the Table 4. These results indicate that there
contribution of the career path in the is a strong relationship between
zakat institutions makes amil feel happiness and productivity level of amil.
unhappy, which may result in reduced Therefore, even though amil is a
productivity. Overall, the sampled amils satisfying profession, the determinants
agreed that the happiness factor is one of of happiness of the amil need to be
the factors that affect their productivity. continuously improved in order to
That was indicated by the average score increase the productivity of amil,
of 4.22, which states that each happiness especially in improving career paths and
factor has an impact on their work providing workload.
productivity.

Motivation 4,5 CONCLUSION

Worktime 4,4
The happiness of amil zakat in
Environment 4,4 Yogyakarta has been investigated in this
Workload 4,1 study. The most blissful factor for amil is
work motivation. The work motivation is
Career Path 3,75
the perception that amil is a noble
Passion 4,3 profession in Islam who aims to help
Salary 4,2 people in need through zakat funds. It
can be concluded that the majority of
1,00 2,00 3,00 4,00 5,00
amil had high spirituality and social
sensitivity.
Source: computed by Authors (2019). Adversely, the most unhappy
factor is a career path that seems to be
Figure 3. The Amount of Each Factor unclear and less promising. This factor
Contribution to Amil Productivity could demotivate amil at work and
reduce loyalty towards the institution. In
Further, this study has carried out order to keep and maintain the good amil
a correlation analysis to find out the governance, it is necessary to have a
relationship between happiness and bright and promising career path map
productivity level of amil. Table 4 shows that including material plans such as
the findings. financial and the position, and non-
material advantages such as the scope of
Table 4. Correlation Analysis between
Happiness and Productivity of Amil social contributions and flexibility time
to work.
Correlation Value
Productivity In addition, the level of work
Level of Amil happiness of amil also was covered in
Happiness Level of
0,899
this paper. It has a positive relationship
Amil with the level of work productivity. The
Number of Variable happier an amil, the more productive at
7
(N)
work he or she will be. Therefore, the
Source: computed by Authors (2019). psychological conditions of an amil must
be concerned and maintained in order to
improve the performance of zakat
Measuring Amil Happiness Using Psychological Approach: Evidence… 21

institutions, especially for the Dewi, N.L.P.A.A. dan Utama, I.W.M.

implementation of Good Amil 2016. "Pengaruh Pengembangan
Governance in terms of human Karir terhadap Kinerja Karyawan
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Finally, future research may pada Karya Mas Art Gallery". E-
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findings. Aragón, N.D.Q. dan Gil, A.C.
"Happiness at Work, Business
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"Faktor - Faktor Kebahagiaan Di
 International Journal of Zakat Vol. 4(2) 2019 page 23-40
Governance of Formal Zakat Institution in Saudi Arabia; Issues and Challenges to
Improving Zakat Payers’ Compliance

Abdulsalam Ahmed Sawmar

IIiBF, International Islamic University Malaysia (IIUM)

Mustafa Omar Mohammed

Kulliyah of Economics and Management Sciences, International Islamic University
Malaysia (IIUM)

ABSTRACT

This study investigates the issues of governance practices of the formal zakat institution
in Saudi Arabia, GAZT. It also attempts to develop a framework which explains how to
improve zakat compliance through good governance. In order to achieve these objectives,
the study employs a content analysis of relevant literature and qualitative interviews.
Specifically, a total of 21 interviews were conducted with zakat experts in Saudi Arabia
who represent diverse backgrounds to explore the issues and factors related to zakat
governance-compliance relationship. The findings of the interviews’ analysis suggested
several issues that likely affect zakat payers’ compliance in the Saudi context. These
issues included the lack of control mechanisms that guarantee zakat payers’ compliance,
the perceived image of the GAZT role in relation to zakat, the lack of trust, and issues
affecting the perceived procedural fairness. In addition, the analysis of the qualitative
interviews was used to develop a framework that explains how to improve zakat
compliance through good governance. This study contributes to the literature by
investigating governance issues and challenges to improving zakat payers’ compliance.
Also, it provides practical implications for zakat administrators, especially in Saudi
Arabia, to address these issues and improve the effectiveness of the zakat authority.

Keywords: zakat institutions, governance, Saudi Arabia, zakat payment compliance

INTRODUCTION prosperity and development of Muslim

societies. Several reports suggest that
Zakat is a monetary, religious duty zakat was effective in eradicating
imposed on Muslims whose wealth is poverty in certain times. For instance,
entitled to zakat payment according to during the period of Umar bin Al-
shariah principles (Al-Qaradawi, 2002). Khattab (13-22H) and Umar bin Abdul
The importance of zakat is manifested Aziz (99-101H), it was reported that
through its ranking among the five zakat officers could not find needy
pillars of Islam and its sizable socio- recipients in some regions (Al-omar,
economic impact within the Muslim 1996; Al-Qaradawi, 2002). These
communities. Zakat is intended to examples are evidence that zakat can be
provide a fair redistribution of wealth, a powerful and effective mechanism in
aiming to alleviate poverty and reduce combating poverty and income
the socio-economic gaps. Zakat in the inequality, especially if appropriately
early history of Islam, had played a managed.
crucial role in the socio-economic
24 International Journal of Zakat Vol. 4(2) 2019

Despite the enormous impact of estimating that about 20% of Saudis live
zakat in the past, it is believed that the under the poverty line (S. AlDamigh,
role of zakat has been insignificant in 2014). Another indication of the extent
contemporary Muslim countries. of poverty can be seen in the numbers of
Evidently, many Muslim countries welfare programs recipients. According
suffer from widespread poverty and to the latest official report, there are
increasing income inequality. Many 1,222,411 citizens registered in the
scholars assert that zakat has not been Social Security Agency under the
allowed to fulfil its potential role within Ministry of Labour and Social
the economic policies of current Muslim Development (Saudi Ministry of Labour
countries (Al-Qaradawi, 2002; Shaikh, & Social Services, 2017). This number
2016; Shihata, 2006). The absence of represents about 16% of the Saudi
formal and regulated zakat institutions in population, excluding the non-Saudi
the majority of Muslim countries are citizens.
evidence of their negligence to the role The rising poverty and increasing
of zakat. However, a few Muslim cost of living in the Kingdom have raised
countries have established zakat the public concerns over the
regulations and institutions for managing effectiveness of the zakat authority in
zakat, such as Saudi Arabia, Sudan, combating poverty issues. Such
Malaysia, and Pakistan. Nonetheless, it concerns have frequently been voiced,
is believed they are facing significant especially by zakat payers who are
challenges with ensuring zakat payment legally obligated to pay their zakat
compliance and improving their through the General Authority of Zakat
effectiveness (Guermat, Tucker, & Al- and Tax (GAZT), which is the official
Utaibi, 2003; Saad & Haniffa, 2014; zakat collection body in Saudi Arabia.
Shirazi & Amin, 2006). Moreover, zakat payment compliance is
Although Saudi Arabia is seen as deemed to be a significant challenge
an immensely wealthy and resourceful facing GAZT. The lack of zakat payers’
country, poverty is said to exist on an compliance is evident based on recent
increasing scale over the years. Despite statistics published by the GAZT which
the lack of official statistics concerning reported the numbers of submitted zakat
poverty in Saudi Arabia, several reports statements by business owners who
have indicated the significant magnitude complied with zakat rules in the last two
of poverty that exists in the Kingdom. years in comparison with the total
For example, S. AlDamigh (2014) registered businesses subject to zakat
mentions that the Gulf oil states are laws (see figure 1). Furthermore,
hardly distinguished between the rest of previous studies estimating zakat
the Arab countries in the Human Poverty potential could indicate to the significant
Index (HPI). According to statistics from zakat gap in Saudi Arabia between the
the human development reports and formally collected zakat proceeds
other social indicators, Saudi Arabia has through the GAZT and the estimated
a poverty range between 10 – 20%. zakat potential (see Farhan, 2008;
Moreover, there are non-official reports Shaikh, 2016, Kahf 1989).
Governance of Formal Zakat Institution in Saudi Arabia; Issues and….. 25

800.000 678.565
600.000
356.181 340.890
400.000
190.356
200.000
0
2016 2017
No. of submitted zakat statements No. of businesses

Figure 1. Level of Zakat Non-Compliance Issues in the Last Two Years

Source: statistics were retrieved from gazt.gov.sa

Despite the early establishment compliance with the regulations and

of the formal zakat institution in Saudi objectives of the entity.
Arabia, there has been limited literature There are several studies that
addressing the issues and challenges have discussed governance of zakat
facing the zakat authority. However, few institutions in several contexts, such as
previous studies have suggested a the relationship between governance and
significant extent of compliance issues performance (Fadilah, 2013);
and zakat evasion cases in the GAZT governance and efficiency (Abd Wahab
context (AlSaad, 2013; Al-Utaibi et al., & Abdul Rahman, 2011); and
2003). Specifically, Al-Saad’s study governance and zakat payers' trust
(2013) concerning zakat evasion in the (Abioye et al., 2013). However, the
GAZT context suggested that the lack of current study employs a qualitative
trust was found to be a significant factor approach to investigate the issues
leading to zakat evasion. In addition, it pertaining to the governance of the Saudi
was mentioned that the lack of Zakat Authority, the GAZT, and how to
transparency of the GAZT regarding the improve zakat payers' compliance
distributions process triggered zakat through good governance practices.
payers’ concerns regarding the Accordingly, the rest of the paper is
appropriate treatment of zakat fund. The structured as follows: section two
issue of trust has also been mentioned in provides a background to the Saudi zakat
Al-Utaibi et al. study (2003), which system. Section three discusses the
referred to the absence of shariah methodology employed in collecting and
supervisory as a cause of concerns for analysing the data in this study. Section
zakat payers. Accordingly, such issues Four discusses the issues pertaining to
could be linked to the governance the governance of the GAZT based on
practices of the GAZT, which this study the interviews’ analysis. Section five
attempted to investigate. The term elaborates on how to improve zakat
governance can be defined as “the compliance by implementing good
arrangements put in place to ensure that governance practices. It also presents the
the intended outcomes for stakeholders developed framework that explains the
are defined and achieved” ((IFAC) & influence of governance practices of
(CIPFA), 2014). The process of formal zakat institutions on zakat payers’
governance includes making and compliance. Section six concludes the
implementing decisions, setting paper and provides suggestions for
strategies, and giving directions in future studies.
26 International Journal of Zakat Vol. 4(2) 2019

BACKGROUND ON THE SAUDI Ministry of Social Affairs. The SSA is

ZAKAT SYSTEM the official body handling the
distribution of zakat proceeds beside the
The Kingdom of Saudi Arabia is an funds allocated from the public treasury
Islamic country that derives its laws and aiming to provide financial assistance to
legislations from the Quran and the needy categories of the Saudi citizens
tradition of the Prophet (PUBH) Thus, the mandatory collection of
according to its Basic Law, which is zakat through the formal zakat authority,
regarded as the constitution. Hence, the the GAZT, applies only on business
imposition of zakat has long been entities possessing commercial records
articulated in its Basic Law, authorising and permitted to operate in Saudi Arabia.
the Saudi government to collect and With regard to the other forms of wealth,
distribute zakat for the entitled there is no official channel to manage the
beneficiaries (The Saudi Basic Law, collection of zakat, such as personal
Article 21). Moreover, AlLami (2015) bank accounts and other non-
claims that zakat is regarded as a form of commercial assets. However, zakat on
taxation since the Saudi Basic Law does agricultural produce and livestock is
not accommodate other ad-hoc taxes as collected by ad hoc committees
the case with zakat. As a matter of fact, appointed by the Ministry of Finance in
the Saudi Basic Law restricts the coordination with other government
government from imposing taxes except agencies (Jamjoom, 1990).
when needed and on a fair basis (The The recent change to the GAZT,
Saudi Basic Law, 1422, Article 20). from a sub-department under the
Accordingly, the Department of Zakat Ministry of Finance into an independent
and Income Tax (DZIT), currently the authority that took effect in April 2017
GAZT, was established in 1951 as the has brought new structural changes
official body to handle the collection of within the GAZT governance. This
zakat. Also, the first Zakat Law was administrative change was also followed
issued in the same year, setting up the by new zakat regulations which gave the
regulations and role of the DZIT. GAZT legal and financial independence
According to the GAZT regulations, the from the Ministry of Finance. Moreover,
main objectives of the GAZT are to the new regulations have brought new
calculate and collect zakat on business governance components in the GAZT
inventory from Saudi companies and organisational structure, such as the
individuals operating in the Kingdom. In Board of Directors and the Shariah
addition, the GAZT is tasked with Committee. The Board of the GAZT is
levying taxes from non-Saudi chaired by the Finance Minister and
businesses, besides the recently comprise of representatives of relevant
introduced Value Added Tax (VAT). ministries and governmental agencies.
However, the distribution of zakat is The board includes representatives from
carried out by another agency, the Social Ministries of Finance, Commerce and
Security Agency (SSA), under the Investment, Economy and Planning; the
Ministry of Social Affairs. Specifically, Central Bank of Saudi Arabia (SAMA);
the collected zakat proceeds by the and the Capital Market Authority
GAZT are regularly transferred to a (CMA); and two experienced and
special account at the Saudi Central knowledgeable personals appointed by
Bank SAMA, which, then, transferred to the Ministerial Council based on the
the Social Security Agency (SSA) of the Board Chairman’s recommendation. The
Governance of Formal Zakat Institution in Saudi Arabia; Issues and….. 27

role of the board mainly revolves around The second new component in
decision making and supervision over the GAZT organisational structure is
the GAZT progress. Particularly, the establishing a Shariah committee which
board approves policies, strategic plans, consists of five members who shall be
internal regulations and structure, taxes experts in the fields of Islamic
treaties with international parties, annual jurisprudence, zakat accounting, and
budget, and financial reports. Also, the law. The role of Shariah committee is to
board may propose regulatory bills, review proposed regulations and bill
amendments on current laws, appoint drafts, tackle issues related to the
internal and external auditors, and accept collection of zakat, conducting research
gifts, donations, grants, Waqf or on zakat and other tasks requested by the
endowments in accordance with the board (GAZT regulation, 2017).
relevant regulations (GAZT regulation,
2017)

SAR40.000
SAR33.740
SAR35.000
SAR30.000 SAR27.015 SAR25.291
SAR23.968 SAR22.344
SAR25.000 SAR21.642 SAR20.474
SAR20.000 SAR15.259 SAR16.523 SAR15.431
SAR12.731 SAR14.137
SAR15.000
SAR10.000
SAR5.000
SAR0
1434-2013 1435-2014 1436-2015 1437-2016 1438-2017 1439-2018

Zakat collection by GAZT Distributed subsidies by SSA

Note: numbers shown are in millions SAR

Figure 2. Comparison between Zakat Collection by GAZT and Distributed Welfare Subsidies
by SSA

Sources: statistics were retreived from GAZT.gov.sa & the annual report of SSA

Although the Saudi government need to explore issues affecting zakat

has imposed mandatory zakat collection payment compliance and how it is
by formal zakat authority since 1951, the influenced by governance practices of
collected zakat by the GAZT is said to be zakat authority, which the main objective
insufficient. This low zakat proceed is of this paper. The next section discusses
partially due to the lack of zakat payers’ the methodology used to gather the data
compliance as reported by the GAZT for this study.
(see figure 1). In addition, zakat revenues
have been far from satisfying the of the
needs of welfare recipients from Saudi METHODOLOGY
families receiving funds from the Saudi
Social Security Agency (see figure 2). This study has employed a qualitative
Besides, the lack of relevant literature approach to achieve its objectives. The
and the uniqueness of the legal system of lack of literature and the uniqueness of
zakat in Saudi Arabia emphasise the the legal system of zakat in Saudi Arabia
28 International Journal of Zakat Vol. 4(2) 2019

required a qualitative exploration of the determined based on the attainment of

issues about the governance practices of saturation. The data saturation is
the GAZT. In addition, the analysis of achieved after ensuring that the obtained
the qualitative data was used to develop data can sufficiently explain the research
a framework that explains the influence phenomenon (Creswell & Plano Clark,
of governance on zakat payers’ 2007). Moreover, the selection of the
compliance in the Saudi context. interviewees was based on their
Accordingly, the collection of availability and willingness to
data was done through in-depth participate and communicate their
interviews with experts selected based experience and opinions. In addition, the
on the purposive sampling technique. diversity of experts’ backgrounds was
This technique is widely used in considered during the selection of the
qualitative research as the most efficient participants in order to obtain multiple
way to obtain information based on the perspectives regarding the investigated
participants’ experience and knowledge issues. Overall, the number of
(Creswell & Plano Clark, 2007). participants interviewed in this study
Moreover, expert sampling is useful was 21 experts. This sample size was
when there is a lack of literature so that believed to suffice the concept of
experts can provide practical ways to saturation as the researcher felt there was
investigate new areas of research no significant information that
(Etikan, Musa, & Alkassim, 2016). contributes to the discussion after the
With regard to the sample size, 18th interviews. Table 1 presents the
the number of interviewees was participants’ profile in the study.

Table 1. List of Participants' Profiles

No. Areas of Expertise Affiliation Experience

Ex1 Legal consultant, former head of Al-Riyadh branch GAZT 14 years

Ex2 Legal consultant GAZT 13 years
Ex3 Director-General of Senior zakat and taxpayers GAZT 17 years
Ex4 Director-General of Assessment and Inspection Department GAZT 15 years
Ex5 Academician, the chairman of Zakat Accounting Studies, a GAZT KAU 14 years
member of the GAZT objection committees
Ex6 Economist, a member of the GAZT objection committees GAZT IRTI- 16 years
IDB
Ex7 Academician, a researcher at the Zakat Accounting Studies GAZT KAU 18 years
Chair, a member of the GAZT objection committees
Ex8 Academician, zakat and tax accounting expert and trainer IPA 11 years
Ex9 Academician, a researcher at Zakat Accounting Studies Chair KAU 18 years
Ex10 Accountant, Researcher in zakat accounting UQU 8 years
Ex11 Legal and shariah consultant, a researcher in zakat studies IUM 7 years
Ex12 Deputy dean of the Islamic Economics Institute, a former KAU 12 years
lawyer and legal consultant
Ex13 Economic consultant, Islamic Economics expert Business 18 years
owner
Ex14 Academician, Islamic Economics researcher IMBSU 17 years
Ex15 Academician, Islamic Economics researcher KAU 16 years
Governance of Formal Zakat Institution in Saudi Arabia; Issues and….. 29

No. Areas of Expertise Affiliation Experience

Ex16 Dean of The Islamic Economics Institute, Islamic Economics KAU 21 years
expert
Ex17 Islamic Economics Expert, Economic and Financial Business 13 years
consultant owner
Ex18 Academician, a researcher in zakat and waqf studies IUM 6 years
Ex19 Islamic Economics researcher Business 8 years
owner
Ex20 Director of Zakat research Centre in Riyadh ZCR 5 years
Ex21 Islamic Economics Expert, Lawyer and legal consultant Business 16 years
owner

The interview questions were GAZT governance that are believed to

developed based on the objectives of the affect the level of zakat payment
study, which is to explore issues related compliance. These issues can be grouped
to governance practices of the GAZT, into four factors based on the following
and how to improve zakat payers’ order:
compliance through implementing good 1. The lack of control mechanisms
governance practices. Next, the that guarantee zakat payers’
interviews’ questions were validated on compliance.
their relevance, rigour, and clarity 2. The perceived image of the GAZT
through a peer-review process. role in relation to zakat.
Following the questions’ validation 3. The lack of trust.
process, the researcher translated the 4. Issues affecting the perceived
developed questions into the Arabic fairness of the GAZT.
language, which was reviewed by an The first factor concerns the lack
expert in both English and Arabic of control mechanisms that guarantee
languages. Accordingly, nine questions zakat payers’ compliance. It was
were developed which address the zakat suggested that this factor leads to
gap in the Saudi context, the issues increasing the numbers of zakat evasion
affecting zakat payment compliance, and cases committed by either individuals or
how to improve zakat compliance agents of zakat accountants on behalf of
through governance mechanisms. their clients. For example, zakat evasion
Subsequently, the analysis of the occurs in many forms, such as presenting
qualitative interviews followed the false or altered business records and
thematic analysis approach, which is a concealing business activities in order to
qualitative descriptive methodology for reduce the amount of zakat due. In
identifying patterns (themes) within data addition, the lack of control mechanisms
and reporting the findings (Braun & is believed to allow some zakat payers
Clarke, 2006). The following sections not to follow up with the GAZT
discuss the findings of the data analysis. regarding the payment of their business.
This lack of control could be attributed
to the insufficient number of qualified
ISSUES PERTAINING TO THE zakat accountants working with the
GOVERNANCE OF THE GAZT GAZT to examine zakat statements
provided by zakat payers. Besides, the
The analysis of the interviews data GAZT over-reliance on the discretionary
suggested several issues pertaining to assessment of zakat, particularly for
30 International Journal of Zakat Vol. 4(2) 2019

small and medium businesses, can have collecting taxes from foreign
a negative impact on zakat payers’ commercial entities and the recently
compliance. For example, the introduced Value Added Tax VAT,
discretionary assessment method for besides collecting zakat from Saudi
calculating zakat is believed to allow business owners and companies. This
some zakat payers to hide their business dual role can have adverse effects on the
records in order to pay as minimum as perceived image of the GAZT by
possible of zakat to the GAZT. regarding it as a tax authority more than
Although this factor has received a zakat institution. Moreover, the limited
limited attention in the literature, there role of the GAZT on the collection of
were few studies indicating its impact on zakat might reinforce such negative
zakat compliance in the Saudi context. perceptions, which also does not reflect
For example, AlSaad, (2013) mentioned the traditional role of zakat institutions.
the lack of penalties and enforcement Furthermore, it was mentioned that there
mechanisms as one of the causes for were other factors that could contribute
zakat evasion. Another recent study by to reinforcing an unfavourable image,
Alosaimi (2018) has examined the such as the lack of spirituality in the
influence of two related concepts, GAZT operations and collection process
namely detection risk and penalty and the absence of shariah supervisory
magnitude, on zakat compliance committees in its administrative
behaviours. While the relationship structure. Hence, such negative
between the detection risk and zakat perception is believed to adversely affect
compliance intention showed an zakat payers’ compliance with zakat
insignificant relationship, the penalty rules and procedures imposed by the
magnitude was found to have a GAZT.
significant and positive relationship. The third factor relates to the lack
Hence, it was suggested that an increase of trust, which could be attributed to
in the perceived penalty magnitude could several issues that trigger issues of trust,
significantly increase zakat compliance including the lack of transparency and
intention. Alosaimi’s (2018) justification disclosure about the management of
to the result concerning the insignificant zakat fund. In addition, several
relationship between detection risk and interviewees voiced similar concerns
zakat compliance intention was similar over the distribution process, which is
to the above discussion regarding the done based on meeting certain criteria
overuse of the discretionary assessment for registering eligible recipients by the
method by the GAZT staff. Such a SCA. These criteria may not apply to the
method can reduce the effect of detection conditions of eligibility for receiving
risk as zakat avoiders would be subject zakat money according to shariah
to it once the GAZT required them to pay principles. However, the GAZT has no
zakat due. control over the distribution process due
The second factor concerns the to the separation between the collection
perceived image of the GAZT in relation and distribution functions. Besides, the
to zakat collection. Although there are SSA source of funding is not limited to
various issues that could shape zakat the collected zakat proceed as it is
payers’ perception toward the GAZT, combined with additional fund allocated
the concern is mostly triggered by its from the public revenue of the Saudi
dual role in collecting both tax and zakat. government.
Specifically, the GAZT is tasked with
Governance of Formal Zakat Institution in Saudi Arabia; Issues and….. 31

Previous studies have mentioned procedural fairness in the GAZT context.

the issue of trust in the GAZT context as For example, AlSaad (2013) mentioned
one of the causes of zakat evasions (Al- that the lack of clarity regarding the
Malafikh, 2014; AlSaad, 2013). Thus, criteria used for zakat assessment by the
this finding from the qualitative data GAZT contributes to zakat non-
analysis is in line with the previous compliance issues. Similarly, Asiri &
studies’ findings regarding the existence Yamani (2017) mentioned that the
of the trust issue in the GAZT context. different assessment methodologies and
Moreover, the influence of trust on calculation of zakat from certain assets
compliance behaviours has been were cited among the leading causes of
documented in various areas of the disputes between zakat payers and the
literature, including tax compliance GAZT. Such issues can be linked to the
(Murphy, 2004), and policing and law- perceived fairness of the process and
abiding behaviours (Braithwaite & procedures followed by the GAZT,
Makkai, 1994). However, although few which should be based on established
studies have examined the influence of rules that take zakat stakeholders’
trust on zakat compliance behaviours, no interest into accounts.
significant relationship has yet been
found (Ahmad, Nor, & Daud, 2011).
The last factor discussed in the IMPROVING ZAKAT COMPLIANCE
interviews concerns the perceived THROUGH GOOD GOVERNANCE
fairness of zakat assessment and (DEVELOPING A FRAMEWORK)
collection procedures imposed by the
GAZT. There are several issues that This section discusses the remaining
could cause disputes over the methods of questions that were asked in the
assessing zakat due by the GAZT. Such interviews regarding how to improve
issues can be attributed to the differences zakat compliance through good
of juristic views regarding the governance. The themes discussed in the
calculation of zakat from certain assets, remaining questions were based on the
such as loans and assets under lease- review of the literature with probing
purchase contracts. Moreover, the lack questions that provide room for further
of flexibility in demanding the full discussions of factors and aspects that
payment of zakat due by the GAZT were not included in the main themes. At
might discourage some zakat payers’ the end of the analysis, four themes were
from disclosing all assets subject to zakat identified, namely: 1- the administration
assessment. For example, many zakat of zakat institution; 2- the performance
payers wishing to distribute their zakat of zakat institution; 3- the transparency
directly on needy relatives or neighbours and disclosure practice of zakat
might resort to seeking ways that institutions; 4- the fairness of zakat
minimise their due zakat. Hence, the lack regulations and procedures.
of flexibility could be related to the Accordingly, a positive perception of the
perceived fairness of the GAZT because above-mentioned dimensions would
the wishes and interests of zakat payers likely boost zakat payers' confidence
should be respected and protected, towards Zakat Authority and encourage
besides protecting the interest of zakat greater compliance with zakat
beneficiaries. regulations. The following sub-sections
There has been limited literature provide further discussions of those four
that discusses issues related to dimensions. Also, a summary of the
32 International Journal of Zakat Vol. 4(2) 2019

discussed themes and their related payers. The organisational mission

aspects are presented in figure (3) at the and objective should also be in-
end of this section. line with the Shariah objectives of
zakat, established in the Islamic
1. The Administration of Zakat jurisprudence and the early
Authority institution of zakat.
The administration department is the b. Appointing reputable and
backbone of any organisation which competent board members and top
facilitates sound running of its managers: the integrity and
operations. The role of the competence of the leaders of the
administration is seen as the most zakat Authority are crucial to
influential factor that shapes the protect zakat fund from being
organisational culture and dynamics. It abused or mismanaged. The board
also has a fundamental role in ensuring should consist of members with
the alignment of the direction and the diverse skills and academic
commitment to the values and vision that backgrounds, which enables them
the organisation tries to accomplish to recognise issues that the zakat
(Drath et al., 2008). In this context, the authority encounters. It is also
administration of zakat institution refers suggested that the board should
to the board and the top-level include members representing the
management in charge of formulating interest of zakat stakeholders, such
policies, setting objectives, allocating as zakat payers and zakat
resources and supervising the recipients besides other relevant
organisation’s activities. Accordingly, stakeholders.
zakat administration is responsible for c. Ensuring sound shariah
building and maintaining a positive governance over the collection and
image which reflects their accountability distribution process: the existence
to zakat stakeholders. Also, it has a of a shariah body or department
significant role in enacting the that observe and supervise the
organisational vision and ensuring the management of zakat fund would
implementation of strategies to achieve likely reinforce zakat payers’
zakat objectives. Therefore, this confidence towards the zakat
dimension has a crucial influence on authority and encourage greater
zakat payment compliance by creating zakat compliance.
positive perception towards the d. Building the organisational
credibility and competence of the zakat capacity to manage the collection
authority in managing zakat affairs. and distribution of zakat
The analysis of the interviews efficiently and effectively: The
with zakat experts emphasised several administration of zakat should
aspects that are crucial to creating a demonstrate accountability by
positive perception towards the zakat building the capacity to manage
administration. Those aspects include: the collection and distribution of
a. Setting up a clear mission and zakat fund.
objectives of the Zakat Authority:
it is crucial that the organisational 2. The Performance of Zakat Authority
mission and objectives of Zakat
The second dimension that could
Authority are well-known and
respected by the public and zakat influence zakat payment compliance
concerns the performance of zakat
Governance of Formal Zakat Institution in Saudi Arabia; Issues and….. 33

authority. However, assessing the c. Effective use of technology: The

performance of zakat institutions is advantages of adopting technology
different from the performance of the and online system for zakat
private and for-profit sector, which relies collection in the GAZT context are
heavily on financial indicators. evident. It can be observed that the
Evidently, the goals for performance use of technology has significantly
measurement of zakat institutions is facilitated the efficiency of the
similar to charity organisations and the collection process. The current IT
public service sector. According to Dunn system of the GAZT allows zakat
and Mathew (2001), the performance payers to submit their business
assessment in charities aims to evaluate: statements and view zakat
1- meeting the expectations and standers assessment, then pay it online
set by funders or donors; 2- providing rather than following up with the
satisfactory services to stakeholders; 3- nearest branch. This easy and
enhancing staff performance through convenient process has brought a
learning and development; 4- positive impact on zakat proceeds
demonstrating the management collected by the GAZT as it
accountability and transparency to facilitates the zakat collection
stakeholders (as cited in Yang, Brennan, process. In addition, this online
& Wilkinson, 2014). The performance system serves as a guarantee
dimension in this framework covers mechanism for ensuring the
several aspects that were mentioned by compliance of zakat payers with
the interviewees, which include the zakat rules by linking other
following: governmental services, so that
a. Improving the efficiency of zakat zakat avoiders may not receive
collection and distribution other services unless they pay their
processes: The need to improve the zakat dues.
efficiency of the collection and d. Enhancing the skills and
distribution of zakat is a knowledge of zakat staff: The
continuous challenge. Issues quality of zakat staff can shape the
affecting the perceived efficiency perception of zakat payers
can have a significant impact on regarding how they are being
zakat payers’ confidence towards treated and served and the level of
zakat authority and discourages knowledge and skills of zakat
zakat compliance behaviours. assessors in performing their jobs.
b. Spreading zakat awareness and Therefore, it is of prime
promoting zakat authority role in importance that the zakat
managing zakat: Effective administration pays primary
communication between the attention to recruiting zakat staff
administration of zakat and the and equip them with the skills and
public and zakat payers is crucial training needed for the job.
for the success of zakat e. Providing good service quality and
institutions. Good communication care for zakat stakeholders: The
with the public should increase quality of services that zakat
zakat awareness and convey the payers receive when dealing with
management’s commitment and zakat authority can also influence
competence in managing zakat zakat compliance. It is suggested
affairs. that zakat authority could employ
34 International Journal of Zakat Vol. 4(2) 2019

the use of indicators that evaluate followed during zakat assessment,

zakat payers’ satisfaction with the including all assets subject to zakat
services provided and make assessment, and exempted assets
improvements accordingly. and expenses. Such clarity of zakat
laws should be fair and well-
3. The Transparency and Disclosure of established from zakat
Zakat Authority jurisprudence in order to be
The third dimension generated from the respected and followed by zakat
interviews’ analysis relates to payers.
transparency and disclosure practices of b. Following a transparent process in
the zakat authority. Accordingly, the the collection and distribution of
transparency and disclosure of zakat zakat: The transparency of zakat
institutions are likely the most crucial collection and distribution process
factor that significantly influences the provides assurance to zakat
trust and compliance of zakat payers. A stakeholders regarding the proper
high level of transparency and disclosure handling of zakat fund until its
is believed to encourage the social and delivery to the rightful
ethical incentives of zakat payers to pay beneficiaries, whose well-being
their zakat to a particular zakat and dignities are preserved
institution. Although transparency and through zakat. A transparent
disclosure of information are two process should define the role of
different concepts, they are necessarily zakat institution as an intermediary
connected and reflected on the outcome between zakat payers and zakat
of each other. Specifically, disclosure of beneficiaries, which is achieved by
information is the primary tool that the disclosure of sufficient
regulators ensure the transparency of information.
corporates’ managements to c. The transparency of the
stakeholders and investors who, then, administration’s financial
could make informed decisions. resources and budget: Running the
In the current context, the public management of zakat institutions
and zakat payers perceive the level of requires considerable resources
transparency of zakat institutions which accommodates the
through their disclosure practices. Thus, operations’ expenses and the
the discussion of this dimension salaries of the managers and
highlighted several aspects related to employees. It is established that
transparency and disclosure, that are zakat workers are allowed to have
believed to be significant to gain the trust their share from zakat proceed
and compliance of zakat payers. Those according to the Quranic verse
aspects can be summarised as follows: stipulating the beneficiaries of
a. Identifying the rights and zakat (At-Taubah, 60), which
responsibilities of zakat indicates that zakat management’s
stakeholders within zakat laws and expenses can also be covered from
regulations: The clarity of zakat the collected zakat. Thus, zakat
laws and regulations are crucial for administrations should be
zakat stakeholders to understand transparent in disclosing their
their rights and responsibilities and share from zakat and their sources
obey the law. For example, zakat of funding. The transparency
laws must identify the rules should reveal the remunerations
Governance of Formal Zakat Institution in Saudi Arabia; Issues and….. 35

and salaries of zakat dimension with the interviewees

administrators and staff, which emphasised several aspects that related
demonstrate their accountability to to zakat assessment, collection and
the public. distribution procedures, which can be
d. Providing periodic disclosure of summarised as follow:
the collected and distributed zakat: a. Following fair Zakat assessment
Disclosure of information is an and collection procedures: The
effective way for zakat institutions perceived fairness of the
to demonstrate the transparency assessment and collection
and accountability of the procedures can be a significant
management to zakat stakeholders determinant for zakat payers’
and the public. Thus, zakat compliance. The variations of
authority should provide sufficient juristic views regarding the
information on the collected zakat methodologies of zakat assessment
fund, including statistics on zakat present a challenge to zakat
sources, whether from companies authority in implementing a
or individuals, industry types and methodology that is fair to zakat
region. Also, the details of the stakeholders. Finding such
distributed zakat should include methodology requires engaging
the impact on society and zakat zakat stakeholders and shariah
recipients. Such information is experts to agree on the appropriate
crucial to show the socio- rules followed in the assessment
economic role of zakat to the and collection of zakat in
public, which provides incentives accordance with shariah
for zakat payers to comply with principles.
zakat laws and rules. b. Providing fair mechanisms that
e. Publishing audited periodic reports ensure zakat payers’ compliance:
on zakat authority’s activities: It is established in zakat literature
Zakat authority should avail to the that the public authority can
public periodic reports and mandate the payment of zakat
publications that show their form wealth owners. Accordingly,
activities and provide detailed ensuring zakat payers’ compliance
information about the management requires that the zakat authority
of zakat. In addition, the annual might use penalties and sanctions
report should be verified by on those who refuse to pay zakat.
internal and external auditors in However, the procedures for
order to reinforce good enforcing the collection of zakat
governance practices within the must be fair and effective which
zakat authority. provide incentives for compliant
zakat payers in one hand, and the
4. Fairness of the Regulations and use of power and penalties on the
Procedures Followed by Zakat other hand.
Authority c. Following a fair zakat distribution
The fairness of zakat regulations and process: fairness should be applied
administrative procedures is crucial for when delivering zakat proceeds to
acquiring the trust of zakat payers and the rightful recipients by
encouraging compliance with zakat protecting zakat fund from being
regulations. The discussion of this
36 International Journal of Zakat Vol. 4(2) 2019

misappropriated or abused during

the distribution of zakat.

Figure 3. A summary of the Developed Framework for Improving Zakat Compliance

Source: Prepared by Author

CONCLUSION Accordingly, the issues raised by

the interviewed experts can be grouped
Saudi Arabia has a long history of into four factors. The first factor related
implementing zakat through formal to the lack of legal mechanisms that
bodies that manage the collection and guarantee zakat payers’ compliance or
distribution of zakat. Yet, there has been the limitations of zakat regulations to
limited literature that addresses the Saudi enforce zakat collection from non-
zakat system and the issues and compliant business owners. The second
challenges that could limit achieving its factor related to the perceived image of
optimum potential. Thus, this study the GAZT as a zakat institution, which is
intended to fill this gap by employing largely affected by its dual role in
qualitative interviews of 21 experts with collecting both zakat and taxes. The third
a high level of knowledge and factor related to the lack of trust, which
experience on the issues addressed in could be attributed to several issues.
this study. The interviews’ data were Such issues include concerns over the
analysed to identify major issues followed distribution procedure and the
pertaining to the governance of zakat absence of shariah supervision over the
authority in Saudi Arabia. In addition, collection and distribution processes.
this paper has developed a framework to The fourth factor concerns the perceived
improve zakat compliance by fairness of zakat assessment and
implementing good governance collection procedure followed by the
practices. GAZT. This factor includes issues
affecting the perceived fairness, such as
Governance of Formal Zakat Institution in Saudi Arabia; Issues and….. 37

calculating zakat from certain assets that Abioye, M. M. (2013). Exploratory

are disputed among shariah scholars, e.g. Study of Nigerian Zakat
loans and leased-purchased assets. Institutions and Role of
Subsequently, the second part of this Governance on Zakat Payers’
paper discussed the development of a Trust. IIUM.
framework that explains how to improve Ahmad, S., Nor, N. G., & Daud, Z.
zakat compliance through good (2011). Tax-Based Modeling of
governance practices. The developed Zakat Compliance. Jurnal
framework includes four dimensions that Ekonomi Malaysia, 45, 101–108.
were derived from the literature and the Al-Malafikh, M. (2014). ‫تطبيقات االحتساب‬
analysis of interviews’ data. ‫في مجال الزكاة لدى مصلحة الزكاة والدخل‬
In conclusion, this paper ‫ جامعة االمام‬.‫في المملكة العربية السعودية‬
provides an in-depth investigation into ‫محمد بن سعود االسالمية‬.
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the case of the Saudi zakat authority, ‫مقارنة مع بيت الزكاة في دولة الكويت‬.
GAZT. Although the scope was limited Kuwait: ZatuAlssalasil
to the Saudi context, the findings should publication- Kuwait.
provide interesting insights to Al-Qaradawi, Y. (2002). Fiqh Al-Zakah
policymakers and zakat administrators 1. Jeddah, Saudi Arabia: Scientific
on how to improve zakat payment Publishing Centre King Abdulaziz
compliance through good governance University Jeddah, Saudi Arabia.
practices. Future studies are encouraged AlDamigh, S. (2014). ‫خط الكفاية في المملكة‬
to empirically examine the ‫العربية السعودية‬. Riyadh-SA: King
generalizability of the developed Khalid Foundation.
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2013-0159

Abdulsalam Ahmed Sawmar

International Islamic University
Malaysia (IIUM
[email protected]
Mustafa Omar Mohammed
International Islamic University
Malaysia
40 International Journal of Zakat Vol. 4(2) 2019
 International Journal of Zakat Vol. 4(2) 2019 page 41-72

Zakat Management Information System: E-Service Quality

and Its Impact on Zakat Collection in Indonesia

Randi Swandaru
The National Board of Zakat, Republic of Indonesia (BAZNAS)

ABSTRACT

The purpose of this study is to examine the impact and the electronic service quality of
the national zakat management information system (SIMBA) on the national zakat
collection. This paper uses a multiple regression analysis in its explorative attempt to
illustrate the impact of SIMBA implementation on zakat collection in Indonesia. It shows
that SIMBA is positive and significantly impact the national zakat collection as well as
the human development index that is used as a proxy for the human resource management
quality of zakat institutions. Nonetheless, the population is negative and significant to the
zakat collection as endemic poverty and reluctance to pay zakat are indicated as the
reasons. Moreover, this study has succeeded in adapting and conducting an e-service
quality survey to zakat information system realm. All the tests prove that the instrument
in this study has a high degree of reliability and validity. The results show that some of
the demographic factors significantly impact the perceived performance of SIMBA.
Multiple regression analysis that is conducted in this study shows that e-service quality
dimension is positive and significant towards SIMBA’ overall quality, perceived value,
and loyalty intention. This study contributes to the zakat literature, especially in the
impact of the national zakat information system, which is pivotal in enhancing zakat
collection and poverty alleviation program funded by zakat.

Keyword: BAZNAS, electronic service quality, management information system, SIMBA,

zakat.

INTRODUCTION which will lead to reputational risk and

systemic risk that may collapse the
Despite its advancement, the growth of whole industry (Qattan, 2006)
Islamic banking and finance (IBF) has Several studies such as Asutay
derailed from its path towards becoming (2007a; 2007b; 2012) argue that it is
an instrument for financialization and paramount to return to zakat and waqf
failed to attain the social and the that can deliver developmentalism that
developmental goals as were expected. was expected from the IBF. Zakat,
ElGamal (2006) argues that IBF sadaqat, and waqf that have
development that replicating the endogenously embedded in Muslim
conventional counterpart makes this society are considered as a solution to
peculiar banking model less efficient in inequality and poverty problem. These
providing the same product. Current IBF institutions can mobilize Islamic
model is also not significantly different religious fund among the society and
in risk feature according to Abedifar et. help the less fortunate through social
al., (2015), and the reverse engineering security scheme and economic
approach to create an Islamic product empowerment program (Chapra, 2008).
may cause sharia non-compliance risk The nature of this model that promotes
42 International Journal of Zakat Vol. 4(2) 2019

social justice and welfare inclusion bureaucracy, and geographical challenge

makes it more effective than are some hindrances on the effective use
conventional finance that has excluded of zakat for poverty alleviation. On the
the poor through debt-based operation other side, a study by White (1952)
(Obaidullah & Khan, 2007). shows that management information
Empirical findings by Shirazi & system can increase public trust to non-
Amin (2009) shows that OIC countries profit organization i.e. zakat institutions
can mobilize zakat fund ranging from 1.8 and safeguard the ethics within the
percent to 4.3 percent of their GDP organization by providing transparency,
which is very potential to combat disclosure, oversight, and conflict of
poverty that endemic in Muslim interest avoidance. In addition, Ahmed
countries. Moreover, a meticulous study (2004) argues that the pivotal aspect of
indicates that about 20 OIC countries can enlarging the contribution of the zakat
solve extreme poverty by solely and waqf institutions on poverty
mobilizing and utilizing zakat funds alleviation is knowledge development
from internal sources (Mohieldin et. al., and information assimilation. Therefore,
2012). Nonetheless, the current situation this particular study is aimed to scrutiny
indicates that there are a lot of things to the impact of the national zakat
do to achieve the full potential of zakat information management system
in Muslim countries. In Indonesia, the (SIMBA) on the Indonesian zakat
largest Muslim country, although the management system and operation
zakat collection increases over the years,
it is still stuck at 1.68 percent of its total
potential (BAZNAS, 2017) AIMS, OBJECTIVES AND
Having a limited amount of RESEARCH QUESTIONS
mobilized zakat, current literature on
zakat can be categorized into three This paper aims to evaluate the
groups. The first one is the literature that performance of SIMBA by examining its
aims to optimize the utilization of zakat impact on zakat collection. In addition,
by looking for a zakat disbursement this study aims at examining the
model that can significantly reduce electronic service quality dimensions of
poverty in Muslim countries. The second SIMBA as perceived by the operators to
group is literature that trying to increase capture the gap between the expected
the actual collection by looking for and the real service quality of this
determinants that significantly induce system.
Muslim to pay zakat. The last group, In fulfilling the aims, the
which is more scarce than the other two, following objectives are developed:
is literature that scrutiny the zakat 1. Developing an advanced
management, operation, and understanding of the zakat
performance. management systems;
Interestingly, the study in this 2. Assembling secondary data on
field, especially on the zakat zakat transactions through
management information system is BAZNAS and conducting a survey
pivotal to effectively eradicate poverty with SIMBA operators on their
and boost collection. For instance, a perceptions towards the system;
study by Othman & Noor (2012) in 3. Examining the correlation between
Malaysia finds that inaccurate database the implementation of SIMBA and
of asnaf, under-identification of asnaf, the zakat collection in respective
local BAZNAS offices;
Zakat Management Information System: E-Service Quality and…. 43

4. Evaluating the performance of the (2009) show that OIC countries can
national zakat information system mobilize zakat fund ranging from 1.8%
using e-service quality. to 4.3% of their GDP in annual basis. In
Pakistan, the total zakat collection is
In line with identified aims and
estimated up to 7% of its GDP Shaikh
objectives, the following research
(2014) whereby in Indonesia it is about
questions are developed:
3.4% of its GDP in 2010 Firdaus, et. al.
1. Has BAZNAS and SIMBA
(2012). Moreover, Sapingi, et. al. (2011)
improved the collection of zakat as
conclude that educational background
indicated in the total zakat
positive and significantly correlated with
collection?
the intention to pay zakat. On the
2. Has the SIMBA system fulfilled
contrary, lack of institutional support
the expectations of the operators?
results in zakat ignorance (Ummulkhayr,
et. al., 2017). Other than that, studies on
LITERATURE REVIEW the zakat collection discuss fiqh related
matters. Kahf (1989) extends
Zakat Management System: A Qaradawi’s work on fiqh zakat by
Worldwide Survey creating three zakat estimation
approaches namely the traditional fiqh
There is a large number of academic and position, Qaradawi’s view, and modified
professional research on zakat that can Qardawi’s view by adding zakat on a
be classified into three major categories. fixed asset at the premium of 2.5% of
The following part provides a survey of their stock.
such topical areas and points out the gap Differ from the two discussed
in the literature that significantly be topic above, the third group, studies on
fulfilled by this research. the zakat management system and its
First, the literature on zakat as a performance are quite limited if not
socioeconomic intervention. Most of the scarce. One can expect the reason is that
studies in this group elaborate how zakat this particular type of study needs a
can reduce poverty and inequalities with stronger involvement and attachment to
evidence from a lot of Muslim countries operational activities of zakat in the
(see, among others: Abdelbaki, 2013; sense of assembling primary data.
Kasri, 2014; Ali & Hatta, 2014; Kareem Nonetheless, there are some studies that
& Bankole, 2016). In addition, Huq scrutiny the performance of zakat
(1993) elaborates how zakat not merely institutions such as Noor (2012) and
addressing poverty but also sustain Embong, et. al. (2014) who use balance
economic growth, while Kahf & Yafai scorecard for assessing the performance
(2015) suggest that zakat that can give of the zakat institutions in Malaysia.
significant relief to governmental budget Moreover, Wahab & Rahman (2012)
in providing social assistance and measure the productivity growth of zakat
security. Similarly, risk-sharing institutions in Malaysia using data
contracts and zakat as part of the envelopment analysis. Using the same
redistributive instrument in Islam can methodology, Hamzah & Krishnan
induce financial inclusion (Iqbal & (2016) finds that excessive usage of staff
Mirakhor, 2012). has caused inefficiency in the zakat
Secondly, studies that elaborate institutions in Malaysia. Similarly,
zakat estimation in Muslim countries and Rusydiana & Al-Farisi (2016) tells that
its determinant factor. Shirazi & Amin high operational cost is the source of
44 International Journal of Zakat Vol. 4(2) 2019

inefficiency in zakat institutions in that MIS can ease NGO in data

Indonesia. Wahab & Rahman (2013) documentation and analysis,
emphasizes the importance of performance monitoring and strategic
information and communication decision making. Moreover, MIS will
technology as well as the computerized help NGO to increase credibility and
zakat system to improve zakat accountability by presenting their
institutions’ efficiency. activities to the public. It might also help
Other than that, research on the in safeguarding the four pillars of ethics
zakat management information system is in NGO, namely disclosure,
an area that needs much further transparency, avoidance of conflict of
development. This aligns with several interest, and oversight as elaborated by
findings in some studies in which zakat (White, 1952)
institutions do not successfully address Moreover, management
the poverty and equality problem information system can ease the zakat
(Mahamod, 2011; Embong & Nor, administrator to run the operation
2013). Inaccurate database of asnaf, efficiently as it can lower the cost of
under-identification of asnaf, dissemination of information (O’Connor
bureaucracy, and geographical challenge & Martinsons, 2006). In this regard,
are some hindrances on the effective use management information system can
of zakat for poverty alleviation (Othman reduce unnecessary cost by enlarging the
& Noor, 2012) that can be resolved by usage of internet and online transaction
optimizing the zakat management system. This is absolutely relevant to the
information system. fact that the amount of zakat that can be
This emphasizes the importance utilized to organize zakat is limited to
of management information system one eight in accordance with Hanafi’s
which is able to tackle the entire process ruling. Therefore, integrating
of zakah giving, such as an information management information system to the
system benefiting from the latest zakat operation is essential to enhance
technology that can robustly conduct the zakat management system.
such identification and ease the zakat
management in modern time. This The Emergence and Development of
identification is important both for SIMBA
muzaki and mustahiq. For muzaki, the The current zakat act has several direct
identification may be relevant for implications to the national zakat
deducting or reducing the amount of tax management system.
payment. On the distribution side, such i. First, it provides the legal and
identification is important to avoid political assurance from the state
redundant disbursement so that it can for every Moslem to perform zakat
attain equitable and fair zakat under positive law. It also
distribution. Such identification is also emphasizes the role of zakat in
important to monitor the progress of national socio-economic
zakat recipient and the effectiveness of development, especially in
the zakat program. bringing public welfare and social
Several studies also have justice (Constitutional Court of
revealed the importance of management The Republic Indonesia, 2012).
information system (MIS) in the non- ii. Secondly, it acknowledges equally
profit organization (NGO) such as zakat
the role of the state and civil
institution. Dash & Mishra (2014) argue society in administering zakat. It
Zakat Management Information System: E-Service Quality and…. 45

does not impose zakat to the database. Mustahik database

Moslem or perceive it as state integration is one of the benefits of
income, but put government a unified and integrated zakat
budget to enhance the benefits of management system that can avoid
zakat to the society. On the other redundant distribution, prevent
hand, it recognises the role of civil inequality disbursement between
society both in administering and regions, and become a baseline of
supervising zakat activities. Nasar performance measurement or
(2014) argues that zakat policymaking (Beik, 2014). This
management in Indonesia is not aligns with Ahmed (2004) states
considered as totalitarianism that the performance of zakat
where the state is the only institution to combat poverty
legitimate body to manage zakat hinges on the information
and not also considered as secular exchange in which the zakat
where the practice of zakat left institution can gain trust from the
behind to the society without any customer and increase its
support from the government; credibility.
Lastly, Kustiawan (2014) and
iii. It induces to the unified and
Hafidhuddin et. al. (2015) articulates the
integrated zakat management zakat act No.23/2011 into a house
system whereby zakat institutions building block as illustrated in Figure 1.
conduct their activities under a
which is also adapted in the years
standard regulation and integrate strategic planning of national zakat
their report into an agreed platform management (BAZNAS, 2016a).
to create a national report and

Figure 1. Zakat Management System Building Blocks

Source: BAZNAS (2016a:26)

The emergence of SIMBA This act assigns BAZNAS as the leader

should be considered as a logical of national zakat management. Having
consequence of Zakat Act No. 23/2011. this role, BAZNAS is charged with
46 International Journal of Zakat Vol. 4(2) 2019

several tasks as identified below that will (iii) To eradicate poverty by

be impossible to conduct without a optimizing the zakat fund
robust national zakat information utilization and consider some
system1: principles such as equity and
(i) To implement the principles of fairness in each region;
zakat act, i.e. sharia-compliant, (iv) To provide a zakat transaction
trust, expedience, justice, legal receipt for payers that can be
certainty, integrated, and used as a tax deduction; lastly
accountable to the national zakat (v) To conduct national zakat
management system; hierarchical reporting system.
(ii) To increase the service
effectiveness and efficiency of
national zakat management;

Figure 2. National Zakat Reporting Structure

Source: BAZNAS (2016a: 33)

On October 2012, with the help SIMBA as the national zakat

of Bank Rakyat Indonesia Syariah under management information system
its CSR scheme, BAZNAS launched (Republika, 2012). SIMBA has two main

1
The tasks are derived from (Zakat Act, 2011).
See article 1,2,3,6,7,15,19,23,26,28, and 29
Zakat Management Information System: E-Service Quality and…. 47

functions: recording collection and central office in Jakarta. Having said

disbursement of zakat and creating a that, BAZNAS has put information
report based on the submitted data which system and technology as one out of six
works under the zakat information aspects in the Zakat Strategic Planning
management system. In addition, and Roadmap 2016-2020. The plan
SIMBA also consists of supporting expects that all zakat institutions
organizational information system that including 514 regional BAZNAS and
maintains several information systems LAZ have implemented SIMBA by the
such as finance, human resource, end of 2017. However, the dissemination
logistic, public affairs and others. It is a of this technology thus far has reached
web-based system that connects each only 108 out of 514 office in the
BAZNAS office in every region to respective cities (BAZNAS, 2017).
BAZNAS headquarter in Jakarta. Although only about 21% of BAZNAS
Therefore, this feature allows SIMBA to regional offices that have been
create a real-time online report of implemented SIMBA, it is necessary to
national zakat activities at each level in measure the contribution of this
every region. This model is even more breakthrough model to the national zakat
suitable to produce the national zakat management system.
hierarchical report as mandated by the
zakat act. Figure 2 shows the structure of
the national zakat reporting system. RESEARCH DESIGN
Besides representing a reporting
structure, above also shows some of the A number of research design methods
national zakat management system are available; exploratory research,
stakeholders; such as president, MORA, explanatory research, descriptive
parliament, governor, and others. research, survey research and case study
Nonetheless, the main stakeholders of (Sekaran & Bougie, 2013). This research
zakat operation are muzaki and mustahik is constructed as an exploratory study
that directly involved in zakat activities. which aims at exploring participants’
Therefore, the development of SIMBA is views on the operation of zakat
aimed to ultimately benefiting them. For management information system. In
instance, in the front end, SIMBA addition, since it focuses on a particular
connects with banks, e-commerce, organisation, that is BAZNAS, this study
banks, payment gateway, and other should also be considered as a case
payment points to easing both to study. Furthermore, since further data
collection and disbursement activities. In analysis on the primary data through
the backend, all of the data submitted to econometrics specification is conducted,
SIMBA are used to create reports that this study also benefits from being an
latter can be utilized for strategic explanatory study.
planning, decision making, research, and
public disclosure.
The complexity and huge amount RESEARCH STRATEGY
of data within time and resource
This study applies two different
constraint make it impossible to create a
approaches as its strategies to answer the
national zakat report manually unless
research questions. An inductive
utilising a robust national zakat
approach is used to measure the impact
information system in each regional
of SIMBA on the national zakat
office that integrated together with the
collection. This study observes the
48 International Journal of Zakat Vol. 4(2) 2019

existence or non-existence of SIMBA in national zakat collection, namely total

85 cities and attempts to offer a bottom- zakat and infaq collection (collection),
up abstraction of its impact on the total local population, gross domestic
national zakat collection together with regional product (GDRP), GINI
some other control variables. On the coefficient (GINI), Human Development
other hand, the deductive approach is Index (HDI) and the existence of
applied to measure the electronic service SIMBA in respective city, as depicted in
quality perceived by the SIMBA Table 1. All these data are in local level
operator’s opinions at nation-wide level. creating 170 observations-strongly
balanced panel data (85 regions during
2014-2015). Nonetheless, due to data
ECONOMETRICS MODEL availability constraints in some
SPECIFICATION AND VARIABLES provinces where GINI coefficient for
some cities is not found, GINI
There are six key data in this research to coefficient of its respective provinces are
measure the impact of SIMBA on the used to fill the gap as a proxy.

Table 1. Variables Description

Variables Notation Source Unit

Total Zakat and Infaq Log of Collection in Indonesian
LogCollection BAZNAS
Collection rupiah
Total Local Population LogPop BPS Log of Population Number
Index (1 to 100, 100=the highest
Human Development Index HDI BPS
score)
Real Gross Domestic Regional Indonesia million rupiah per
GDRPcap BPS
Product (GDRP) percapita capita (million IDR/cap)
GINI Coefficient GINI BPS Index (0 to 1, 1=the highest score)
Dummy varable:1 if SIMBA
SIMBA Implementation SIMBA BAZNAS
exist; 0 otherwise

Source: prepared by Author.

Accordingly, the econometric RESEARCH METHOD FOR DATA

model for this research is a linear COLLECTION
regression as illustrated below:
Questionnaire Survey Design
𝐿𝑜𝑔𝐶𝑜𝑙𝑙𝑒𝑐𝑡𝑖𝑜𝑛𝑖𝑡 = 𝛼 +
𝛽1 𝐿𝑜𝑔𝑃𝑜𝑝𝑖𝑡 + 𝛽2 𝐻𝐷𝐼𝑖𝑡 + The questionnaire is structured with
𝛽3 𝐺𝐷𝑅𝑃𝑐𝑎𝑝𝑖𝑡 + 𝛽4 𝐺𝐼𝑁𝐼𝑖𝑡 + close-ended questions consisting of four
𝛽5 𝑆𝐼𝑀𝐵𝐴𝑖𝑡 + 𝜀𝑖𝑡 (1) parts. Part I screens the respondents that
do not have any experience in using
where, α: constant; i: city; t: year;𝛽: SIMBA, while Part II measures
slope; ε: error term, the rest of the respondents’ interaction with SIMBA,
variables are defined in Table 1. including usage intensity and training
participation. Part III consists of 4 main
questions that measure the importance
and perception of e-service quality
dimensions; overall quality; perceived
Zakat Management Information System: E-Service Quality and…. 49

value; and loyalty of customers towards al. (2009). In this study, the
SIMBA. The responses to the questions questionnaire is developed and adapted
regarding e-service quality dimensions to zakat operation realm as a first draft
and customer loyalty are recorded using questionnaire. Then, this draft is used as
5-point Likert scale, whereas the SIMBA an initial document in a focus group
overall quality and the perceived value discussion that involved one head
are recorded under 10-point Likert scales division of BAZNAS IT & Reporting;
ranging from poor to excellent. Part IV one IT manager, and two BAZNAS
records the demographic information of system analysts, as they are involved in
each of the respondents. The initial SIMBA development and
questionnaire can be viewed in Table 2. understand all the features of SIMBA.
Differ from the initial service The focus group discussion has
quality model developed by contributed to the questionnaire mainly
Parasuraman et. al. (1988) that is used to in adapting and translating the initial e-
measure people-delivered service, the e- service quality statements into zakat
service quality is developed by operation realm. Furthermore, there
Parasuraman et. al. (2005) to measure were 13 people involved in a pilot test
service that is delivered electronically which helped to improve the semantical
via web sites. This questionnaire has translation of several questions, as the
been widely adapted to other virtual questionnaire is administered in the
web-based services such as social media Indonesian language. The modified e-
service of university library Kim (2015) service quality statements that are used
or e-government service website Jun et. in this study are depicted in Table 2.

Table 2. Modified E-Service Quality Statements

Dimension Item Modified E-Service Quality Statement for This Study

Efficiency EFF1 SIMBA makes it easy to find which service I need
EFF2 SIMBA makes it easy to get anywhere on the site
EFF3 SIMBA enables me to complete a zakat transaction quickly
EFF4 Information provided in SIMBA is well organized
EFF5 SIMBA loads its pages fast
EFF6 SIMBA is simple to use
EFF7 SIMBA enables me to get on to it quickly
EFF8 SIMBA is well structured
System SYS1 SIMBA is always available fot service
Availability SYS2 SIMBA launches and runs right away
SYS3 The pages of SIMBA display normally
SYS4 There is no error occurred during using SIMBA
Fulfilment FUL1 SIMBA offers service when necessary data and materials are submitted
FUL2 SIMBA processes transaction within a suitable time frame
FUL3 SIMBA provides information that I expect quickly
FUL4 SIMBA gives reliable service
FUL5 Service that available in SIMBA is fully accessible and functioned well
FUL6 SIMBA is truthful about its offered services
FUL7 SIMBA makes accurate promises about its service
Privacy PRI1 SIMBA protects muzaki and mustahik personal identity
50 International Journal of Zakat Vol. 4(2) 2019

Dimension Item Modified E-Service Quality Statement for This Study

PRI2 SIMBA does not leak the muzaki and mustahik information that I input to
public
PRI3 SIMBA protects my submitted materials’ information

Source: Prepared by Author.

Then, the questionnaire was research, it is used to measure the 22

conducted using an online platform multiple items in four different
called ‘surveymonkey’ starting from 9 dimension of e-service quality towards
August to 14 August 2017. It is the dependent variables as illustrated in
necessary to mention that the Figure 3.
respondents in this study are the operator
of SIMBA as the end-user of the system.
Hence, the population of the survey is all
SIMBA operator in Indonesia. The
survey closed with 193 respondents
giving their answers to the self-
administered questionnaires; however,
only 133 questionnaires deemed to be
useful for analysis due to non-
Figure 3. E-Service Quality Model
completion of the rest.
Source: Santouridis et. al. (2012)
Secondary Data Collection
Two primary data sources for the
secondary data used in this study are RESULTS AND DISCUSSION
from Indonesian Office for Statistics
(BPS RI) and BAZNAS. The year 2014- The Regression Results
2015 is chosen in this study because this The initial analysis commences in this
period represents the best availability of section with the regression analysis in
national zakat collection as well as the measuring the impact of SIMBA on the
availability of the control variables (i.e. national zakat collection, for which the
population, GINI, HDI, and GDP per key findings are shown in Table 3. As
capita). Consequently, this research is can be seen, all variables are statistically
unable to use data from all regions. significant in explaining the log
Having cleaned all the data, eventually collection per capita of zakat and infaq
only 85 regions that have proper data. except the GDRP per capita and GINI
Consequently, this research in total has coefficient. There are 170 observations
170 observations-strongly balanced captured in the regression model and
panel data (85 regions during 2014- resulting R-squared is at 0.409 which
2015). implies that the model in this research
can explain about 40.9 percent of the
Multiple Regression Analysis variation observed, which is quite
This method is applied to measure the satisfactory. The implementation of
impact of more than one independent SIMBA is significant at 1 percent level
variables on the dependent variables and has coefficient at 0.3068. It means
(Sekaran & Bougie, 2013). In this that SIMBA significant in positively
Zakat Management Information System: E-Service Quality and…. 51

increase the national zakat and infaq cities observed in this study are outside
collection by 0.3068 in magnitude. This Java, where the poverty rate is high
relevant with findings in Wahab & (Wibisono, 2017). Other than that, there
Rahman (2013) that argues that are still a lot of people that do not want
information technology can increase the to pay zakat via zakat institutions but
performance of zakat institutions, in this directly to the poor as stated by Teten
regard is zakat collection Kustiawan, BAZNAS Managing
Director, in Republika (2013). In
Table 3. Regression Results addition, the HDI that used as the proxy
Dependent Variable: Zakat Collection of human resources quality in respective
regional BAZNAS office is significant at
Variables Model1
10% level. Nonetheless, the magnitude
LogPopulation -0.9503***
(0.0942) of this proxy is quite low (0.021) to the
GDRPCap 0.0003 dependent variable. However, it implies
(0.0003) that one unit increase in HDI can
GINI 1.6777 increase zakat collection by 0.021.
(1.057) Table 3 shows the GRDP per
HDI 0.0210*
(0.0106)
capita is not significant which means
SIMBA 0.3068*** statistically there is no correlation
(0.1072) between zakat and infaq collection with
Constant 6.7968*** GDRP per capita. Figure 4 can briefly
(0.9220) illustrate that the trend of zakat
Observations 170 collection in the last 15 years is not
R-squared 0.409
correlated with the growth of national
Notes: Standard errors in parentheses
*** p<0.01, ** p<0.05, * p<0.1
GDP. This can perhaps be explained by
people’s willingness to pay rather than
Moreover, the log population is searching for the ways they can avoid or
also significant at 1 percent but has a pay the minimum. Lastly, the GINI
negative coefficient. This can be coefficient is also not significant. One
interpreted that population brings a may argue that the wealth disparity in the
burden instead of a favour to the total observed cities perhaps increases the
collection. A further explanation can be collection. Further research is needed to
emanated from the fact that 70 out of 85 examine this phenomenon.

Figure 4. The National Growth of Zakat Collection

52 International Journal of Zakat Vol. 4(2) 2019

No Measure Label Item Frequency Percent

1 Male 81 60.9%
1 Gender 0 Female 52 39.1%
Total 133 100.0%
1 < 20 years 1 0.8%
2 20-25 years 32 24.1%
3 26-30 years 53 39.8%
4 31-35 years 33 24.8%
2 Age
5 36-40 years 11 8.3%
6 41-45 years 2 1.5%
7 > 55 years 1 0.8%
Total 133 100.0%
0 Single 52 39.1%
3 Marriage 1 Married 81 60.9%
Total 133 100.0%
1 High School 24 18.0%
2 Diploma 10 7.5%
4 Education 3 Bachelor 93 69.9%
4 Postgraduate 6 4.5%
Total 133 100.0%
1 less than IDR 1.000.000 21 15.8%
2 IDR 1.000.000 - IDR 1.999.999 60 45.1%
3 IDR 2.000.000 - IDR 2.999.999 30 22.6%
5 Salary 4 IDR 3.000.000 - IDR 3.999.000 19 14.3%
5 IDR 4.000.000 - IDR 4.999.000 2 1.5%
6 more than IDR 5.000.000 1 0.8%
Total 133 100.0%
1 Daily 92 69.2%
2 Weekly 15 11.3%
6 Usage Intensity 3 Monthly 22 16.5%
4 Yearly 4 3.0%
Total 133 100.0%
1 Never 6 4.5%
2 1 time 43 32.3%
7 Training Participation 3 2-4 times 71 53.4%
4 5 or more 13 9.8%
Total 133 100.0%
1 Sumatra 47 35.3%
2 Jawa 41 30.8%
3 Kalimantan 16 12.0%
8 Location (Residence) 4 Sulawesi 19 14.3%
5 Bali dan Nusa Tenggara 8 6.0%
6 Maluku dan Papua 2 1.5%
Total 133 100.0%

Table 4. Respondent Demographic Distribution

Source: prepared by Author.

Respondents Characteristics male and 39.1 percent female. Moreover,

the respondents of this study can be
Out of about 240 total SIMBA
categorized into four generations in
operator throughout the country, 193
referring to PewResearchCenter (2010);
have responded the questionnaire with
Alexander & Sysko (2012); and
only 133 responses that are valid for data
(Deloitte, 2015). The first group is baby
analysis. Table 4 summarises the
boomer who born before 1965 (age>55
respondent demographic distribution.
years). This group is represented by 0.8
The respondents consist of 60.9 percent
percent of in the sample. Secondly, about
Zakat Management Information System: E-Service Quality and…. 53

9.8 percent respondents who are born in participants have never been in training
1962-1982 (age: 36-45 years) who are throughout their career. Moreover, most
usually called as generation X. The most of the respondents have an intensive
dominant respondent’s group (88.7 interaction with SIMBA as 69.9 percent
percent) is millennial or generation Y use SIMBA in the daily basis and 11.3
that is born in 1982-2002 (age: 20-35 percent on weekly basis. Only 16.5
years). The last group is Generation Z percent and 3 percent of respondent use
that is born after 2002 or aged less than SIMBA every month and year
20 years, which is only 0.8 percent of the respectively.
respondents. It should be noted from Table 4
In addition, similar to gender that most of those high education level;
distribution, most respondent (60.9 intensive training; and high workload
percent) the, while the singles constitute respondents are paid poorly: about 15.8
39.1 percent of the sample. As can be percent are paid below IDR 1,000,000
seen in Table 4, most of the respondents and 45.1 percent earn between IDR
are highly educated with 69.9 percent 1,000,000 to IDR 1,999,999. For the
have a bachelor degree and 4.5 percent record, 35.3 percent respondent live in
have postgraduate degrees indicating a Sumatra and 30.8 percent live in Java,
good sign for their capability in where the average minimum wage is
comprehending and responding to the IDR 2,019,236, (Deny, 2016) which
questionnaire. Only 7.5 percent and 18 implies that they are underpaid reflecting
percent of the respondents have diploma the nature of the economy in the country.
level and high school education, Bearing in mind that 60.9 percent
respectively. respondent are married which makes this
As for skills training, 53.4 situation even more difficult for them as
percent of respondent attended SIMBA the limited salary can be a huge
training for 2 to 4 times and 9.8 percent constraint in their life. In this sense,
attended more than 5 training sessions. BAZNAS should pay attention to it in
About 32.3 percent respondents trained order to prevent human resources drain
at least once and only 4.5 percent of the out.

Table 5. E-Service Quality Dimension and Dependent Variables Descriptive Statistics

Mean of Summed
Number Mean Std Deviation (mean)
Factors Score
of items
Impo. Perf. Impo. Perf. Impo. Perf.
Efficiency 8 4.43 4.33 35.43 34.61 0.41 0.35
E-S-Qual System Availability 4 4.24 4.18 16.96 16.71 0.62 0.52
Dimensions Fulfillment 7 4.41 4.35 30.87 30.47 0.33 0.27
Privacy 3 4.55 4.46 13.65 13.37 0.26 0.16
Overall Quality 1 8.45 8.45 1.51
Criterion
Perceived Value 4 8.57 34.29 0.52
Variables
Loyalty Intentions 5 4.63 23.15 0.28

Source: prepared by Author.

Descriptive Statistics & Gap Analysis questionnaire. As can be seen from the
responses, 22 e-service quality item in 5
Table 5 describes and summarises the
respondent’ responses towards the Likert scores are 4.41 for importance and
4.33 for performance. It also shows that
54 International Journal of Zakat Vol. 4(2) 2019

privacy is the dimension with the highest visualization can help to analyse which
mean scores both for the importance and item or dimension that is perceived
performance at 4.55 and 4.46 important, performed well or bad, and
respectively. Moreover, the 22 items how much is the gap. This study
mean summed score is 96.92 for provides two visualization model which
importance and 95.15 for performance, are radar chart and quadrant chart.
with a possible range of 22 to 110. The Figure 5 illustrates that most of
means of overall quality and perceived the item’s performance scores are lower
value are 8.45 and 8.57, with a possible than its importance scores. Only item
range of 1 to 10 while the means of SYS4 (+0.03) and FUL1 (+0.05) that
respondent’ loyalty intentions is 4.63, exceed their importance score. SYS4
with a possible score of 1 to 5. The mean represents that there is no error during its
of summed score for each criterion are service while FUL1 represents that
8.45; 34.29; and 23.15, respectively. The SIMBA offers service after necessary
table also provides the means of standard data is submitted. On the contrary, the
deviation for each dimension and largest gap perceived by the operator is
criterion variables. in item FUL6 (-0.18) and SYS2 (-0.19).
The e-service quality FUL6 score illustrates that SIMBA is not
questionnaire can capture the gap quite truthful about its offered services
between respondent’s expectation and while SYS2 score illustrates that SIMBA
the perceived performance of each e- is perceived does not launch and run
service quality item. Gap analysis right away once it is accessed.

Figure 5. Radar Chart of 22 Items’ Importance and Performance Score

Adapting Lynch et.al. (1996) importance score as x-value and putting

model in applying quadrant chart for the gap between the importance and
strategic planning, this study creates the performance score as the y-value.
four quadrants by putting the mean of Having said that, the first quadrant is an
Zakat Management Information System: E-Service Quality and…. 55

area where the item is perceived not so important and scores low whereas
important and scores high while quadrant for is an area with high score
quadrant two is an area with high but low importancy. Figure 6 ilustrates
importance but low score. Moreover, the plot of each item in the quadrant
quadrant three is where item is perceived chart.

Figure 6. E-Service Quality Quadrant Chart

Table 6 summarizes the two that need to be improved in terms of

recommendation for each item. its performance in contrast to its
BAZNAS as the main stakeholder importance. In addition, there are six
should retain items in quadrant one items in quadrant four that have been
which is perceived important and have a perceived good but less important which
high score. Those items are the essentially need to be repositioned in its
information structure, service importance value. Lastly, in Pareto
availability, website display, and optimality, BAZNAS should not focus
SIMBA performance in safeguarding the or ignore EFF5 and EFF8 in quadrant
information that is submitted to it. four as they have low score while not
Moreover, there are ten items in quadrant perceived important by the respondent.

Table 6. Items and Recommendations for Each Quadrant

Quadrant Recommendations Items

1 Retain EFF4; SYS1; SYS3; PRI2
2 Improve Performance EFF1; EFF6; EFF7; FUL2; FUL3; PRI3; SYS2; PRI1; FUL6; EFF3
3 Ignore or Improve Importance EFF5; EFF8
4 Reposition EFF2; FUL1; FUL4; FUL5; FUL7; SYS4

Source: prepared by Author.

56 International Journal of Zakat Vol. 4(2) 2019

Reliability the minimum value to accept that the

Cronbach’s Alpha Statistical Test is data is reliable (Nunnally & Bernstein,
2013). The result of this test is also in the
applied to measure data reliability using
range of the previous study by Kim
SPSS 20 program. With a possible range
(2015) who studied e-s quality in library
from 0 to 1, the higher result of this test
service and the original e-s quality
represents the higher data reliability it
questionnaire by Parasuraman et. al.
offers. Table 7Error! Reference source
(2005). The test shows that there is not
not found. shows that the overall
any item that has a low correlation to the
Cronbach’s Alpha coefficient is 0.973
total score which implies that it has high
and for each dimension is ranging from
internal consistency.
0.829 to 0.954 which is higher than 0.7,

Table 7. Reliability Statistics of E-Service Quality Dimensions

E-S-Qual Dimensions Number of items Cronbach's Alpha

Overall Dimension 22 0.973
Efficiency 8 0.946
System Availability 4 0.829
Fulfillment 7 0.954
Privacy 3 0.887

Source: prepared by Author.

Validity service quality use a stricter threshold on

KMO results such as Mohd-Shariff
Factor analysis is conducted in this study
(2013) and Kim (2015) which use 0.6
to measure the data validity. It is a
and 0.7 respectively as the threshold on
multivariate method that ensures the
their study.
dimension in the instrument has
Table 8. displays the result of
accurately represented the theory or
KMO and The Barlett’s test. The overall
concept that is applied the study, which
KMO value in this study is 0.943
is e-service quality. It also indicates
whereby the each dimension’s KMO
whether the item in a particular
value ranges from 0.698 to 0.924 which
dimension is already fit and appropriate
exceeds 0.5 and 0.6, the minimum
or should it be categorised under other
dimensions (Sekaran & Bougie, 2013). threshold for KMO test that used by
Yusoff (2010) and Mohd-Shariff (2013).
In this sense, factor analysis is conducted
Even, it still exceeds 0.7 the threshold
whether the 22 items of e-service quality
used by Kim (2015). Only privacy
has correctly categorised under their
dimension that is slightly under 0.7 at
specific dimensions. Each item is
0.698 which is still tolerable. In addition,
considered valid if the Kaiser-Meyen-
all dimension are significant on the
Olkin (KMO) sampling adequacy
Bartlett's Test of Sphericity with p-value
exceeds 0.5 while the Bartlett's Test of
less than 0.05.
Sphericity is significant (p-value < 0.05;
see: Yusoff, 2010). Other studies on
 Zakat Management Information System: E-Service Quality and…. 57

Table 8. Kaiser-Meyer-Olkin and The Bartlett’s Test Result

Bartlett's Test of Sphericity

KMO Measure of
E-S-Qual Dimensions Approx.
Sampling Adequacy df Sig.
Chi-Square
Overall Dimensions .943 3144.658 231 .000***
Efficiency .923 908.127 28 .000***
System Availability .774 252.937 6 .000***
Fulfillment .924 964.451 21 .000***
Privacy .698 245.123 3 .000***
Note:***, **, * denotes significant in 1%, 5%, 10% respectively

Mann-Whitney U Test status groups, towards the perceived

performance of the 22 items in e-service
Mann-Whitney U Test is applied to
quality questionnaire and the SIMBA’
identify whether there is a significant
overall quality, perceived value, and
difference between across control
loyalty intention.
variables, such as gender and marital
Table 9. Mann-Whitney U Test (Gender-1)
Mean Mean Mean Mean
Item Gender N Sig. Item Gender N Sig. Item Gender N Sig. Item Gender N Sig.
Rank Rank Rank Rank
Female 52 65.18 Female 52 65.61 Female 52 70.46 Female 52 68.03
EFF1 Male 81 68.17 0.628 EFF7 Male 81 67.9 0.714 FUL1 Male 81 64.78 0.357 FUL6 Male 81 66.34 0.783
Total 133 Total 133 Total 133 Total 133
Female 52 63.98 Female 52 68.6 Female 52 67.98 Female 52 67.34
EFF2 Male 81 68.94 0.425 EFF8 Male 81 65.98 0.676 FUL2 Male 81 66.37 0.790 FUL7 Male 81 66.78 0.929
Total 133 Total 133 Total 133 Total 133
Female 52 64.27 Female 52 68.12 Female 52 65.18 Female 52 63.48
EFF3 Male 81 68.75 0.440 SYS1 Male 81 66.28 0.766 FUL3 Male 81 68.17 0.629 PRI1 Male 81 69.26 0.329
Total 133 Total 133 Total 133 Total 133
Female 52 66.14 Female 52 67.21 Female 52 67.42 Female 52 64.95
EFF4 Male 81 67.55 0.821 SYS2 Male 81 66.86 0.955 FUL4 Male 81 66.73 0.910 PRI2 Male 81 68.31 0.575
Total 133 Total 133 Total 133 Total 133
Female 52 69.01 Female 52 69.29 Female 52 67.56 Female 52 63.24
EFF5 Male 81 65.71 0.606 SYS3 Male 81 65.53 0.537 FUL5 Male 81 66.64 0.883 PRI3 Male 81 69.41 0.281
Total 133 Total 133 Total 133 Total 133
Female 52 68.76 Female 52 60.13
EFF6 Male 81 65.87 0.636 SYS4 Male 81 71.41 0.086
Total 133 Total 133

Gender Group In a similar manner, findings in

Table 9 displays that there is no gender Table 10 support that there is no
impact towards the perceived significant difference between male and
female respondents in perceiving
performance of 22 items in e-service
SIMBA overall quality, perceived value,
quality as there none of the items that are
and loyalty intention. Accordingly,
significant at 10% confidence level.
BAZNAS should not treat gender
Hence, this data support that there is no
differently in developing and enriching
significant difference between genders
SIMBA in the future.
in perceiving the performance of
SIMBA.
 58 International Journal of Zakat Vol. 4(2) 2019

Table 10. Mann-Whitney U Test (Gender 2)

Mean Mean
Criterion Gender N Sig. Gender SEX N Sig.
Rank Rank
Female 52 69.35 Female 52 66.56
QUA1 Male 81 65.49 0.558 LOY1 Male 81 67.28 0.890
Total 133 Total 133
Female 52 69.06 Female 52 63.84
VAL1 Male 81 65.68 0.608 LOY2 Male 81 69.03 0.369
Total 133 Total 133
Female 52 70.31 Female 52 65.85
VAL2 Male 81 64.88 0.409 LOY3 Male 81 67.74 0.736
Total 133 Total 133
Female 52 67.39 Female 52 64.28
VAL3 Male 81 66.75 0.922 LOY4 Male 81 68.75 0.359
Total 133 Total 133
Female 52 69.78 Female 52 69.13
VAL4 Male 81 65.22 0.483 LOY5 Male 81 65.63 0.428
Total 133 Total 133

Marital Status Group at 5% significance level for LOY1

Table 11 supports that there is no marital (71.17) and at 10% for LOY2 (70.77);
and LOY4 (70.43). They show that
status impact on the perceived
married respondents are more loyal
performance of 22 items in e-service
towards SIMBA than single respondents.
quality. Nonetheless, Table 12 shows
They are more tend to say positive
that there are significant differences
things, recommend other, and use
between single and married respondents
SIMBA again in the future.

Table 11. Mann-Whitney U Test (Marital Status-1)

Mean Mean Mean Mean
Item Marriage N Sig. Item Marriage N Sig. Item Marriage N Sig. Item Gender N Sig.
Rank Rank Rank Rank
Single 52 66.31 Single 52 61.73 Single 52 63.54 Single 52 63.22
EFF1 Married 81 67.44 0.854 EFF7 Married 81 70.38 0.167 FUL1 Married 81 69.22 0.357 FUL6 Married 81 69.43 0.312
Total 133 Total 133 Total 133 Total 133
Single 52 65.21 Single 52 61.92 Single 52 62.03 Single 52 62.82
EFF2 Married 81 68.15 0.637 EFF8 Married 81 70.26 0.183 FUL2 Married 81 70.19 0.178 FUL7 Married 81 69.69 0.268
Total 133 Total 133 Total 133 Total 133
Single 52 66.85 Single 52 63.59 Single 52 64.81 Single 52 65.38
EFF3 Married 81 67.1 0.965 SYS1 Married 81 69.19 0.362 FUL3 Married 81 68.41 0.560 PRI1 Married 81 68.04 0.654
Total 133 Total 133 Total 133 Total 133
Single 52 65.58 Single 52 65.66 Single 52 66.51 Single 52 62.91
EFF4 Married 81 67.91 0.706 SYS2 Married 81 67.86 0.724 FUL4 Married 81 67.31 0.896 PRI2 Married 81 69.62 0.264
Total 133 Total 133 Total 133 Total 133
Single 52 69.22 Single 52 67.63 Single 52 66.52 Single 52 62.68
EFF5 Married 81 65.57 0.568 SYS3 Married 81 66.59 0.864 FUL5 Married 81 67.31 0.899 PRI3 Married 81 69.77 0.216
Total 133 Total 133 Total 133 Total 133
Single 52 68.81 Single 52 65.71
EFF6 Married 81 65.84 0.627 SYS4 Married 81 67.83 0.747
Total 133 Total 133
 Zakat Management Information System: E-Service Quality and…. 59

Table 12. Mann-Whitney U Test (Marital Status-2)

Mean Mean
Criterion Marriage N Sig. Criterion Marriage N Sig.
Rank Rank
Single 52 65.37 Single 52 60.5
QUA1 Married 81 68.05 0.683 LOY1 Married 81 71.17 0.043**
Total 133 Total 133
Single 52 65.9 Single 52 61.13
VAL1 Married 81 67.7 0.785 LOY2 Married 81 70.77 0.096*
Total 133 Total 133
Single 52 69.22 Single 52 62.6
VAL2 Married 81 65.57 0.579 LOY3 Married 81 69.83 0.197
Total 133 Total 133
Single 52 66.59 Single 52 61.66
VAL3 Married 81 67.27 0.919 LOY4 Married 81 70.43 0.072*
Total 133 Total 133
Single 52 68.14 Single 52 66.71
VAL4 Married 81 66.27 0.773 LOY5 Married 81 67.19 0.915
Total 133 Total 133
Note:***, **, * denotes significant in 1%, 5%, 10% respectively

Krusskall-Wallis towards e-service quality perceived

performance and SIMBA’ overall
As a non-parametric test, Krusskall
quality, perceived value, and loyalty
Wallis test is applied to measure
intention by the respondents. Since these
statistical difference across age group,
control variables come more than two
education level, salary, usage intensity,
training participation, and location options instead of Mann-Whitney U test,
Krusskall Wallis test is used

Table 13. Krusskall-Wallis (Age Group-1)

Mean Asymp. Mean Asymp. Mean Asymp. Mean Asymp. Mean Asymp. Mean Asymp.
Item Age N Item Age N Item Age N Item Age N Item Age N Item Age N
Rank Sig. Rank Sig. Rank Sig. Rank Sig. Rank Sig. Rank Sig.
< 20 1 97.50 < 20 1 57.00 < 20 1 40.00 < 20 1 98.50 < 20 1 44.00 < 20 1 94.00
20-25 32 59.13 20-25 32 64.16 20-25 32 61.27 20-25 32 56.95 20-25 32 59.80 20-25 32 58.47
26-30 53 71.18 26-30 53 72.75 26-30 53 71.80 26-30 53 74.87 26-30 53 72.11 26-30 53 72.83
31-35 33 59.20 31-35 33 58.29 31-35 33 63.42 31-35 33 62.95 31-35 33 62.53 31-35 33 62.42
EFF1 0.159 EFF5 0.634 SYS1 0.690 FUL1 0.271 FUL5 0.554 PRI2 0.441
36-40 11 82.09 36-40 11 72.59 36-40 11 70.09 36-40 11 64.27 36-40 11 74.82 36-40 11 72.91
41-45 2 97.50 41-45 2 83.25 41-45 2 70.25 41-45 2 69.50 41-45 2 72.25 41-45 2 65.00
> 55 1 97.50 > 55 1 57.00 > 55 1 100.50 > 55 1 98.50 > 55 1 100.50 > 55 1 94.00
Total 133 Total 133 Total 133 Total 133 Total 133 Total 133
< 20 1 42.50 < 20 1 38.00 < 20 1 43.50 < 20 1 37.00 < 20 1 97.50 < 20 1 90.00
20-25 32 58.75 20-25 32 62.63 20-25 32 64.34 20-25 32 59.98 20-25 32 57.97 20-25 32 53.80
26-30 53 74.22 26-30 53 74.31 26-30 53 70.27 26-30 53 72.35 26-30 53 72.26 26-30 53 74.75
31-35 33 59.80 31-35 33 61.09 31-35 33 61.73 31-35 33 64.50 31-35 33 66.59 31-35 33 66.21
EFF2 0.189 EFF6 0.457 SYS2 0.738 FUL2 0.562 FUL6 0.530 PRI3 0.143
36-40 11 71.05 36-40 11 69.91 36-40 11 75.91 36-40 11 71.82 36-40 11 63.32 36-40 11 67.64
41-45 2 100.00 41-45 2 53.75 41-45 2 56.75 41-45 2 53.00 41-45 2 68.50 41-45 2 59.25
> 55 1 100.00 > 55 1 38.00 > 55 1 98.50 > 55 1 95.50 > 55 1 97.50 > 55 1 90.00
Total 133 Total 133 Total 133 Total 133 Total 133 Total 133
< 20 1 91.00 < 20 1 44.50 < 20 1 37.00 < 20 1 40.50 < 20 1 42.00
20-25 32 62.75 20-25 32 58.69 20-25 32 69.69 20-25 32 58.67 20-25 32 55.98
26-30 53 71.11 26-30 53 71.54 26-30 53 71.04 26-30 53 72.56 26-30 53 74.70
31-35 33 62.70 31-35 33 64.18 31-35 33 60.58 31-35 33 64.08 31-35 33 60.73
EFF3 0.648 EFF7 0.549 SYS3 0.642 FUL3 0.463 FUL7 0.141
36-40 11 63.73 36-40 11 75.59 36-40 11 61.64 36-40 11 74.77 36-40 11 79.23
41-45 2 91.00 41-45 2 73.00 41-45 2 52.50 41-45 2 55.50 41-45 2 71.25
> 55 1 91.00 > 55 1 101.50 > 55 1 97.00 > 55 1 99.50 > 55 1 100.50
Total 133 Total 133 Total 133 Total 133 Total 133
< 20 1 41.50 < 20 1 45.00 < 20 1 78.50 < 20 1 40.00 < 20 1 92.50
20-25 32 57.98 20-25 32 56.86 20-25 32 62.63 20-25 32 62.13 20-25 32 56.17
26-30 53 75.20 26-30 53 74.31 26-30 53 70.96 26-30 53 74.69 26-30 53 75.21
31-35 33 61.98 31-35 33 62.39 31-35 33 58.56 31-35 33 59.47 31-35 33 62.24
EFF4 0.277 EFF8 0.261 SYS4 0.553 FUL4 0.370 PRI1 0.170
36-40 11 70.32 36-40 11 75.82 36-40 11 81.86 36-40 11 68.73 36-40 11 71.41
41-45 2 55.00 41-45 2 56.75 41-45 2 78.00 41-45 2 54.25 41-45 2 51.50
> 55 1 99.50 > 55 1 101.50 > 55 1 78.50 > 55 1 97.50 > 55 1 92.50
Total 133 Total 133 Total 133 Total 133 Total 133

Age Group shows that there is one dimension that

significantly different from other age
Table 13 indicates that there is no
categories which is operator’ intention to
statistical difference across age category
say positive things about SIMBA to
in perceiving SIMBA e-service quality
others. This is represented by LOY1
performance. On the contrary, Table 14
 60 International Journal of Zakat Vol. 4(2) 2019

(0.062) that is significant at 10% categories. One might infer that SIMBA
confidence level. It implies that is perceived better by the older employee
respondents who are at the age of 36-40 that is usually has reached management
(mean: 84.5) and 41-45 (mean: 84.5) are level such manager or executive
equally more eager to say positive things members.
about SIMBA in comparison to other age

Table 14. Krusskall-Wallis (Age Group-2)

Mean Asymp. Mean Asymp. Mean Asymp. Mean Asymp.
Item Age N Item Age N Item Age N Item Age N
Rank Sig. Rank Sig. Rank Sig. Rank Sig.
< 20 1 80.00 < 20 1 80.00 < 20 1 31.00 < 20 1 81.00
20-25 32 63.88 20-25 32 65.95 20-25 32 64.31 20-25 32 58.48
26-30 53 71.02 26-30 53 69.98 26-30 53 67.71 26-30 53 72.14
31-35 33 63.85 31-35 33 64.11 31-35 33 69.26 31-35 33 64.76
QUA1 0.541 VAL3 0.987 LOY2 0.692 LOY4 0.394
36-40 11 58.64 36-40 11 66.09 36-40 11 66.91 36-40 11 68.64
41-45 2 112.00 41-45 2 59.25 41-45 2 90.50 41-45 2 81.00
> 55 1 47.00 > 55 1 50.50 > 55 1 31.00 > 55 1 81.00
Total 133 Total 133 Total 133 Total 133
< 20 1 47.50 < 20 1 63.50 < 20 1 29.00 < 20 1 15.00
20-25 32 68.42 20-25 32 64.42 20-25 32 64.09 20-25 32 67.84
26-30 53 68.82 26-30 53 73.13 26-30 53 70.36 26-30 53 70.49
31-35 33 63.21 31-35 33 63.68 31-35 33 63.82 31-35 33 63.64
VAL1 0.681 VAL4 0.758 LOY3 0.511 LOY5 0.267
36-40 11 61.27 36-40 11 60.82 36-40 11 71.91 36-40 11 59.55
41-45 2 109.50 41-45 2 53.50 41-45 2 88.00 41-45 2 78.00
> 55 1 47.50 > 55 1 32.50 > 55 1 29.00 > 55 1 78.00
Total 133 Total 133 Total 133 Total 133
< 20 1 37.50 < 20 1 21.50
20-25 32 71.36 20-25 32 59.28
26-30 53 68.20 26-30 53 69.92
31-35 33 58.35 31-35 33 65.67
VAL2 0.377 LOY1 0.062*
36-40 11 72.14 36-40 11 84.50
41-45 2 109.50 41-45 2 84.50
> 55 1 37.50 > 55 1 21.50
Total 133 Total 133
Note:***, **, * denotes significant in 1%, 5%, 10% respectively

Table 15. Krusskall-Wallis (Education Level-1)

Mean Asymp. Mean Asymp. Mean Asymp. Mean Asymp.
Item Education N Item Education N Item Education N Item Education N
Rank Sig. Rank Sig. Rank Sig. Rank Sig.
High School 24 79.81 High School 24 78.44 High School 24 72.85 High School 24 67.19
Diploma 10 65.45 Diploma 10 70.3 Diploma 10 65.85 Diploma 10 58.9
EFF1 Bachelor 93 63.72 0.246 EFF7 Bachelor 93 63.31 0.281 FUL1 Bachelor 93 65.13 0.745 FUL6 Bachelor 93 67.73 0.896
Postgraduate 6 69.17 Postgraduate 6 73 Postgraduate 6 74.42 Postgraduate 6 68.5
Total 133 Total 133 Total 133 Total 133
High School 24 75.67 High School 24 76.19 High School 24 71.58 High School 24 68.52
Diploma 10 67.3 Diploma 10 69.95 Diploma 10 57 Diploma 10 67.4
EFF2 Bachelor 93 63.84 0.366 EFF8 Bachelor 93 63.3 0.271 FUL2 Bachelor 93 66.31 0.626 FUL7 Bachelor 93 65.66 0.765
Postgraduate 6 80.83 Postgraduate 6 82.67 Postgraduate 6 76 Postgraduate 6 81
Total 133 Total 133 Total 133 Total 133
High School 24 73 High School 24 64.92 High School 24 68.83 High School 24 69.17
Diploma 10 61.4 Diploma 10 54.3 Diploma 10 54.6 Diploma 10 72.7
EFF3 Bachelor 93 65.15 0.476 SYS1 Bachelor 93 68.04 0.492 FUL3 Bachelor 93 66.4 0.270 PRI1 Bachelor 93 66.05 0.911
Postgraduate 6 81 Postgraduate 6 80.33 Postgraduate 6 89.67 Postgraduate 6 63.5
Total 133 Total 133 Total 133 Total 133
High School 24 72.58 High School 24 78.9 High School 24 78.31 High School 24 64.67
Diploma 10 73.2 Diploma 10 60.05 Diploma 10 65 Diploma 10 68.45
EFF4 Bachelor 93 64.04 0.483 SYS2 Bachelor 93 63.83 0.189 FUL4 Bachelor 93 64.18 0.357 PRI2 Bachelor 93 66.95 0.931
Postgraduate 6 80.17 Postgraduate 6 80.17 Postgraduate 6 68.75 Postgraduate 6 74.67
Total 133 Total 133 Total 133 Total 133
High School 24 78.44 High School 24 78.29 High School 24 69.44 High School 24 69.38
Diploma 10 58.1 Diploma 10 57.7 Diploma 10 62.55 Diploma 10 69
EFF5 Bachelor 93 64.94 0.340 SYS3 Bachelor 93 65.09 0.304 FUL5 Bachelor 93 66.24 0.860 PRI3 Bachelor 93 66.01 0.961
Postgraduate 6 68.08 Postgraduate 6 67 Postgraduate 6 76.5 Postgraduate 6 69.5
Total 133 Total 133 Total 133 Total 133
High School 24 74.63 High School 24 72.75
Diploma 10 52.85 Diploma 10 57.1
EFF6 Bachelor 93 65.28 0.164 SYS4 Bachelor 93 66.72 0.724
Postgraduate 6 86.75 Postgraduate 6 64.83
Total 133 Total 133
 Zakat Management Information System: E-Service Quality and…. 61

Education Level difference in the operator’s overall

Table 15 supports that different quality, perceived value, and loyalty
intention upon SIMBA. This might
education level does not significantly
imply that SIMBA has successfully
affect respondent in perceiving SIMBA
designed and developed to meet its goal
e-service quality performance. Similarly,
across in various operator’s educational
in Table 16, there is no significant
background.

Table 16. Krusskall-Wallis (Education Level-2)

Mean Asymp. Mean Asymp. Mean Asymp.
Item Education N Item Education N Item Education N
Rank Sig. Rank Sig. Rank Sig.
High School 24 68.17 High School 24 74.1 High School 24 69.75
Diploma 10 75.3 Diploma 10 71.4 Diploma 10 61.9
QUA1 Bachelor 93 65.7 0.884 VAL4 Bachelor 93 65.01 0.699 LOY3 Bachelor 93 66.75 0.928
Postgraduate 6 68.67 Postgraduate 6 62.17 Postgraduate 6 68.33
Total 133 Total 133 Total 133
High School 24 70.38 High School 24 64.71 High School 24 66.9
Diploma 10 70.25 Diploma 10 57.6 Diploma 10 66.9
VAL1 Bachelor 93 65.7 0.941 LOY1 Bachelor 93 67.47 0.352 LOY4 Bachelor 93 66.8 0.990
Postgraduate 6 68.17 Postgraduate 6 84.5 Postgraduate 6 70.75
Total 133 Total 133 Total 133
High School 24 71.35 High School 24 66.4 High School 24 66.67
Diploma 10 68.7 Diploma 10 63.95 Diploma 10 64.1
VAL2 Bachelor 93 65.69 0.926 LOY2 Bachelor 93 67.25 0.981 LOY5 Bachelor 93 68.04 0.736
Postgraduate 6 67 Postgraduate 6 70.67 Postgraduate 6 57
Total 133 Total 133 Total 133
High School 24 74.17
Diploma 10 75.95
VAL3 Bachelor 93 63.57 0.452
Postgraduate 6 76.58
Total 133

Table 17. Krusskall-Wallis (Income Level-1)

Income Mean Asymp. Income Mean Asymp. Income Mean Asymp. Income Mean Asymp. Income Mean Asymp.
Item N Item N Item N Item N Item N
(million IDR) Rank Sig. (million IDR) Rank Sig. (million IDR) Rank Sig. (million IDR) Rank Sig. (million IDR) Rank Sig.
<1 21 73.69 <1 21 76.86 <1 21 73.95 <1 21 79.26 <1 21 69.4
1.0 - 1.9 60 66.51 1.0 - 1.9 60 66.16 1.0 - 1.9 60 66.47 1.0 - 1.9 60 66.02 1.0 - 1.9 60 69.66
2.0 - 2.9 30 63.55 2.0 - 2.9 30 62.5 2.0 - 2.9 30 66.17 2.0 - 2.9 30 62.95 2.0 - 2.9 30 59.53
EFF1 3.0 - 3.9 19 64.76 0.856 EFF6 3.0 - 3.9 19 64.29 0.678 SYS3 3.0 - 3.9 19 65.42 0.406 FUL4 3.0 - 3.9 19 65.71 0.238 PRI2 3.0 - 3.9 19 66.53 0.762
4.0 - 4.9 2 69.25 4.0 - 4.9 2 67.25 4.0 - 4.9 2 22.5 4.0 - 4.9 2 25.5 4.0 - 4.9 2 65
> 5.0 1 97.5 > 5.0 1 96.5 > 5.0 1 97 > 5.0 1 97.5 > 5.0 1 94
Total 133 Total 133 Total 133 Total 133 Total 133
<1 21 71.38 <1 21 79.67 <1 21 79.38 <1 21 74.86 <1 21 73.12
1.0 - 1.9 60 67.83 1.0 - 1.9 60 64.42 1.0 - 1.9 60 64.79 1.0 - 1.9 60 67.24 1.0 - 1.9 60 68.64
2.0 - 2.9 30 60.18 2.0 - 2.9 30 66.77 2.0 - 2.9 30 62.82 2.0 - 2.9 30 63 2.0 - 2.9 30 63.07
EFF2 3.0 - 3.9 19 71.13 0.603 EFF7 3.0 - 3.9 19 63.79 0.253 SYS4 3.0 - 3.9 19 68.5 0.194 FUL5 3.0 - 3.9 19 66.16 0.446 PRI3 3.0 - 3.9 19 60.87 0.751
4.0 - 4.9 2 42.5 4.0 - 4.9 2 28.25 4.0 - 4.9 2 26 4.0 - 4.9 2 28.5 4.0 - 4.9 2 59.25
> 5.0 1 100 > 5.0 1 101.5 > 5.0 1 118.5 > 5.0 1 100.5 > 5.0 1 90
Total 133 Total 133 Total 133 Total 133 Total 133
<1 21 74.05 <1 21 77.5 <1 21 74.33 <1 21 74.76
1.0 - 1.9 60 63.2 1.0 - 1.9 60 65.68 1.0 - 1.9 60 65.61 1.0 - 1.9 60 70.24
2.0 - 2.9 30 70.8 2.0 - 2.9 30 59.9 2.0 - 2.9 30 65.7 2.0 - 2.9 30 60.72
EFF3 3.0 - 3.9 19 64.58 0.716 EFF8 3.0 - 3.9 19 68.29 0.519 FUL1 3.0 - 3.9 19 66.47 0.690 FUL6 3.0 - 3.9 19 59.39 0.353
4.0 - 4.9 2 61 4.0 - 4.9 2 73.25 4.0 - 4.9 2 40.5 4.0 - 4.9 2 39.5
> 5.0 1 91 > 5.0 1 101.5 > 5.0 1 98.5 > 5.0 1 97.5
Total 133 Total 133 Total 133 Total 133
<1 21 76.83 <1 21 74.1 <1 21 66.19 <1 21 70.29
1.0 - 1.9 60 66.08 1.0 - 1.9 60 66.94 1.0 - 1.9 60 67.34 1.0 - 1.9 60 69.29
2.0 - 2.9 30 60.43 2.0 - 2.9 30 61.78 2.0 - 2.9 30 66.62 2.0 - 2.9 30 60.9
EFF4 3.0 - 3.9 19 70.39 0.429 SYS1 3.0 - 3.9 19 68.66 0.584 FUL2 3.0 - 3.9 19 67.79 0.938 FUL7 3.0 - 3.9 19 66.63 0.653
4.0 - 4.9 2 41.5 4.0 - 4.9 2 40 4.0 - 4.9 2 49.25 4.0 - 4.9 2 42
> 5.0 1 99.5 > 5.0 1 100.5 > 5.0 1 95.5 > 5.0 1 100.5
Total 133 Total 133 Total 133 Total 133
<1 21 86.86 <1 21 70.98 <1 21 72.21 <1 21 73.71
1.0 - 1.9 60 62.88 1.0 - 1.9 60 63.81 1.0 - 1.9 60 65.34 1.0 - 1.9 60 68.69
2.0 - 2.9 30 63.32 2.0 - 2.9 30 68.68 2.0 - 2.9 30 63.7 2.0 - 2.9 30 60.35
EFF5 3.0 - 3.9 19 64.74 0.067* SYS2 3.0 - 3.9 19 72.34 0.491 FUL3 3.0 - 3.9 19 71.55 0.783 PRI1 3.0 - 3.9 19 63.76 0.702
4.0 - 4.9 2 37.75 4.0 - 4.9 2 29.25 4.0 - 4.9 2 52 4.0 - 4.9 2 63.5
> 5.0 1 109.5 > 5.0 1 98.5 > 5.0 1 99.5 > 5.0 1 92.5
Total 133 Total 133 Total 133 Total 133
Note:***, **, * denotes significant in 1%, 5%, 10% respectively
 62 International Journal of Zakat Vol. 4(2) 2019

Income Level to other income levels. On the other

Table 17 shows that item EFF5 (0.067) hand, Table 18 supports that there is not
any significant difference in various
is significant at 10%, which tells that
income level in perceiving SIMBA
respondents with income more than IDR
overall quality, perceived value, and
5 million per month (mean: 86.86)
loyalty intention.
acknowledge that SIMBA loads its pages
fast while they are using it in comparison

Table 18. Krusskall-Wallis (Income Level-2)

Income Mean Asymp. Income Mean Asymp. Income Mean Asymp. Income Mean Asymp. Income Mean
Item N Item N Item N Item N Item N
(million IDR) Rank Sig. (million IDR) Rank Sig. (million IDR) Rank Sig. (million IDR) Rank Sig. (million IDR) Rank
<1 21 81.52 <1 21 76.81 <1 21 80.5 <1 21 69.76 <1 21 69.88
1.0 - 1.9 60 65.63 1.0 - 1.9 60 64 1.0 - 1.9 60 65.27 1.0 - 1.9 60 68.42 1.0 - 1.9 60 68.05
2.0 - 2.9 30 64.7 2.0 - 2.9 30 66.97 2.0 - 2.9 30 64 2.0 - 2.9 30 62.57 2.0 - 2.9 30 62.87
QUA1 3.0 - 3.9 19 62.05 0.461 VAL2 3.0 - 3.9 19 62.76 0.623 VAL4 3.0 - 3.9 19 60 0.413 LOY2 3.0 - 3.9 19 70.16 0.343 LOY4 3.0 - 3.9 19 68.05
4.0 - 4.9 2 47 4.0 - 4.9 2 73.5 4.0 - 4.9 2 69.25 4.0 - 4.9 2 20.25 4.0 - 4.9 2 50.25
> 5.0 1 47 > 5.0 1 109.5 > 5.0 1 106 > 5.0 1 90.5 > 5.0 1 81
Total 133 Total 133 Total 133 Total 133 Total 133
<1 21 73.55 <1 21 74.38 <1 21 71.69 <1 21 67.76 <1 21 64.43
1.0 - 1.9 60 66.87 1.0 - 1.9 60 65.93 1.0 - 1.9 60 65.46 1.0 - 1.9 60 68.72 1.0 - 1.9 60 67
2.0 - 2.9 30 67.02 2.0 - 2.9 30 64.55 2.0 - 2.9 30 67.13 2.0 - 2.9 30 64.9 2.0 - 2.9 30 71.23
VAL1 3.0 - 3.9 19 63.24 0.891 VAL3 3.0 - 3.9 19 67.13 0.945 LOY1 3.0 - 3.9 19 63.71 0.853 LOY3 3.0 - 3.9 19 67.95 0.379 LOY5 3.0 - 3.9 19 64.74
4.0 - 4.9 2 47.5 4.0 - 4.9 2 65.25 4.0 - 4.9 2 84.5 4.0 - 4.9 2 19.5 4.0 - 4.9 2 46.5
> 5.0 1 47.5 > 5.0 1 50.5 > 5.0 1 84.5 > 5.0 1 88 > 5.0 1 78
Total 133 Total 133 Total 133 Total 133 Total 133

Table 19. Krusskall-Wallis (Usage Intensity-1)

Mean Asymp. Mean Asymp. Mean Asymp. Mean Asymp.
Item Usage N Item Usage N Item Usage N Item Usage N
Rank Sig. Rank Sig. Rank Sig. Rank Sig.
Daily 92 65.50 Daily 92 63.68 Daily 92 65.64 Daily 92 66.77
Weekly 15 61.03 Weekly 15 63.90 Weekly 15 65.13 Weekly 15 56.43
EFF1 Monthly 22 80.80 0.151
EFF7 Monthly 22 79.30 0.176 FUL1 Monthly 22 70.89 0.701 FUL6 Monthly 22 73.86 0.486
Yearly 4 48.00 Yearly 4 87.25 Yearly 4 84 Yearly 4 74.13
Total 133 Total 133 Total 133 Total 133
Daily 92 64.36 Daily 92 64.11 Daily 92 66.63 Daily 92 63.34
Weekly 15 64.63 Weekly 15 66.97 Weekly 15 65.93 Weekly 15 72.47
EFF2 Monthly 22 80.30 0.283 EFF8 Monthly 22 75.39 0.362 FUL2 Monthly 22 67.95 0.974 FUL7 Monthly 22 75.16 0.290
Yearly 4 63.50 Yearly 4 87.38 Yearly 4 74.25 Yearly 4 85.88
Total 133 Total 133 Total 133 Total 133
Daily 92 67.17 Daily 92 63.71 Daily 92 64.43 Daily 92 65.77
Weekly 15 59.67 Weekly 15 69.70 Weekly 15 67.63 Weekly 15 66.1
EFF3 Monthly 22 70.91 0.781 SYS1 Monthly 22 77.05 0.371 FUL3 Monthly 22 75.41 0.539 PRI1 Monthly 22 71.86 0.874
Yearly 4 69.00 Yearly 4 77.38 Yearly 4 77.5 Yearly 4 72
Total 133 Total 133 Total 133 Total 133
Daily 92 63.32 Daily 92 66.02 Daily 92 63.2 Daily 92 66.47
Weekly 15 72.17 Weekly 15 58.90 Weekly 15 72 Weekly 15 67.67
EFF4 Monthly 22 75.59 0.289 SYS2 Monthly 22 75.91 0.502 FUL4 Monthly 22 76.57 0.264 PRI2 Monthly 22 66.48 0.901
Yearly 4 85.00 Yearly 4 71.00 Yearly 4 83.13 Yearly 4 79.5
Total 133 Total 133 Total 133 Total 133
Daily 92 62.48 Daily 92 65.73 Daily 92 63.96 Daily 92 66.62
Weekly 15 64.70 Weekly 15 62.67 Weekly 15 71.43 Weekly 15 63.7
EFF5 Monthly 22 86.27 0.047** SYS3 Monthly 22 69.82 0.310 FUL5 Monthly 22 78.55 0.303 PRI3 Monthly 22 69.45 0.914
Yearly 4 73.63 Yearly 4 97.00 Yearly 4 56.75 Yearly 4 74.63
Total 133 Total 133 Total 133 Total 133
Daily 92 66.29 Daily 92 62.46
Weekly 15 61.20 Weekly 15 66.13
EFF6 Monthly 22 72.77 0.748 SYS4 Monthly 22 82.73 0.082 *
Yearly 4 73.25 Yearly 4 88.25
Total 133 Total 133
Note:***, **, * denotes significant in 1%, 5%, 10% respectively

Usage Intensity perceived that SIMBA loads its pages

fast while those who use it yearly do not
Table 19 shows that there are two items
find any error while utilising it for
that significant at 5% and 10% namely,
recording zakat transaction. In addition,
EFF5 (0,047) and SYS4 (0,082) with
item LOY5 (0,030) is significant at 5 %
mean 86.27 and 88.25 respectively.
as shown in Table 20. It indicates that
Respondents that use SIMBA monthly
 Zakat Management Information System: E-Service Quality and…. 63

operators that use SIMBA in a daily months that those who use it less
basis (mean: 70.21) are more likely to frequent.
use SIMBA again in the upcoming

Table 20. Krusskall-Wallis (Usage Intensity-2)

Mean Asymp. Mean Asymp. Mean Asymp. Mean Asymp. Mean Asymp.
Item Usage N Item Usage N Item Usage N Item Usage N Item Usage N
Rank Sig. Rank Sig. Rank Sig. Rank Sig. Rank Sig.
Daily 92 64.52 Daily 92 66.59 Daily 92 67.88 Daily 92 69.26 Daily 92 68.79
Weekly 15 63.47 Weekly 15 56.13 Weekly 15 59.83 Weekly 15 55.50 Weekly 15 58.43
QUA1 Monthly 22 76.45 0.398 VAL2 Monthly 22 73.16 0.440 VAL4 Monthly 22 69.14 0.855 LOY2 Monthly 22 63.84 0.424 LOY4 Monthly 22 66.43 0.562
Yearly 4 85.25 Yearly 4 83.38 Yearly 4 62.00 Yearly 4 75.63 Yearly 4 61.13
Total 133 Total 133 Total 133 Total 133 Total 133
Daily 92 65.45 Daily 92 68.33 Daily 92 68.66 Daily 92 68.45 Daily 92 70.21
Weekly 15 60.23 Weekly 15 54.27 Weekly 15 57.03 Weekly 15 56.27 Weekly 15 55.47
VAL1 Monthly 22 78.11 0.450 VAL3 Monthly 22 69.68 0.575 LOY1 Monthly 22 63.68 0.301 LOY3 Monthly 22 64.45 0.279 LOY5 Monthly 22 66.09 0.030**
Yearly 4 67.00 Yearly 4 69.50 Yearly 4 84.50 Yearly 4 88.00 Yearly 4 41.50
Total 133 Total 133 Total 133 Total 133 Total 133
Note:***, **, * denotes significant in 1%, 5%, 10% respectively

Table 21. Krusskall-Wallis (Training Participation-1)

Mean Asymp. Mean Asymp. Mean Asymp. Mean Asymp.
Item Training N Item Training N Item Training N Item Training N
Rank Sig. Rank Sig. Rank Sig. Rank Sig.
Never 13 71.38 Never 13 68.31 Never 13 67.35 Never 13 79.65
1 time 6 64.50 1 time 6 52.67 1 time 6 64.75 1 time 6 62.58
EFF1 2-4 times 43 58.90 0.298 EFF7 2-4 times 43 61.67 0.390 FUL1 2-4 times 43 62.78 0.781 FUL6 2-4 times 43 66.91 0.562
> 5 times 71 71.32 > 5 times 71 71.20 > 5 times 71 69.68 > 5 times 71 65.11
Total 133 Total 133 Total 133 Total 133
Never 13 68.69 Never 13 68.54 Never 13 77.50 Never 13 66.62
1 time 6 66.08 1 time 6 67.75 1 time 6 56.17 1 time 6 64.83
EFF2 2-4 times 43 60.41 0.497 EFF8 2-4 times 43 62.07 0.737 FUL2 2-4 times 43 62.27 0.411 FUL7 2-4 times 43 61.81 0.649
> 5 times 71 70.76 > 5 times 71 69.64 > 5 times 71 68.86 > 5 times 71 70.39
Total 133 Total 133 Total 133 Total 133
Never 13 77.15 Never 13 70.12 Never 13 76.81 Never 13 77.27
1 time 6 47.33 1 time 6 54.00 1 time 6 59.17 1 time 6 69.17
EFF3 2-4 times 43 57.19 0.024** SYS1 2-4 times 43 58.64 0.150 FUL3 2-4 times 43 59.29 0.241 PRI1 2-4 times 43 61.42 0.462
> 5 times 71 72.75 > 5 times 71 72.59 > 5 times 71 70.54 > 5 times 71 68.32
Total 133 Total 133 Total 133 Total 133
Never 13 72.73 Never 13 85.81 Never 13 68.73 Never 13 66.54
1 time 6 65.33 1 time 6 55.00 1 time 6 59.08 1 time 6 70.75
EFF4 2-4 times 43 61.90 0.667 SYS2 2-4 times 43 57.86 0.047** FUL4 2-4 times 43 61.15 0.480 PRI2 2-4 times 43 63.36 0.845
> 5 times 71 69.18 > 5 times 71 70.11 > 5 times 71 70.89 > 5 times 71 68.97
Total 133 Total 133 Total 133 Total 133
Never 13 70.19 Never 13 78.54 Never 13 74.00 Never 13 80.54
1 time 6 59.42 1 time 6 57.33 1 time 6 60.33 1 time 6 65.92
EFF5 2-4 times 43 57.44 0.152 SYS3 2-4 times 43 64.86 0.548 FUL5 2-4 times 43 60.13 0.383 PRI3 2-4 times 43 62.16 0.350
> 5 times 71 72.85 > 5 times 71 67.00 > 5 times 71 70.44 > 5 times 71 67.54
Total 133 Total 133 Total 133 Total 133
Never 13 76.42 Never 13 68.88
1 time 6 51.75 1 time 6 53.17
EFF6 2-4 times 43 58.48 0.104 SYS4 2-4 times 43 61.62 0.448
> 5 times 71 71.73 > 5 times 71 71.08
Total 133 Total 133
Note:***, **, * denotes significant in 1%, 5%, 10% respectively

Training Participation more than 5 times training experience

feel that the information provided in
Table 21 shows that there are two items
SIMBA and the overall convenience in
that are significant at 5 percent namely,
using SIMBA is excellent, which is a
EFF3 (mean: 77.15) and SYS2 (mean:
better result than what other group
71.08). Respondents that have never
perceived it. Meanwhile, respondents
been in SIMBA training state that
that have only been once in SIMBA
SIMBA helps them to complete zakat
training perceive much better value is
transaction quickly and they do not find
using SIMBA than any other group.
any error while using SIMBA than the
Lastly, item LOY3 is significant at 10%
other respondents who have been in the
and respondents that never been in
training.
training (mean: 81.38) tend to more
In addition, Table 22 displays
eager to tell their friends to use SIMBA
that item VAL1, VAL2, and VAL4 are
significant at 5%. Respondents with than other respondents that have been
participating in SIMBA training.
 64 International Journal of Zakat Vol. 4(2) 2019

Table 22. Krusskall-Wallis (Training Participation-2)

Mean Asymp. Mean Asymp. Mean Asymp. Mean Asymp. Mean Asymp.
Item Training N Item Training N Item Training N Item Training N Item Training N
Rank Sig. Rank Sig. Rank Sig. Rank Sig. Rank Sig.
Never 13 61.62 Never 13 58.31 Never 13 59.88 Never 13 79.08 Never 13 81.00
1 time 6 62.33 1 time 6 74.25 1 time 6 78.25 1 time 6 53.58 1 time 6 58.33
QUA1 2-4 times 43 60.40 0.356 VAL2 2-4 times 43 55.84 0.047** VAL4 2-4 times 43 55.36 0.040** LOY2 2-4 times 43 60.19 0.150 LOY4 2-4 times 43 61.79 0.126
> 5 times 71 72.38 > 5 times 71 74.74 > 5 times 71 74.40 > 5 times 71 70.05 > 5 times 71 68.32
Total 133 Total 133 Total 133 Total 133 Total 133
Never 13 57.96 Never 13 61.38 Never 13 74.81 Never 13 81.38 Never 13 78.00
1 time 6 73.92 1 time 6 69.67 1 time 6 60.67 1 time 6 42.33 1 time 6 78.00
VAL1 2-4 times 43 55.83 0.045** VAL3 2-4 times 43 58.02 0.189 LOY1 2-4 times 43 60.27 0.239 LOY3 2-4 times 43 62.33 0.053 * LOY5 2-4 times 43 60.65 0.086
> 5 times 71 74.84 > 5 times 71 73.24 > 5 times 71 70.18 > 5 times 71 69.28 > 5 times 71 67.90
Total 133 Total 133 Total 133 Total 133 Total 133
Note:***, **, * denotes significant in 1%, 5%, 10% respectively

Location are SYS4 (0.006); FUL4 (0.010); FUL5

(0.010); FUL7 (0.006); and PRI3
Under this group, Krusskall Wallis test
(0.009). Interestingly, across those
finds significant differences among the
items, respondents who live in Bali and
22 items of e-service quality. At 1%
Nusa Tenggara are the most satisfied
significance level, there are five
respondent with mean rank ranging from
significant items (p value < 0.01) which
90.00 to 98.50, as depicted in Table 23.

Table 23. Krusskall-Wallis (Location-1)

Mean Asymp. Mean Asymp. Mean Asymp. Mean Asymp.
Item Location N Item Location N Item Location N Item Location N
Rank Sig. Rank Sig. Rank Sig. Rank Sig.
Sumatra 47 63.19 Sumatra 47 68.06 Sumatra 47 68.95 Sumatra 47 66.18
Jawa 41 69.00 Jawa 41 59.79 Jawa 41 61.38 Jawa 41 66.11
Kalimantan 16 53.84 Kalimantan 16 54.56 Kalimantan 16 51.84 Kalimantan 16 53.16
EFF1 Sulawesi 19 76.05 0.106 EFF7 Sulawesi 19 78.24 0.014** FUL1 Sulawesi 19 78.11 0.107 FUL6 Sulawesi 19 72.66 0.240
Bali & Nusa Tenggara 8 90.44 Bali & Nusa Tenggara 8 101.50 Bali & Nusa Tenggara 8 87.69 Bali & Nusa Tenggara 8 90.25
Maluku & Papua 2 41.00 Maluku & Papua 2 44.50 Maluku & Papua 2 69.50 Maluku & Papua 2 68.50
Total 133 Total 133 Total 133 Total 133
Sumatra 47 69.13 Sumatra 47 70.14 Sumatra 47 74.46 Sumatra 47 69.74
Jawa 41 60.95 Jawa 41 60.61 Jawa 41 56.37 Jawa 41 62.20
Kalimantan 16 53.31 Kalimantan 16 51.75 Kalimantan 16 60.81 Kalimantan 16 42.34
0.006
EFF2 Sulawesi 19 78.03 0.050** EFF8 Sulawesi 19 73.66 0.067* FUL2 Sulawesi 19 70.66 0.090* FUL7 Sulawesi 19 79.87
***
Bali & Nusa Tenggara 8 92.81 Bali & Nusa Tenggara 8 94.44 Bali & Nusa Tenggara 8 84.88 Bali & Nusa Tenggara 8 93.19
Maluku & Papua 2 42.50 Maluku & Papua 2 73.25 Maluku & Papua 2 53.00 Maluku & Papua 2 71.25
Total 133 Total 133 Total 133 Total 133
Sumatra 47 68.57 Sumatra 47 68.85 Sumatra 47 70.50 Sumatra 47 68.79
Jawa 41 62.37 Jawa 41 60.37 Jawa 41 60.21 Jawa 41 64.70
Kalimantan 16 56.50 Kalimantan 16 58.06 Kalimantan 16 49.00 Kalimantan 16 46.72
EFF3 Sulawesi 19 76.79 0.231 SYS1 Sulawesi 19 73.00 0.168 FUL3 Sulawesi 19 77.26 0.032** PRI1 Sulawesi 19 71.21 0.030**
Bali & Nusa Tenggara 8 83.50 Bali & Nusa Tenggara 8 92.94 Bali & Nusa Tenggara 8 92.13 Bali & Nusa Tenggara 8 92.50
Maluku & Papua 2 50.00 Maluku & Papua 2 70.25 Maluku & Papua 2 70.00 Maluku & Papua 2 92.50
Total 133 Total 133 Total 133 Total 133
Sumatra 47 66.59 Sumatra 47 68.29 Sumatra 47 69.33 Sumatra 47 65.04
Jawa 41 60.06 Jawa 41 62.27 Jawa 41 61.01 Jawa 41 68.23
Kalimantan 16 60.56 Kalimantan 16 53.59 Kalimantan 16 49.63 Kalimantan 16 46.38
0.010
EFF4 Sulawesi 19 80.47 0.068* SYS2 Sulawesi 19 80.32 0.114 FUL4 Sulawesi 19 78.79 PRI2 Sulawesi 19 76.97 0.053**
***
Bali & Nusa Tenggara 8 92.25 Bali & Nusa Tenggara 8 84.75 Bali & Nusa Tenggara 8 97.50 Bali & Nusa Tenggara 8 83.00
Maluku & Papua 2 41.50 Maluku & Papua 2 43.50 Maluku & Papua 2 40.00 Maluku & Papua 2 94.00
Total 133 Total 133 Total 133 Total 133
Sumatra 47 69.45 Sumatra 47 72.83 Sumatra 47 69.44 Sumatra 47 70.77
Jawa 41 58.74 Jawa 41 53.20 Jawa 41 65.94 Jawa 41 61.43
Kalimantan 16 60.34 Kalimantan 16 68.69 Kalimantan 16 41.78 Kalimantan 16 45.59
0.010 0.009
EFF5 Sulawesi 19 77.11 0.020** SYS3 Sulawesi 19 74.63 0.016** FUL5 Sulawesi 19 75.79 PRI3 Sulawesi 19 75.63
*** ***
Bali & Nusa Tenggara 8 96.38 Bali & Nusa Tenggara 8 89.50 Bali & Nusa Tenggara 8 93.44 Bali & Nusa Tenggara 8 90.00
Maluku & Papua 2 18.50 Maluku & Papua 2 37.00 Maluku & Papua 2 44.00 Maluku & Papua 2 90.00
Total 133 Total 133 Total 133 Total 133
Sumatra 47 71.80 Sumatra 47 63.10
Jawa 41 62.11 Jawa 41 62.63
Kalimantan 16 48.88 Kalimantan 16 53.06
0.006
EFF6 Sulawesi 19 68.50 0.033** SYS4 Sulawesi 19 87.66
***
Bali & Nusa Tenggara 8 96.50 Bali & Nusa Tenggara 8 98.50
Maluku & Papua 2 67.25 Maluku & Papua 2 37.50
Total 133 Total 133
Note:***, **, * denotes significant in 1%, 5%, 10% respectively

At 5% significant level, there are FUL3 (0.032); PRI1 (0.03); and PRI2
eight significant items (p value < o.o5) (0.053). Bali and Nusa Tenggara are the
namely EFF2 (0.05); EFF5 (0.02); EFF6 locations where most respondents
(0.033); EFF7 (0.014); SYS3 (0.016); satisfied with the performance of those
 Zakat Management Information System: E-Service Quality and…. 65

items indicated by the highest mean rank EFF8 (0.067); and FUL2 (0.09). Again,
in each group with mean rank ranging Bali and Nusa Tenggara are regions
from 89.50 to 101.50. Nonetheless, where respondents satisfied the most on
Maluku & Papua rank the highest on those items with mean rank 92.95; 94.44;
item PRI2 with mean rank 94.00, while and 84.88 respectively. It can be inferred
both Maluku & Papua and Bali & Nusa that respondents who live in Bali and
Tenggara share the highest mean rank on Nusa Tenggara are those who are very
item PRI1. satisfied with SIMBA e-service quality,
At 10 % significant level, there then followed by those who live in
are three items that are significant (p Maluku and Papua at the second rank.
value < 0.10) which are EFF4 (0.068);

Table 24. Krusskall-Wallis (Location-2)

Mean Asymp. Mean Asymp. Mean Asymp. Mean Asymp. Mean Asymp.
Item Location N Item Location N Item Location N Item Location N Item Location N
Rank Sig. Rank Sig. Rank Sig. Rank Sig. Rank Sig.
Sumatra 47 65.89 Sumatra 47 66.04 Sumatra 47 66.86 Sumatra 47 68.70 Sumatra 47 71.01
Jawa 41 64.20 Jawa 41 60.05 Jawa 41 62.00 Jawa 41 54.71 Jawa 41 58.61
Kalimantan 16 44.44 Kalimantan 16 56.03 Kalimantan 16 61.91 Kalimantan 16 62.06 Kalimantan 16 55.19
0.073
QUA1 Sulawesi 19 77.89 0.007* VAL2 Sulawesi 19 82.37 VAL4 Sulawesi 19 74.11 0.316 LOY2 Sulawesi 19 81.11 0.010* LOY4 Sulawesi 19 77.76 0.020**
***
Bali & Nusa Tenggara 8 103.88 Bali & Nusa Tenggara 8 92.81 Bali & Nusa Tenggara 8 91.50 Bali & Nusa Tenggara 8 90.50 Bali & Nusa Tenggara 8 81.00
Maluku & Papua 2 80.00 Maluku & Papua 2 70.50 Maluku & Papua 2 48.00 Maluku & Papua 2 90.50 Maluku & Papua 2 81.00
Total 133 Total 133 Total 133 Total 133 Total 133
Sumatra 47 69.60 Sumatra 47 68.27 Sumatra 47 69.03 Sumatra 47 70.74 Sumatra 47 72.43
Jawa 41 61.15 Jawa 41 62.15 Jawa 41 60.62 Jawa 41 52.71 Jawa 41 60.02
Kalimantan 16 44.13 Kalimantan 16 51.22 Kalimantan 16 61.41 Kalimantan 16 65.63 Kalimantan 16 61.44
0.093
VAL1 Sulawesi 19 77.13 0.010* VAL3 Sulawesi 19 78.92 LOY1 Sulawesi 19 71.24 0.254 LOY3 Sulawesi 19 78.68 0.006* LOY5 Sulawesi 19 67.53 0.145
***
Bali & Nusa Tenggara 8 97.00 Bali & Nusa Tenggara 8 91.81 Bali & Nusa Tenggara 8 84.50 Bali & Nusa Tenggara 8 88.00 Bali & Nusa Tenggara 8 78.00
Maluku & Papua 2 92.75 Maluku & Papua 2 50.50 Maluku & Papua 2 84.50 Maluku & Papua 2 88.00 Maluku & Papua 2 78.00
Total 133 Total 133 Total 133 Total 133 Total 133
Note:***, **, * denotes significant in 1%, 5%, 10% respectively

Error! Reference source not Multiple Regression Analysis

found.Table 24 displays that there are In this part, this study measures if there
four items that are significant at 1% is a significant impact of the e-service
namely QUA1, VAL1, LOY2, and quality dimensions on SIMBA’ overall
LOY3. Respondents in Bali and Nusa quality, perceived value, and loyalty
Tenggara argue that SIMBA overall intention using multiple regression
quality (QUA1) and information technique. Accordingly, the results in
provided in SIMBA (VAL1) are this part respond to research questions
excellent with mean rank: 103.88 and H5a; H5b; and H5c. In doing so, this
97.00, respectively. Likewise, study defines the three regression model
respondents in Maluku & Papua and Bali
as follow:
& Nusa Tenggara share the highest mean
rank on item LOY2 (90.5) and LOY3 𝑄𝑈𝐴 = 𝛼 + 𝛽1 𝐸𝐹𝐹 + 𝛽2 𝑆𝑌𝑆 +
(88.0). 𝛽3 𝐹𝑈𝐿 + 𝛽3 𝑃𝑅𝐼 + 𝜀1
At 5% significance level, again, (0-1)
Maluku & Papua and Bali & Nusa 𝑉𝐴𝐿 = 𝛼 + 𝛽1 𝐸𝐹𝐹 + 𝛽2 𝑆𝑌𝑆 +
Tenggara share the highest rank with 𝛽3 𝐹𝑈𝐿 + 𝛽3 𝑃𝑅𝐼 + 𝜀2
mean rank 81.00 on the item of LOY4. (0-2)
Moreover, at 10% significant level item 𝐿𝑂𝑌 = 𝛼 + 𝛽1 𝐸𝐹𝐹 + 𝛽2 𝑆𝑌𝑆 +
VAL2 and VAL3 are also significant 𝛽3 𝐹𝑈𝐿 + 𝛽3 𝑃𝑅𝐼 + 𝜀3
together with Bali and Nusa Tenggara (0-3)
who have the highest mean rank 92.81
and 91.91 respectively. where: QUA: Overall Quality;
VAL: Perceived Value; LOY:
Loyalty Intention; EFF: Efficiency;
SYS: System Availability; FUL:
66 International Journal of Zakat Vol. 4(2) 2019

Fulfilment; PRI: Privacy; 𝛼:

constant; 𝛽: Slope; 𝜀: error term.

Table 25. Regression Model Summary

Adjusted R Std. Error of Durbin-

Model R R Square
Square the Estimate Watson
1 .676 0.456 0.440 1.13416 1.923
2 .682 0.466 0.449 1.00837 1.990
3 .629 0.396 0.377 0.44088 1.962

Having the regression model, the ideal 2.0 which highly represents that
result is gained by applying the mean there is no autocorrelation within the
value of e-service quality dimensions as model (Karadimitriou & Marshall,
the independent variables and the mean 2015).
value of three criterion as dependent Moreover, Table 26 shows the
variables in SPPS program. Table 25 ANOVA test results upon the three
displays the model summary of the regression model. It confirms that all of
regression. The adjusted R-square for the three models are significant which
model 1 to model 3 are 0.440; 0.449; and means that the e-service quality
0.377 which is quite satisfactory. The dimensions have a significant impact on
result of Durbin Watson test are 1.923; the overall quality, perceived value and
1.990; and 1962 respectively. They are in loyalty intention.
the range of 1.5 to 2.5 and close to the

Table 26. ANOVA Test Result

Sum of Mean
Model Items df F Sig.
Squares Square
Regression 138.285 4 34.571 26.876 .000***
1 Residual 164.648 128 1.286
Total 302.932 132
Regression 113.447 4 28.362 27.893 .000***
2 Residual 130.151 128 1.017
Total 243.598 132
Regression 16.28 4 4.07 20.938 .000***
3 Residual 24.88 128 0.194
Total 41.16 132
Note:***, **, * denotes significant in 1%, 5%, 10% respectively

Table 27 provides further Moreover, there are two dimensions on

analysis for these three models that have Model 2 that are significant namely
a direct impact on its respective ‘efficiency’ and ‘fulfilment’ with p value
dependent variables. It shows that in below 0.05. They have coefficient value
Model 1 there is only one dimension that 0.359 and 0.404 respectively.
is significant with p value 0.001 namely Nonetheless, there is no dimension that
‘efficiency’ with coefficient value 0.605. is significant in Model 3.
Zakat Management Information System: E-Service Quality and…. 67

Table 27. Regression Coefficient Results

Unstandardized Coefficients Standardized

Model Dimension Coefficients t Sig.
B Std. Error Beta
EFF 1.307 0.376 0.605 3.475 0.001***
SYS -0.421 0.306 -0.202 -1.378 0.171
1
FUL 0.529 0.385 0.257 1.372 0.172
PRI 0.007 0.172 0.003 0.038 0.970
EFF 0.695 0.334 0.359 2.078 0.040**
SYS -0.200 0.272 -0.107 -0.734 0.464
2
FUL 0.746 0.343 0.404 2.177 0.031**
PRI 0.076 0.153 0.043 0.497 0.620
EFF 0.204 0.146 0.256 1.396 0.165
SYS 0.128 0.119 0.167 1.077 0.284
3
FUL 0.234 0.150 0.309 1.565 0.120
PRI -0.092 0.067 -0.127 -1.374 0.172
Note:***, **, * denotes significant in 1%, 5%, 10% respectively

CONCLUSION Gross Domestic Regional Product

(GDRP) per capita and GINI coefficient
Reflections and Conclusion are not significantly impacting zakat
This study has evaluated the impact of collection.
SIMBA on the national zakat collection Moreover, this study has
and its electronic service quality succeeded in adapting and conducting e-
perceived by the SIMBA operators at a service quality survey to zakat
nation-wide level. Prior to that, the information system realm. All the tests
earlier chapters have established an prove that the instrument in this study
understanding of the development of has a high degree of reliability and
zakat management system in Indonesia validity.
and the importance management The empirical findings show that
information system in zakat operation. SIMBA operators are highly educated,
The regression results in its have significant training experience and
explorative attempt to illustrate the intensive interaction with SIMBA but
impact of SIMBA implementation on the are underpaid. It should bring an
national zakat collection shows that attention to BAZNAS in order to prevent
SIMBA is positive and significantly human resources drain out. In addition,
impact the national zakat collection. BAZNAS as the main stakeholder
Moreover, the HDI that represents the should pay significant attention to the
human resource quality of management SIMBA operator’s characteristic which
in local BAZNAS office is significantly dominantly millennial. They are tech
contribute to increase zakat collection savvy who are loyal to individual
but still have a low magnitude in which managers rather than to corporation and
BAZNAS central office needs to pay willing to deliver hard work along with
attention to increase it. On the contrary, virtually immediate reward. This group
the population is still a burden for zakat also consider the company’ commitment
collection as endemic poverty and the to people development and society
ignorance to pay zakat are identified as contribution which is should be retained
the reasons. It is also found that the real by BAZNAS as the organization value.
68 International Journal of Zakat Vol. 4(2) 2019

The gap analysis has revealed BAZNAS should consider the findings
that there are two items in SIMBA e- of this study to enhance the electronic
service quality performance that exceed service quality of SIMBA in order to
the operator expectation, namely SYS4 improve the effectiveness and efficiency
and FUL1. SYS4 represents that there is of zakat operation.
no error during service while FUL1
represents that SIMBA offers service LIMITATIONS AND FURTHER
after necessary data is submitted. This RESEARCH
study also has identified and elaborated
which e-service quality items that should There are limitations that should be
be retained, repositioned, improved and recognised in this study, as it can be a
ignored for SIMBA development. major input for further study.
The non-parametric tests, Mann- (i) Data availability constraints, as it
Whitney U test and Krusskall-Wallis makes only two year period in 85
test, are applied in this study to scrutiny cities are involved in this study;
the significant difference among (ii) The primary and secondary data
demographic variables collected in this research is limited
There is no significant difference to BAZNAS regional office and
between gender and among various not capturing any data from LAZ
education level in perceiving SIMBA’ at all. In fact, LAZ represents
performance, overall quality, perceived 27.93% of total national zakat and
value, and loyalty intention which infaq collection (BAZNAS, 2017)
indicates that SIMBA has successfully which is quite significant.
developed to meet its goal throughout Further study needs to be done to
different gender and education level. capture the impact of SIMBA in a much
BAZNAS should pay attention to several longer period with much more
operator’s characteristics that tend to be observations as SIMBA implementation
more loyal towards SIMBA in compare is getting wider each year.
to other characteristic groups. They are
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 International Journal of Zakat Vol. 4(2) 2019 page 73-86
Zakat Institutions and Universities Strategic Partnership for Poverty
Alleviation

Abu baker Ramadan Mohamed Hussain

Department of Finance and Economics
College of Business Administration, Taibah University

ABSTRACT
Despite the global efforts to eradicate poverty around the world, avoid exists in the
literature examining the role of an effective strategic partnership between universities
and Zakat institutions as a core social protection provider in the Muslim world. This
paper contributes to the literature in this area by assessing the prevailing patterns of
collaboration between Zakat organizations and universities. The main objective is two
folds; first, by appraising their potentialities, it establishes common interests that focus
on shared goals and objectives; ethics and values; and networks and processes. The
second is to propose strategic partnership framework. The proposed strategic
partnership framework will increase penetration and outreach by bridging the knowledge
gap, better targeted social protection components and improving communication and
networks. The adoption of the framework will change how these institutions approach
their goals and respond to community pressures providing variety of differentiated
products and services to reduce poverty.

Keywords: Zakat, Strategic Partnership Framework, Poverty Alleviation, Zakat

Institutions

INTRODUCTION private and civil society partnerships,

besides enhancing capacity building,
Poverty is a severe challenge to almost data and monitoring, governance,
all countries. International organizations finance and policy coherence (World
believe knowledge and knowledge Development Indicators 2016, and
sharing are core approach to alleviate COMCEC, 2016).
poverty; they emphasize that To achieve SDGs goals, the
partnerships are indispensable to declaration stresses on strengthening the
achieving the common strategic goal means of implementation and revitalize
(The World Bank, 2014; FAO, IFAD & the global partnership for sustainable
WFP, 2012). Partnering with the public development. This places Zakat
to address societal needs are growing in institutions and universities strategic
number and importance and especially partnership as core social institutions to
among organizations that think inspire sustainable development in the
institutionally (Kanter, 2013). Recent Organization of Islamic Countries
trends on knowledge economy stresses (OICs).
on knowledge as enabler to eradicate Zakat is the third pillar of Islam,
poverty that shifted the global strategic it means literally purification and growth
goals and momentums from Millennium (Gahf, 2010; IRIT, 2014). Legally, it
Development Goals (MDGs) towards means the transfer of ownership of
Sustainable Development Goals (SDGs) specific wealth to specific individuals
promoting effective public, public-
74 International Journal of Zakat Vol. 4(2) 2019

mentioned in the Holy Quran (Quran: is considered by leading international

9:60). It implies that poor people have organizations and developing countries
the right in the wealth of the rich as a means to eradicate poverty. It
(Hussain, 2015). Accordingly, Zakat implies different meanings for
institutions are legal entities designated universities across the globe (Banks,
to perform the religiously drawn 2016). It varies from relationship for
objectives covering collection, specific purpose, partnerships, and
distribution and management (Johari, strategic partnerships that are results-
2014). oriented, intensive, dynamic, long term,
Global Poverty Map shows that and ethically focused.
21 out of 48 Least Developed Countries Universities are often not viewed
are members of OICs, the organization by communities as valued partners in
shows 21 percent of the total population problem-solving (Sarena et al, 2003). In
living under USD 1.90 (COMCEC, a similar vein, UNICEF (2009) asserts
2016). IRTI (2014) emphasized that that universities have not yet reached
multidimensional poverty measures their full potential of partnerships and
within the OICs shows diverse records. collaborative relationships. It stresses
However, challenges to achieving SDGs the importance of strategic partnerships
varied from political will, institutional with civil society organizations,
capacity and lack of inclusive growth corporate sector and knowledge
processes. Accordingly, metric statistics institutions. The Association of Business
among OIC members entails the need for Schools (ABS) (2014) emphasized that
collaborative efforts to reduce poverty universities have to include more explicit
among organization’s members (Ahmed, links between theory and practice giving
2009; Abdebaki, 2016). more considerable attention to
Many scholars underlined the interdisciplinary programs. This requires
unrealized role of Zakat institutions to strong local organizational partnerships
effectively eradicate poverty (Hussain, to match market needs with local
2015, IRTI, 2014). Others, including capabilities.
SESRIC (2015); Ahmed (2015); The existing literature asserts that
Ammani (2014); and Sarea (2012) more purposeful engagement is needed
questioned the international to assist the diffusion of knowledge. For
organizations criteria that linked poverty instance, Porter (2007) emphasizes that
measurements to the rate of income, the potentiality of the strategic approach
visualizing Zakat as an important between universities and community
“Socio-Financial Index” to reduce the organizations can have a significant
gap between poor and rich within a impact on regional economic
country and between nations. In revitalization without new funding. That
comparison between Zakat collection the untapped capabilities of the
and distribution, Saad (2014) argues that universities envision sustained regional
there are several factors led to prosperity while contributing to the
inefficiency in Zakat distribution leadership and universities’ long-term
including procedures and processes of prospects. Likewise, Foster (2005)
Zakat funds distribution. highlighted the need for collective
A partnership is collaborative attention to converting collected
relationships between two entities to information into useful systematic
work towards shared objectives (CCF, intelligence indicators and to addressing
2010). A strategic partnership approach local community problems. Broström,
Zakat Institutions and Universities Strategic Partnership for Poverty… 75

Anders, (2010) appraises collaborative THE ESSENCE OF THE

R&D with universities against their RATIONALE
motive, desired social returns and
subsidies. They concluded that, despite To establish a foundation for
financial support by governments to partnership, it is imperative to raise the
boost R&D collaboration, forces inducing strategic partnerships’
conceptualization of motives for and common interests. The rationale stems
effects from such collaboration remains from three overarching sources namely:
poor. unsatisfactory existing patterns of
As developing countries move collaboration; potentiality of Zakat
towards a knowledge economy, the link institutions and universities:
between local institutions (including
Zakat) and universities is becoming the Unsatisfactory existing patterns of Zakat
primary vehicle to achieve the nation's – universities partnerships
developmental goals. One of the Existing literature showed that
stumbling blocks to integrating Zakat universities – Zakat strategic partnership
institutions and universities is to instil is yet to materialize and formalize to
knowledge and R&D mindsets into zakat eradicate poverty. Zakat institutions in
organization’s culture. This requires a the Muslim countries differ in a way they
shift from considering internal control collaborate and interact with
compliance to a more sustainable universities. These differences resulted
permeates the entire organization. in varied social protection outcomes.
By reviewing the relevant Many scholars like Ahmed (2015);
literature, this paper examines whether Dogarawa (2009), and IRTI (2014)
the rationale behind universities’ identified two important deficiencies in
engagement is driven by the same forces Zakat practices and processes namely;
as Zakat institutions; or whether it inefficiency in Zakat distribution and
represents a different type of entitlements procedures, while
engagement that need to be treated Zakatable funds (collection) that rely on
strategically different. Accordingly, the wealth and financial assets are not
purpose of this paper is two folds: first, strongly allocated against contemporary
is to identify common interests that economic activities. The former attracted
reflect the rationale behind the call for enormous attention among researchers
collaboration between Zakat institutions highlighting the negligence of
and universities. This lays the empowerment of the poor revealing that
foundations for strategic partnership most poor people do not possess
based on the unsatisfactory patterns of entrepreneurial and technical skills
existing forms of collaboration and the needed for wealth creation. However, the
potentialities of Zakat institutions and latter omits current economic activities
universities. The second aim is to and financial resources.
recommend a framework for a strategic Similarly, in a search for
partnership between Zakat and excellence, universities tend to form shy-
universities as a tool to eradicate away direct collaboration with Zakat
poverty. organization to tackle social protection
activities and management (Clarke &
Feeny, 2007; Banks, 2016). Much
research in this field has generated by
faculty members on their interests, while
76 International Journal of Zakat Vol. 4(2) 2019

others depend on government funding. entitlements, type of support,

As a result, weak resource management composition, duration and time.
by the poor prevails together with fewer Related activities by universities
programs targeted vulnerable people, cover collaborative research, research
and most importantly how Zakat chairs, training, consultancies, tailored
organizations increase their penetration courses and programs. Having the main
and outreach (Sarea, 2012). objectives of these institutions to
Typical conventional strategic participate in community development,
directions for universities include; much of their objective to reap financial
engaged research that aims to develop a rewards showed insufficient formal
high level of knowledge, skills and engagement with Zakat institutions.
culture to serve local communities. Jacob et al. (2015) urged Higher
Education is directed to improve Education Institutions (HEIs) to engage
students’ employability and to leverage within their local community where they
social responsibilities consolidating reside to have sustainable impact on
civic identity (Ausi 2013). society; likewise, communities must
Perkmann (2013) suggests improve network with HEIs to maintain
universities must improve their equal and positive partnership.
understanding of causal relationships Mirroring recent practices of
between community engagement and Zakat organizations, the state of
research performance for identifying knowledge remains relatively
contemporary activities; and designing fragmented and tentative. For instance,
appropriate policy interventions that Hussain (2015) highlighted the
improve human capital and social safety inadequateness of Zakat organizations’
net in dynamic nature of a knowledge internal processes in using knowledge
economy. management approaches, especially for
Spatial experiences produced activities that support poor people asset
different methods of collaboration management and the provision of local
exacerbating poverty ratios. In Asia, economic infrastructure. The literature
SESRIC, (2015) and IRTI (2014) suggests that some Zakat organizations
examined the interaction between across Muslim world, differ in absorbing
universities and Zakat organizations in knowledge produced by universities
Indonesia, India and Pakistan. The mainly in using information and
results showed five different types of knowledge that support certain sections
collaboration including student support, of poor and vulnerable people (Saad,
institutional (universities) support, 2014).
infrastructure, events and dakwah
activities. While in African countries The potentiality of Zakat institutions
such as Malawi, Uganda, Zambia and Many scholars recognized the
Mozambique, their current patterns of importance of reliable and dynamic local
Zakat support to higher institutions focus systems and institutions to achieve local
on graduate student’s support (Dahiru, economic development goals (Clarks,
2016). That includes financial support 2010; Bassi et al., 2014; Anand, 2011;
(bursaries), accommodation and rental World Bank, 2011). Zakat is the third
support and stationaries. Prioritizing pillar of Islam aims to bridge the gap
these activities require a closer between rich and poor (Quran, 9:60). Its
collaboration to identify students’
institutions play a significant role in
social protection and socioeconomic
Zakat Institutions and Universities Strategic Partnership for Poverty… 77

development (IDB, 2014; Hussain, social safety net acknowledges the

2014). Zakat acts as a core Islamic potentiality of Zakat to deliver best
socioeconomic policy responsible for results to combat poverty and increase
social protection and financial stability. social inclusion (Abdelbaki, 2016). As
As divine self-sustainable institutions, legal entities, Zakat institutions aim to
the prime functions of Zakat include strengthen social capital and blistering
collection, distribution and managing social assets; as they fully aware of
Zakat funds. social structures, that aids the design and
Recent global changes implement more effective local
emphasized that Zakat institutions must development agendas.
reorganize themselves to cope better Third, challenges of the
with contemporary challenges and knowledge economy pressurized local
pressures on poverty eradication and institutions to formulate effective
sustainable development. However, partnerships to achieve their strategic
Zakat institutions encompass the goals within the national development
following potentials: framework. Among other advocates, the
First, Zakat organization UN (2015) assumes effective
characterized as a financially self- partnerships enhance community
sustained organization (Saad, 2014). involvement, institutional capacities,
That Zakat collection contains all governance and strong accountability
economic activities if Zakat conditions that help nations to accelerate the
are met including enough Zakatable funs reduction of poverty. In this sense, Zakat
and the annuity of funds. Before institutions are core learning
disbursement, operational expenses and organizations that can create value for
all necessary expenditure for collection, the poor and the needy if they exploit
distribution and management will be their knowledge to the benefit of their
covered. However, this involves strategic objectives (Hussain, 2015).
research work and capacity building Zakat institutions are ethically
expenses to increase the efficiency and trustworthy organization characterized
effectiveness of Zakat. This character by transparency, professional
assures the sustainability of the proposed management and accountability to its
partnership framework. stakeholders, (Abdelbaki, 2016).
Second, global consensus to Forth, modern knowledge
eradicate poverty led by the United economy and knowledge management
Nation ‘Sustainable Development Goals overshadowed all voluntary, NGOs and
(SDGs) prompted developed and community organizations’ processes.
developing countries to accommodate Zakat economic activities and
these goals into their national strategies institutional governance entail the
and policies. This implies the integration essence of knowledge economy
of all local organizations to focus on components symbolizing religious
deeper, strong and effective strategic commitments and socio-economic
participation to strengthen and generate development objectives as strategic
knowledge that can be absorbed and goals. The holy Quran specifies and
exploited by local communities. Their priorities eight proceed to distribute
strategic focus concentrates on building Zakat funds that depend entirely on
and coordinating macro-level collection. The collected funds require
communities of practice to reduce comprehensive knowledge about
poverty (Hussain, 2015). Research on existing economic activities, businesses,
78 International Journal of Zakat Vol. 4(2) 2019

types of Zakatable funds, Zakat payees typical Zakat institution governance and
(individuals and organizations) processes are summarized in the
procedures and operational processes. A following figure.

Figure 1. Zakat Processes

Source: Prepared by Author.

Fifth, leading international how knowledge is exchanged to share

organizations including the World Bank and to promote exemplary practices and
(2011), UNDP (2011), FAO, IFAD & initiatives that have resulted from
WFP (2012) stress on knowledge as the engaged research, education and services
prime focus to eradicate poverty. Zakat (Théron, 2014). In recent years, their
institutions knowledge loop role in enhancing economic growth and
encompasses insight and foresight socio-economic development have
knowledge. These include data mining, mounted. Many scholars reveal that
information, systems, tools, technologies universities have given freedom to
required for ongoing management and prioritize their own goals building
practices. The generated knowledge is, effective engagement within the
however, requires organizational prevailing framework of shared value
alignment to national strategic and organization’s ethics (Banks, 2016;
approaches, changes in leadership and Broström, 2010, and Brennan, 2004).
decision-making processes. By targeting This new role assures the autonomy to
the eight proceeds prescribed in the Holy create, disseminate and share knowledge
Quran, (9:60), they have a critical to fulfil sustained development agenda.
inclusionary mechanism to reshape However, they differ in how
societal development goals. knowledge served societies to promote
development and economic growth.
Potentialities of Universities Accordingly, diverse patterns of
Universities are an important source of university-society interactions,
knowledge creation and knowledge commitment and motives have emerged
transfer (Yusuf, 2007; Clare, Chave, to formalized different types of
2014). Their strategic directions denote collaboration. Although, universities
Zakat Institutions and Universities Strategic Partnership for Poverty… 79

ability to create and share knowledge is d. In a similar vein, the demand for
the prime force for successful higher education continues to
partnership by conducting relevant grow in developing world,
research activities covering preventive, particularly in Muslim countries.
remedial and development objectives. Universities’ participation is still
Other drives to address societal problems below expectations and remains
include: significantly correlated with
a. New global trends encourage resource management, wealth
universities to materialize suitable creation and income distribution.
culture to accommodate the needs e. Rethinking the role of universities
of a knowledge economy by in growth and development
enhancing research, local necessitates the recognition of
networks, learning programs and local and regional growth and
objective-driven linkages. This community wellbeing; supporting
necessitated universities to have a socioeconomic mobility;
leading edge in research, Anticipation of future business
technology and knowledge needs and building talents and
creation to effectively engage in supports local organization’s
realizing the global SDGs together evidence-based policymaking.
with national, regional and local These potentialities will offer
poverty reduction objectives. insights into crucial Zakat institutions
b. The increased challenge to expand
processes such as recognition of
the university’s academic contemporary Zakatable financial
engagement beyond the traditional resources and activities scrutinizing
objectives of teaching and learning social protection priorities and
and research. These include approaches among others. Nevertheless,
developing and delivering it gives and universities the necessary
programs to stimulate the foundations for building solid societal
emerging local / community strategic partnership.
economic development activities
while sustaining scientific research Common interests
funds.
c. Recent recognition of the need for The successful strategic partnership
exploiting the capabilities of relies on flexibility by both institutions
higher education institutions to adapt their organizational goals and
(universities) in strategic objectives, shared ethics and values with
partnership plays a very significant processes and networks. This is thought
role to achieve a community’s to create common strategic objectives
development goals. In this sense, and interests.
universities must reposition Zakat institutions are
strategic partnership within their progressively adopting strategies to
missions to achieve the desired better access integrating sources of
goals. Such partnership should knowledge to identify Zakatable sources
play a lead role in promoting of funds and targeting specific section in
socio-economic development that the society known as Zakat proceeds.
is necessary for the knowledge This builds a consensus to increase their
economy. interest to collaborate with universities.
Similarly, a typical strategic mission of
80 International Journal of Zakat Vol. 4(2) 2019

universities has moved beyond improve societal socioeconomic

traditional teaching and research towards developmental objectives. This will lead
better-addressing community challenges to building a useful foundation to
and needs contributing directly to growth propose strategic partnership
and development. framework. Figure (2) summarizes
Accordingly, both institutions common grounds for a successful
motivated by such common interests to strategic partnership.

Figure 2. Common Interests

Source: Prepared by Author.

a. Shared goals b. Ethics and values

Local communities appreciate Zakat institutions and Universities
global SDGs goals announced by are regularly exploring open and
the UN, but they also treasure the honest practices accompanied by
relationship they have with their ethics, values and transparency
own local goals, including Zakat implanting the essences of fairness
objectives. To complement these and justice. Their abilities to
goals strong strategic partnership establish and promote core ethics
should take place to galvanize and and values in their operations and
formalize scattered and often processes are based on their
isolated attempts. Both Zakat original terms of references.
institutions and universities place Universities are core sources of
themselves as anchor knowledge and technology while,
organizations at local level Zakat institutions are religious-
targeting sustainable development based organizations seek to
and knowledge transfer that well enforce Shariah guidelines lodging
documented in their strategic goals Islamic ethics and moral values
and missions including supporting and rules in financial transactions
and achieving the nation's and financial management. The
development goals while realizing entrusted commitment implies
their own strategic objectives. them to become local leaders with
Zakat Institutions and Universities Strategic Partnership for Poverty… 81

the ability to perform their research objectives and processes

missions and plans across nations, become an important vehicle to
regions and at local level. achieve common goals.
c. Processes & Networks
Development goals have changed THE FRAMEWORK
across frontiers prompted Zakat
institutions and universities to The success of an effective strategic
rethink their objectives, priorities partnership between Zakat institutions
and processes. Manyika, et al. and universities inevitably rests on
(2013) indicated a shift in the realizing the common goals. This
demand for education, training and involves formalizing strategic
knowledge drives the customers partnership; resolving challenges and
(including poor people) to look for acquiring certain competencies. It
more services and innovative depends on mutual recognition of varied
products (goods and services). In Zakat issues and process together with
accordance, both institutions have universities’ community collaboration
to tie research to local goals. To stay focus on crystalizing
development needs, utilizing common interests and strategic goals;
knowledge economy processes to there is a need to accommodate
empowering poor and vulnerable partnership goals within their mission,
people. However, building virtual developing necessary approaches to
networks and consolidating achieve them.

Figure 3. Zakat Institutions – Universities Strategic Partnership Framework

Source: Prepared by Author.

82 International Journal of Zakat Vol. 4(2) 2019

Figure 3 summarizes Zakat- to integrate capabilities and incentives

universities strategic partnership. Based concurrently with the emerging changes
on the above rationale and common in the labour market and community’s
interests, it rests on two tiers to achieve goals and needs.
its goals, the required improvements and The proposed framework is
targeted approaches. Improvement thought to increase penetration and
processes include strengthening outreach, unlocking Zakat institutions
database and information; raising the and universities potentials leading to
awareness of Zakat issues encompassing better resource management, and ways
social protection and socioeconomic to improve societal wellbeing.
inclusion to enhance local development Penetration, in this sense, will foster new
objectives. Simultaneously, community practices that facilitate
improvements entail internal cultural values to support knowledge-
organization and institutional quality to based growth and sustainable
transform essential organizational development.
capabilities. Progress on social It promotes capacity building that
protection schemes and program need to signifies ethics and values approaches;
be carefully revised to accommodate the empowering local organizations, and
needed improvements. community members’ capabilities to
Targeted approaches follow two tackle poverty and other societal
different directions; first, the selected problems. The framework supports
research domains develop appropriate knowledge exchange activities,
gateways to assess community’s including collaborative research,
challenges and emerging economic consultancy, training, risk analysis and
activities that Zakatable funds depend resource management and procedures.
on, while redefining beneficiaries of
Zakat (proceeds identified in the holy
Quran). Since universities tend to WHAT STRATEGIC PARTNERSHIP
develop high levels of knowledge and FRAMEWORK CAN DO?
skills, research themes and processes
will produce useful insights to Controlling the joint strategic actions
understand community’s social enhances the shift towards a more
protection goals. In doing so the strategic approach to realizing
practices enrich not only community institutional objectives and a country's
participatory research but also valid strategic development goals. It assumes
interpretation to their socioeconomics to share risks and benefits in attaining
problems. social protection goals that promote
Second, approaching internal inclusionary measures accompanying
governance is the most crucial element ethics and values and capacity building.
in strategic partnership success. The In particular, penetration and outreach
framework will instil the essence of will enhance the following outcomes:
knowledge management in all Zakat
processes (see figure 1). Most Bridging knowledge gap
importantly, it develops result-based The proposed framework will bridge the
evaluation traditions forcing the knowledge gap which is necessary for
processes of knowledge management emerging activities and modern working
governance. This implies redesigning lives. The process enriches community
social protection schemes and programs development programs, maintaining local
accessibility and appropriate education to
Zakat Institutions and Universities Strategic Partnership for Poverty… 83

meeting labour market demand. Formal on labour market needs and required
agreements with universities to cooperate knowledge and how to share its
for long term with Zakat organizations outcomes across society.
strengthening decision making processes
and exchange more information and get
more knowledge that improves outcomes, CONCLUSION
processes and fulfilling national and
organization’s objectives. This study highlighted the importance of
Zakat institutions as an Islamic
Better targeted social protection organization to curtail poverty situations
components and to achieve social protection goals. It
The strategic partnership will presents the role of Universities as a
relentlessly advice on whether current powerhouse that generates knowledge as
Zakat funds can be better targeted “the enabler to attain sustainable
eight proceed” to provide effective development goals. The paper
support and fair access and identifies underlines three different forces that lay
Zakatable sources of funds in a the foundation of strategic partnership
sustainable manner that consolidating between Zakat institutions and
social capital and social assets. universities; including the unsatisfactory
existing patterns of collaboration; the
Improving communication & Networks potentiality of Zakat institutions to
reduce the gap between rich and the
The proposed strategic partnership
poor; and the aptitude of universities to
framework builds a robust continual
strengthening the current knowledge
database that improves the depth and
reservoir to eradicate poverty.
relevance of decision making. Its
It identifies common interests
networks frontiers including vertical and
ranged from shared development goals;
horizontal relationships deepen
ethics and values; knowledge processes
penetration and outreach stimulating
and networks. Accordingly, the paper
robust and inclusive local economic
proposes a strategic partnership
development. This makes antipoverty
framework that will reinforce
policies more effective. The framework
penetration and outreach including; first:
considers feedbacks from previous
it formalizes strategic partnerships that
programs as a key ingredient in
institutionalize social problems within
designing new programs.
universities’ development objectives.
Such collaboration provides a better
Tailored Community Programs
understanding of poverty and the poor
Within the domain of Zakat institutions while it generates a variety of
and universities, there are varying differentiated products and services to
programs addressing different themes reduce poverty.
while targeting various sections in the Second, methodologically, it
society. The framework will strengthen alters how institutions approach their
existing programs while identifying new societal goals and respond to community
ones to tackle specific social problem pressures fulfilling the shared
and emerging challenges. This requires socioeconomic values. That the
scrutinizing closely Zakat programs dynamism of poverty requires a
relying on the nature of its classified and continuous search for assessment and
identified activities and beneficiaries. As appropriate means to address its
for universities, tailored programs focus components. Third, practical
84 International Journal of Zakat Vol. 4(2) 2019

implications include; the provision of Nova Science, Publisher, Inc. New

tailored programs focusing on York.
vulnerable, poor people and certain Brennan, J., King, R., Lebeau, Y. (2004)
societal segments. In this sense, the The Role of Universities in
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integrated practices to help Zakat International Research Project.
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their objectives more effectively and Research & Information; ACU.
efficiently in releasing their social Broström, Anders, (2010) Firms’
protection programs. Rationales for Interaction with
Research Universities and the
Principles for Public Co-Funding.
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 International Journal of Zakat Vol. 4(2) 2019 page 87-100
The Potential of Application of Technology-Based Innovations for Zakat
Administration in India

Aishath Muneeza and Shahbaz Nadwi

International Center for Education in Islamic Finance (INCEIF)

ABSTRACT

India is the home country for many Muslims and effective management of zakah is
essential to the country. In this era of technology, it is imperative to use technology with
zakat to ensure that the classical zakat administration approaches are upgraded to the
uruf or customary practices of the society. The objective of this paper is to find out the
potential of using technology in upgrading zakat administration in India. This is a
qualitative approach where the primary sources such as zakat administration laws in
India and secondary sources such as journal articles and published reports on the
subject are analysed to derive conclusions. The findings of this paper suggest that the
innovations such as rice ATMs, mobile applications, applications made with blockchain
technology, artificial intelligence and big data can also play a vital role in the effective
management of zakat in India. It is anticipated that the outcome of this research will
assist the zakat administrators in India to adopt technology in this regard.

Keywords: Artificial intelligence, big Data, fintech, rice ATM, zakat

INTRODUCTION different verses Allah (SW) has

mentioned zakat. In al-Quran Zakat has
In Islam, Zakat is third pillar of the been described as a way in which the
religion Islam. Every Muslim who is redistribution of wealth is practised in
capable of paying zakat shall do so an economy considering the rights of
without an excuse. In Islam, there are the poor that must be fulfilled by those
two types of zakat; which is zakat al-fitr who are financially capable in the
and zakat al-maal. Irrespective of the society.
country in which a person resides and After Indonesia, India is the
the legal system adopted by the country, largest country in terms of Muslim
every Muslim is obliged to pay Zakat as population. It is estimated that there are
long as the person fulfils the religious 17.18 crore Muslims in India
requirements to give it. In simple term, accounting for 14.2 per cent of India’s
zakat can be defined as almsgiving. population and there is no exact
Zakat literally means to purify or estimate on how much Zakat is
increase or grow. This literal meaning of collected in India, with estimates
zakat indicates that via zakat a person’s fluctuating between Rs 7,500 crore and
wealth can be purified and this lead Rs 40,000 crore annually (Shaikh,
one’s wealth to grow and be increased 2019). As such, administration of zakat
not only physically, but spiritually as in India is important and there is a need
paying zakat leads to increase of to effectively manage zakat. The
barakah (blessing) of Allah (SW) in objective of this paper is to suggest the
one’s wealth. In the Holy book of ways in which technology could
Muslim, Al Quran, more than 30 enhance the administration of zakat in
88 International Journal of Zakat Vol. 4(2) 2019

India. This paper is divided into four than Rs 10,000 as Zakat. Thirty-nine per
parts. Followed by this introduction, cent paid Rs 10,000-50,000 (USD?),
part two discusses the existing zakat five per cent paid Rs 50,000-Rs 1
administration practices in Indian while (USD?) lakh, and 10 per cent over Rs 1
part three explains the technological lakh and most donations are given by
innovations made in different parts of individuals to their own relatives, with
the world to administer zakat which 38 per cent saying they preferred paying
India could adopt. The final part of the charity to their less well-off relatives
paper deals with conclusion. (Shaikh, 2017). Only 16 per cent of
respondents paid money to NGOs or
community organisations and funding
LITERATURE REVIEW an individual’s education was the most
preferred form of paying Zakat (Shaikh,
Administration of Zakah in India 2017). However, with only 18 per cent
In India, there is no central system for paying Zakat for education, the number
zakat administration as zakat is a was relatively less (Shaikh, 2017). Over
personal matter. As such, in different 50 per cent tended to pay Zakat to the
states, there are various private zakat same people, and over 55 per cent
managers like NGOs who deal with claimed that the money they gave as
zakat or zakat payment and distribution charity to someone did not change the
becomes a personal matter handled by life of the family nor were the donors
the individuals. interested in finding out whether the
In May 2019, it was reported money was being used effectively
that there was a survey conducted (Shaikh, 2017). Nearly 47 per cent of
across India by the Association of the respondents preferred the money
Muslim Professionals (AMP), who sent being given for the educational
questionnaires to 4,589 respondents empowerment of the community
from across various social strata to (Shaikh, 2017).
understand the current practices of AMP is one of the zakat
Zakat collection, distribution and its collectors in the country which has
impact on Muslim community (Shaikh, more than 75 chapters across the
2019). This survey revealed that 77 per country which is a registered society
cent of respondents believe that zakat under Societies Registration Act 1860,
has the potential to transform the Maharashtra, Mumbai of which the
Muslim community in India and the registration number is. 2011 G. B. B. S.
main concern they raised was thought D 3001 (AMP, N/A). AMP has their
zakat money is being given for various own zakat fund and they publish the
purposes, there is no specific focus and performance of their zakat fund in their
the payers of zakat they have concerns official website. The official website
on not knowing the impact created in indicates that AMP zakat fund was
the sense that they do not know whether created in 2013 to empower the lives of
the money they give is having any their people by promoting education &
tangible impact on the lives of those self-employment. The information of
who received it (Shaikh, 2017). The AMP zakat fund between 2013- 2018 is
findings of this survey also revealed that illustrated in table 1.
36 per cent of the respondents paid less
The Potential of Application of Technology-Based Innovations for Zakat… 89

Table 1. Performance of AMP Zakat Fund between 2013-2018

Source: Official Website of AMP

Table 1 indicates that year by in 2019 will be utilised for the purposed
year, the zakat collection of AMP has illustrated in Table 2.
been growing and every year AMP AMP also disclosed in their
ensures that the zakat collected money official website the bank account to
is disbursed. This proves that AMP has which the zakat money could be
been conducting initiatives to make deposited and they have disclosed that
public aware about the existence of their no administration fee or a cost will be
zakat fund and the transparent charged for this. Using this information
disclosure made by them may have about AMP zakat fund, it is understood
increased the confidence of public in that in India there is a decentralisation
entrusting zakat money to them. AMP zakat administration model where
has also disclosed their zakat plan for private parties who wish to do so have
2019 in their official website where they the autonomy to deal with it. Other than
have stated that the zakat fund collected AMP, there are many other
organisations that do zakat
90 International Journal of Zakat Vol. 4(2) 2019

administration in similar manner which Source: Official Website of AMP

are located in different parts of the India
such as Zakat Foundation of India
which was established in 1997 which is RESULTS & DISCUSSION
a non-governmental/non-profit
organization which collects and utilizes Use of Technology in Zakat in India
‘zakat’ or charity for socially beneficial In the case of AMP Zakat fund, it is
projects in a transparent and organized found that there is no use of technology
manner (Zakat Foundation of India, at all in collection or disbursement of
N/A). Since there are various zakat fund. The procedure used is
organisations managing zakat in India, purely based on a bank transfer made to
for the purpose of this paper, AMP will the account or via a cheque sent to the
be used for a case study. address provided in the website. This
proves that there is scope for application
Table 2. AMP Zakat Disbursement Plan of technology by organisations like
2019 AMP in India who deals with Zakat.
This part of the paper will provide the
Support A Wherein yearly support of
Higher Rs.10,000/- (Rupees Ten type of technology that has been
Education – Thousand) is given to students adopted in different parts of the world
Empower Lives pursuing Higher Education in which India could adopt in this regard.
the fields of Engineering,
Medicine, Architecture, etc. 1. Rice ATMs
By this endeavour AMP Rice Automated Teller Machines
hopes that the worries of the (ATMs) provide rice for needy
student getting assistance without the involvement of a
would be reduced to some
extent and they can focus
human similar to how cash is
better on their education and dispensed via Bank ATMs. A
try to build a good base for portion of Zakat money needs to
themselves. be allocated for the poor and there
Support A Small Wherein support of is need to ensure that a proper
Business – Make Rs.25000/- (Rupees Twent mechanism in a less costly
A Happy Family Five Thousand) is given to manner could be made make this
any needy Muslim person/
family to start a source of
possible. In Malaysia, these Rice
income. Through this ATMs have been installed in
endeavor AMP firmly hopes mosques (Nordin, 2019) and this
that the Zakat Taker of today is indeed something which India
becomes the Zakat Giver of shall consider as well.
tomorrow.
In February 2019, it was
Support an AMP has decided to support announced that The Federal
Orphan - Shape the educational expenses of a
A Life needy orphan child so that the
Territories Islamic Religious
child is not deprived of even Department (Jawi) hopes to install
the basic education for want ‘rice ATM machines’ at 85
of a guardian. Through this mosques in the Federal Territory
endeavour AMP intends that to facilitate its 23,000 asnaf or
the orphans in the community
should not feel left behind or
tithe recipients (Bernama, 2019).
isolated and the community is It is reported by Bernama (2019)
right behind them to support that the cost of this machine is
them. RM19,000 (USD?) and is the first
in the country and it has two
The Potential of Application of Technology-Based Innovations for Zakat… 91

functions, namely to give out rice (Jabodetabek), such as BAZNAS

supply in desired quantity and has Office (Kebon Sirih Street No. 57
a donation box to receive funds Jakarta) and nine mosques which
from the public. On February are cooperated with BAZNAS.
15th, first rice ATM machine was Each unit of ATM can store up to
installed at Al-Akram Mosque in 230 litres rice capacity, which can
Kampung Datuk Keramat. fulfil the needs of 120 households.
The main purpose of the Then, each unit can be refilled
Rice ATMs is to provide eight times per month. It was also
assistance to recipients (asnaf / stated that the Rice ATM program
beneficiaries of zakat) who are is also in line with the BAZNAS
registered as poor for zakat support to continuing SDGs in
purpose to collect rice using a order to eliminate the food
special card provided to them for shortages for poor people.
this purpose. The modus operandi It is essential to understand
of these rice ATM’s is that the the way the Rice ATMs work. In
user of the ATM machine must Sindonews, it was stated that the
tap the special card they have for BAZNAS rice, measuring 60 cm
the purpose on the sensor of the x 60 cm x 160 cm, shaped like a
machine and then the machine closet box and is very similar to a
will dispense 2kgs of through the regular ATM machine and the rice
designated collection point in the ATM is equipped with electronic
machine which is located in the devices that hybrid network
base of the machine. In this modem GSM/satellite as well as
special rice ATM machine, those control and monitoring system-
who wish to donate money for the based machine to machine (M2M)
purpose can also do so by or Internet of Things (IoT). The
depositing cash through a slot in machine can remove the rice in a
the machine. certain amount automatically and
Though this is the first the way it works is that the rice
time Rice ATMs are used in out by attaching the card Radio
Malaysia, rice ATMs were Frequency Identification (RFID)
innovated for zakat purpose by at the sensor card reader on the
The National Board of Zakat, device. It was reported that each
Republic of Indonesia rice ATM unit has a storage
(BAZNAS), and the machine was capacity of 1,000 kg of rice to
created by one of alumni of meet the needs for 1,000
Bandung Technology Institute recipients and each unit will be
(Institut Teknologi Bandung or recharged as many as eight times
ITB). It was reported in the in one month. The cost of
official website of BAZNAS on manufacture and maintenance in a
17th January 2017 that the year to Rp30 million per unit and
machine in Arthaloka building (in one-time transaction can draw rice
Jakarta) is a prototype of ATM from 1 kg and 2 kgs. Rice ATM
machines which soon to be cards are issued by the mosques.
assembled in ten several location The questions that might
points in Jakarta, Bogor, Depok be asked are: why a rice ATM and
Tanggerang and Bekasi why not just money? Or why is it
92 International Journal of Zakat Vol. 4(2) 2019

placed in a mosque; rather than a lifestyle. In some countries such

shop or a bank or elsewhere? On as Malaysia mobile apps have
28th February 2019, it was been introduced for ease zakat
reported that a mosque in North administration. In June 2018, it
Jakarta provides rice machine for was reported in the official
the poor and this program to website of Lembaga Zakat
provide rice ATMs began on 13th Selangor (LZS) that they had
January 2019 where at least 33 introduced mobile apps to
urban poor had received four free Penolong Amil Fitrah (PAF) to
litres of rice twice a week from make zakat fitrah collection in
the machine (The Jakarta Post, Selangor (Lembaga Zakat
2019). It was reported that Barnas Selangor, 2018). It was stated that
Sumantri, the head of the Jami this project involved 200 selected
Raudlatul Jannah Mosque’s PAF in Selangor and through
Welfare Council, said the rice these mobile apps, PAF no longer
ATM, which provides charity to uses a coupon of nature as
the less fortunate living around evidence of zakat payments,
the mosque, operates every instead using mobile apps to issue
Wednesday and Sunday. Barnas zakat payments in the field. To
has explained the reason behind make this possible, each involved
giving rice and the benefit of it as PAF is given an RM50 (USD?)
follows: “by giving rice [as smart card, printer and internet
charity], we can feed a whole access facility. Zakat producers
family. If we give money, Rp only need to provide identification
100,000 [US$7] for example, it cards for information scans for
might only be enough for one or storage purposes at LZS and the
two persons”. It was also reported PAF will print the receipt once
that the reason why Wednesday payment of zakat fitrah is made.
and Sunday are chosen is that This application is supported by a
these are the days the mosque link to the LZS system and it has
conducts religious studies. As number of security features
such, there are multiple benefits embedded. Every personal
of choosing these days and Barnas information of the zakat payers is
has described these benefits as: recorded more efficiently and
“they can get multiple benefits. easily into the LZS system and
The pahala (reward), the also the payment bills via
knowledge and the rice. The immediate withdrawal receipts
mosque had given special ATM also increase the trust level of
cards to each of the beneficiaries, zakat producers with LZS. The
and in order to get the rice, the advantage of using such an app
cardholders only have to tap their include reducing the risk of losing
cards on the machine, and the rice the physical coupons as physical
flows into a container. coupons that need to be taken
anywhere.
2. Mobile Apps
Today the use of smart mobile 3. Zakat Payment via Payment
phones are widespread. Therefore, Gateway from Website
the use of a mobile app for Time is money and a convenient
convenience has become a mechanism is required to pay
The Potential of Application of Technology-Based Innovations for Zakat… 93

zakat money. Having a website to payments will be made in real-

provide only information is not time online which is the process
enough today and it is imperative of debiting from the payer's bank
to have features like making to the payer’s account is being
payments via website. It is carried out at that time and the
suggested that India could adopt process of issuing a zakat
this convenient way of payment of payment receipt will be done
zakat. A perfect example of this within 14 working days.
could be the case of Malaysia 4. Zakat Via Fintech
where Lembaga Zakat Selangor Today, it is an essential to own a
has introduced e-zakat pay which mobile phone and as such,
is an online zakat payment everyone owns a mobile sim. An
method at arrangement could be made with
www.zakatselangor.com.my the telecommunication provider
(Lembaga Zakat Selangor, N/A).
by the zakat administration
It is stated that e-zakat pay organization in India to ensure
is an online financial transaction that there is a convenient
platform that links between banks mechanism to pay zakat. A good
to make zakat payment to the
example to illustrate how this
Lembaga Zakat Selangor. There work could be taken from
are number of banks which are Malaysia, where in 2014, it was
associated with Lembaga Zakat
reported that Celcom Axiata
Selangor to carry out this financial Berhad, the first and foremost
transaction. It is stated that for mobile telecommunications
zakat payment, the payer only provider in the country, facilitated
need to visit the e-zakat portal at the Muslim customers to pay for
www.zakatselangor.com.my and their zakat fitrah, anytime and
click on the E-Zakat Pay payment anywhere through the telco’s M-
to pay zakat. However, it is a Fitrah service (CELCOM, 2014).
condition precedent for the payer It was stated that the M-Fitrah
to have an account at the service was available in three (3)
participating bank before payment options; SMS, USSD,
proceeding with the payment. WEB and WAP. In this case, the
Subsequently, the payer shall telecommunication company was
follow the steps given, and an unauthorized collection agent
payment of zakat will be for zakat fitrah, offering the M-
completed online. There is no Fitrah service to its Muslim
registration and payment needed customers in Selangor, Melaka,
for using e-Zakat Pay and no Kedah, Perlis, Terengganu,
additional charges are taken for Pahang, Sabah and Kelantan. In
this service. It is imperative that in M-Fitrah service, customers are
e-Zakat Pay, there is no need for required to enter
the payer to download any “FITRAH<space><STATE>” and
application. Everything is taken send it to 21999 or dial *888*33#
place from the designated website for the payment of zakat fitrah via
and the entire transaction is secure SMS. Next, they will receive a
as it is encrypted with 128 Bit
reply from 21999 and are required
SSL. Also. In e-Zakat Pay, all to send their “<NAME>, <IC
94 International Journal of Zakat Vol. 4(2) 2019

Number>, <number of in India could easily form a

dependents>” to the same number. partnership with a
Then a verification message will telecommunication provider and
ensue and if the reply is YES, a could offer same services to the
thank you message and receipt zakat payers.
number for each payment made to
5. Blockchain Applications
self and dependents will be sent Research is ongoing to integrate
back to the customers. For zakat blockchain technology to zakat. It
fitrah payment via WEB Page, is reported that Dr Ziyaad
customers can visit Mahomed, Associate Dean of
www.thecube.my/mfitrah. executive education and e-
Customers will be requested to fill learning at the International
in their details and upon Centre for Education in Islamic
completing the online form, they Finance (INCEIF), and his team
will receive an SMS from 21999
have come up with an Islamic
with a pin code; which has to be social financing app that leverages
keyed into the page in order to blockchain technology. The
complete the submission. For modus operandi of this app has
zakat fitrah payment via WAP
been summarized by Dr Ziyaad as
Page, customers may visit follows according to the edge
m.thecube.my/mfitrah and enter markets (2018): “How the app
their mobile number before
works is very simple. When users
clicking the submit button. An turn it on, they are presented with
SMS will be sent from 12028 two options: sadaqat (charity) or
providing them with an URL link. zakat. If they choose zakat, the
Upon selecting the link they will app prompts them to select the
be automatically redirected to the school of thought they follow —
M-Fitrah page or they may select Shafie, Maliki, Hambali or Hanafi
M-Fitrah link from the display — as there are differences of
page. Customers are required to opinion. Then, the app asks a few
insert their information and will questions such as where they
be redirected to the Lifecube would like to see their money go.
page. Through either one of the We provide them with a choice of
Web Page or Wap Page, projects such as water irrigation,
customers will then receive an sanitation, poverty eradication and
SMS to confirm their submitted education. After choosing the
information and will be required project, they complete their
to respond via SMS accordingly. payment using a secure gateway.
For those who need to modify Specific projects are listed. And
their details, they will be required once the zakat payment has been
to respond SALAH and resubmit made, it is registered on a node in
their application. Upon the blockchain. Payers will
confirmation of details, another receive confirmation of
SMS will be delivered to the acceptance. Now, the project has
customer to confirm on the their money. When the money has
payment and a receipt of payment been fully utilised, the payers will
will be sent via SMS.The
be notified via the app. Thanks to
organizations dealing with zakat the transparency provided by the
The Potential of Application of Technology-Based Innovations for Zakat… 95

blockchain, there is more cooperative and nonprofit partners

confidence among payers that located in rural areas in Indonesia.
their zakat has reached the How this works is summarized in
intended recipients” (Noordin, the Figure 1.
2018). This app was developed in With regards to the issue
partnership with Dublin-based of exchange fees it was stated that
financial technology (fintech) Blossom has consulted with their
company AidTech and the internal shariah advisory and they
International Federation of Red have been advised that exchange
Cross and Red Crescent Societies. fees incurred when converting
It was supposed to be launched in from cryptocurrency to local
the end of last year, but it is not currency qualify as part of the
launched yet. This technology- total zakat payment. Bearing this
based innovation promoted in mind, it is stated that Blossom
transparency in zakat and sadaqat will try their best to trade the
boosting the confidence of crypto in a way that incurs
contributors. minimal or no fees. It is essential
In May 2018, it was to note that Blossom Finance has
reported that by Indonesian based published a working paper on the
Blossom Finance that in permissibility of Bitcoin and
Ramadan, Blossom Finance is cryptocurrency and has concluded
offering a free service allowing that bitcoin qualifies as Islamic
Muslims to pay zakat owed money, except where banned by
against cryptocurrency holdings local government, but cautions
directly using the blockchain and investors against speculation,
these payments collected by initial coin offerings (ICOs) and
Blossom will go towards orphans investment schemes. Blossom
and widows in Sumatra and Finance helps institutions to raise
Central Java, Indonesia via cost-effective, Shariah-compliant
Blossom’s network of financing from global investors
cooperatives and nonprofits using blockchain technology on
(Blossom, 2018). It was stated its Smart Sukuk platform.
that this service by Blossom is Blossom was founded in 2014 to
offered free of charge and no increase the availability of halal
payment is charged for using the financial products using
service. It is stated in the official technology. Since 2015, Blossom
website of Blossom that how this has been helping microfinance
service works is Blossom will institutions in Indonesia raise
accept payments in funds from international investors
cryptocurrency directly via the to fund micro-businesses aimed at
Blockchain to a Blossom reducing regional poverty.
controlled wallet held at a To make zakat
cryptocurrency exchange in administration more efficient and
Indonesia. Blossom then converts transparent the use of blockchain
the cryptocurrency to Indonesian technology with smart contracts
Rupiah and deposits the amount could be used in India as well.
into the bank accounts of their
96 International Journal of Zakat Vol. 4(2) 2019

Figure 1. Blossom’s Procedure to Pay Zakat via CryptoCurrency

Source: Information extracted from the official website of Blossom

6. Artificial Intelligence each type of Zakat they have to

The functions performed by pay every year, the system helps
humans are being replaced by users to: (1) determine if they are
machines and artificial required to give Zakat, (2)
intelligence is being utilized in the determine the unique conditions,
financial industry now. Another and the amount of each type of
innovation we see is zakat Zakat they have to pay every year.
chatbots powered with artificial The system was developed based
intelligence technology replacing on a rules-based expert system
the officers who provide shell. To develop such a system,
information about zakat and on information that is attained from a
the calculation of it. This could be human expert is represented in the
described as an improvised form of rules, such as IF-THEN.
version of the simple zakat Then the rules are used to perform
calculators we use now. In this operations that lead into achieving
regard, Al-Riyami, et. Al. (2014) certain goals. It is stated that after
from Sultan Qaboos University of reviewing the Zakat expert
Oman have presented in 15th system, the majority of the 20
European Conference on potential users also indicated that
Knowledge Management, ECKM the system saves time and effort
2014 a research on zakat expert in searching for information
system (ES). They state that ES is related to Zakat's rules. Users also
a part of applied artificial indicated that it is very useful for
intelligence and the idea of an ES calculating Zakat quickly and
is to convert knowledge from accurately, and is very beneficial,
human expertise to a convenient, and easy to use for
computerized system. The people who have no knowledge
objective of their study is to apply about Zakat. Other strengths of
expert system technology in the the system are that it is more
field of Zakat to assist Muslims in convenient than going to human
the decision making of identifying experts and provides a variety of
the rules of making Zakat and to Zakat types.
assist in complex calculations. In 2017, Pahang Zakat
They state that the objective of the Collection Center (PKZ) has also
Zakat ES is to specifically help introduced a chatbot called
people calculate the amount of ZakatChat (APPAGG, N/A).
The Potential of Application of Technology-Based Innovations for Zakat… 97

ZakatChat is an artificial through the BAZNAS website

intelligence-based application (baznas.go.id/zakatsekarang) and
provided by PKZ to smartphone through the Muzaki Corner
users and visitors to PKZ's official application service. An external
website to interact and help platform, where the platform
answer questions about zakat comes from BAZNAS partners
property. It is stated in their who provide special space and
official website that ZakatChat options for the community to
uses a specially programmed zakat through BAZNAS. Some of
search engine technology to the examples for this are the
match questions asked with option of zakat and charity
available databases. In addition, through kitabisa.com, gojek,
ZakatChat also guides users to bukalapak, tokopedia, and others.
obtain additional information Apart from this social media
from other mediums if the platform to facilitate direct
information is not available in the donations through social media is
ZakatChat database. made. National Zakat Index (IZN)
In 2018, in collaboration is also introduced to measure
with PT Artina Digitama zakat. BAZNAS has also a plan to
Indonusa (Artdigi), the Baznas of introduce an electronic commerce
Indonesia launched a Zakat platform to increase market access
Virtual Assistant Chatbot named for mustahik products benefiting
"Zaki" for the first time in the productive zakat program.
Indonesia (The Jakarta Post, India also can consider
2018). It was reported that Zaki using artificial intelligence to
can be accessed on the LINE improvise zakat administration.
messenger application under the 7. Big Data
name @zakibaznas and in the Zakat information or data
near future it will be available on management also face challenges
the Facebook Messenger chat as information on zakat including
application and the community the payers, distributors, receivers
can calculate the amount of zakat and other stakeholders need to be
accurately, literacy, and zakat maintained and the volume of
education as well as information these data are growing day by
on Baznas social and day. Big data can resolve this. Big
humanitarian programs. Zaki's data can be described as a
features that will be coming soon technology that enable to analyze,
include maps of the nearest systematically extract information
mosque location, prayer schedule from, or otherwise deal with data
reminders to da'wah material. sets that are too large or complex
With chatbot technology that is to be dealt with by traditional
equipped with Natural Language data-processing application
Process, it allows this feature to software. Sulaiman, et.al. (2015)
be able to chat with users to has stated that the main difficulty
analyze the wishes of the users. in handling large amount of data
Apart from the chatbot, BAZNAS is due to the five big data concepts
has developed an internal
involving volume, velocity,
platform, for donation services variety, veracity and value which
98 International Journal of Zakat Vol. 4(2) 2019

increases rapidly in comparison to generation of humans. As illustrated in

the computing resources and zakat this paper, each and every technological
administrators are currently facing innovation has its own unique
issues with the growing amount of advantages which will definitely assist
data on zakat payers, zakat in resolving some of the existing issues.
distribution and various zakat There is no lack of Information
recipients. They state that technology experts in the country and it
overwhelming amount of data is hoped that the findings of this paper
must be carefully managed by the will assist organizations like AMP to
zakat institutions and the consider using technological
appointed zakat fund trustees as innovations to manage zakat.
zakat data resides in massive,
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100 International Journal of Zakat Vol. 4(2) 2019
 International Journal of Zakat Vol. 4(2) 2019 page 101-110
A Maqasid and Shariah Enterprises Theory-Based Performance
Measurement for Zakat Institution

Ataina Hudayati and Achmad Tohirin

Universitas Islam Indonesia

ABSTRACT

This study aims to develop a performance measurement system for zakat institutions from
the perspective of maqashid al-Shariah and Islamic enterprise theory. This study embarks
from previous studies focusing on the performance measurement methods applied to the
zakat institutions. The understanding of maqashid al-Shariah in this paper refers to the
concept formulated by Al Ghazali and Ibn Ashur. The basis of selecting so is their widely
known concept in the contemporary research. This paper concludes that the performance
measurement based on maqashid al-Shariah for Islamic bank can be adopted in zakat
institution by making various adjustments according to the characteristics of the
institution. In addition, this study also designed a performance scorecard to assess the
performance of zakat institutions based on maqashid al-Sharia and Islamic enterprises
theory. This scorecard method can calculate the index of zakat management of the related
institution from a broader perspective.

Keywords: performance, measurement, maqashid al-Shariah, enterprise theory

INTRODUCTION for 2017 period, only reached 2.9 percent

from its potential of Rp. 217 trillion
Poverty is a classic problem that (BAZNAS, 2018). Aibak (2015) argued
massively occurs in developing country. that one of the reasons for the low
Poverty is a complex problem. Poverty concern of the community in paying
and its implications can involve all zakat formally to the institution is
aspects of human life. To reduce the because the institution’s method of
problem of poverty, Islam offers zakat as collection. In some cases, the zakat
a comprehensive solution. That is, one of management institution seems to be
the reasons for establishing zakat passive in collecting zakat.
institution is to improve the effectiveness In order zakat can achieve its
of zakat management. In Indonesia, such objectives, the institution must be in
government institution is called as the accordance with the objectives of
National Boar of Zakat, Republic of Shariah or maqashid al-Shariah.
Indonesia (BAZNAS), while those the Maqashid al-Shariah is the basic
private ones called Lembaga Amil Zakat paradigm of Islamic economics
(LAZ). Both are governed under the low (Muzlifah, 2013). The importance of
No. 23 of 2011. maqashid al-Shariah concept has been
According to National Zakat addressed by some researchers. In the
Statistics 2017 published by BAZNAS, context of zakat institution, Hapsari and
the number of zakat institution in Abidin (2016) examined the distribution
Indonesia reaches to 603 institutions. of zakat based on the maqashid al-
However, the overall percentage of zakat Shariah framework. The same attempt
collection in the nationwide of Indonesia was also done Mardiah and Jamil (2016)
102 International Journal of Zakat Vol. 4(2) 2019

who reviewed the effectiveness of the to be a muzakki, even to achieve so

distribution of zakat at the Dompet requires an extensive work. Thus, it is
Dhuafa (DD) Palembang. The results of interesting to assess the degree to which
the study show that through various a zakat institution has been endorsing the
programs, DD Palembang has been able concept of maqashid al-Shariah,
to promote maqashid al-Shariah in the particularly in the context of Indonesia.
local context. In the next section, the theoretical
Furthermore, Fitria (2018) explanation is discussed further covering
examined the conformity of social the concept of maqashid al-Shariah, the
entrepreneurship programs in zakat innovation in the management of zakat
institutions using maqashid al-Shariah and the understanding of stakeholder
and sampled DD for a case study. The theory. Further, the discussion also
work highlighted the significance of the mainly reviewed some relevant previous
concept to be employed when analysing studies. The main part of this paper
the performance of Zakat institution. In establishes the design of performance
like manner, Nugroho & Wahyuni measurement for zakat management.
(2019) elaborated upon the necessity of Finally, this paper provides conclusions,
maqashid al-Shariah to develop a implications and suggestions.
framework for designing and
implementing performance
measurement. They tested their method LITERATURE REVIEW
by measuring the performance of the al-
Haromain zakat institution in Malang Maqashid al-Shariah
based on the concept of the balanced According to al-Syathibi as quoted by
scorecard and the perspective of Aibak (2015), the Shariah actually aims
maqashid al-Shariah. These reviewed to realize the welfare of humans in the
studies indicated the importance of world and the hereafter. From this basis,
considering maqashid al-Shariah when it is clear that in fact the laws were not
analysing the performance of Zakat made for the law itself but were made for
institution. the purpose of all human being.
As elaborated in the above text, Muhammad Abu Zahrah asserted that
this study aims to expand the previous the welfare for all human being should
studies by constructing more be achieved through individual
comprehensive model of performance education, the realization of justice and
measurement for zakat institution based welfare of the community (Mohammed
on maqashid al-Shariah and Islamic et al. 2008).
enterprise theory. This study integrates Al-Ghazali as mentioned in the
these concepts for a comprehensive study of Syofyan (2017), stated that the
method of measurement. primary purpose of Shariah is to promote
Measuring the performance of human welfare, which lies in protecting
zakat institutions is important. This is the followings;
because in general, the need to assess the a. faith (din),
effectiveness and the efficiency of zakat b. life (nafs),
institutions is vital for their c. intellectual (aql),
improvement. The simplest way to d. progeny (nasl), and
evaluate the effectiveness of zakat e. wealth (maal).
institutions is by looking at the speed of
transformation of converting a mustahik
A Maqasid and Shariah Enterprises Theory-Based Performance… 103

Further, Mulyana (2017) c. traditional productive and

concluded the concept of welfare in d. creative productive.
Islam, which is rooted from Al Ghazali’s Traditional consumptive is the
notion of maqashid al-Shariah. In the distribution of zakat to be used directly
study, maqashid al-Shariah is believed to by the mustahik, to meet their daily
be the most comprehensive concept of
needs. The creative consumptive is the
welfare. That is because the concept not distribution of zakat which is manifested
only covers the elements of material in other forms of the original goods, but
needs but also moral and spiritual still in the consumptive category, for
aspects. Thus, it what differs from the example zakat is distributed in the form
concept of welfare which is promoted by of school tools or scholarships.
the western concept, which only focuses Furthermore, traditional
on the material aspects. productive zakat is the distribution of
Based on the above explanation, zakat given in the form of productive
it is clear that maqashid al-Shariah has
goods such as buying goats, cows,
not only the dimension of the worldly commercial equipment and so on.
aspect but also the hereafter. Finally, creative productive zakat, which
is the distribution of zakat which is made
Innovation in zakat management
in the form of business capital.
Komariyah (2013) explained the main According to Muhammad &
purpose of zakat is to realize justice. Mas’ud (2005) as quoted in Ningrum
Therefore, zakat is required in narrowing (2016), productive zakat is the giving of
economic inequality in the society, by zakat enabling the recipients to sustain
distributing it specifically to certain the property from the received zakat. In
groups who we call them as Mustahiks other word, productive zakat is zakat
(zakat recipients). As prescribed in al- where the assets or zakat funds given to
Qur'an, zakat is distributed to eight Mustahik are not directly spent but it
ashnafs, which are; converts into a capital like asset. This is
a. Fakir (the poor), done to strengthen their businesses
b. Amil (now can be described as capacity and capability. By musthaik
those who work in Zakat being enhanced their capacity and
institution), capability, their business will be able to
c. Muallaf (those who revert to generate more income and profit.
Islam) Finally, they can fulfil their needs
d. Slaves, sustainably.
e. People who are in debt, There are four models of
f. Fisabilillah and productive zakat distribution
g. The wayfarer. (Muhammad, & Mas’ud, 2005). First,
budget surplus model. In this model,
There are many innovations in
zakat is partly distributed and the rest is
management of zakat to increase the
used for productive projects. Second, in
benefit of zakat to the society. One of
kind model. It is a system of zakat
them is the concept of productive zakat.
distribution where zakat funds are not
According to Aibak (2015), zakat
distributed in the form of money but are
distribution can be classified into four;
given in the form of production
a. Zakat distributed traditionally for
equipment. Third, the revolving fund
consumption,
b. reative consumptive, model. This model provides loans to the
mustahik in the form of qardhul hasan
104 International Journal of Zakat Vol. 4(2) 2019

financing. The mustahik is to return the Based on the Abu Zahrah

initial amount of loan. concept, Mohammed et al. (2008)
designed a technical performance
Shariah enterprises theory measures for Islamic banks. The work
done by Mohammed et al. (2008) has
This theory was developed by
significantly influenced scholarly
Triyuwono (2001). The idea that profit-
discussion on measuring the
oriented or stockholders-oriented in
performance of Islamic banks. For
conventional companies are seen to be
example; the recent study done by
not the right orientation for Islamic
Hudaefi & Noordin (2019); Kholid and
companies. To replace the concept of
Bachtiar (2015), and among others, are
stockholders-oriented, the author
the example of how the work of
suggested the use of Shariah enterprises
Mohammed et al. (2008) has credited the
theory which is oriented to zakat (zakat-
novelty to the general discourse of
oriented), oriented to preservation of
Islamic economics.
nature (natural environment) and
oriented to stakeholders. Furthermore, Mohammed et al.
(2015) developed further the
Furthermore Triyuwono (2001)
performance measurement for Islamic
explained that the orientation of zakat
banks with employing the five elements
means that the company will strive to
of al-Ghazali’s maqashid al-Shariah.
achieve the optimum realization of zakat
These including preserving;
(both material and value). Then the
a. Religion,
environment and stakeholder-oriented
b. Life,
has the implication that Shariah
c. Intellect,
organizations must have a concern to
d. Progeny, and
distribute the “welfare” (added value)
e. Wealth.
that has been successfully created to
nature and stakeholders. This Shariah In designing performance ratios,
enterprises theory has been used by Mohammed et al. (2015) employed the
Hermawan & Rini (2016) to analyze the concept of maqashid of Al Ghazali with
effectiveness of the management of the concept of maqashid of Ibn Ashur as
zakat institutions. In their research, explained in Table 1.
Hermawan & Rini (2016) claimed that Thus, from the above
the sampled zakat institution had elaboration, it is rationale to develop the
performed its obligations to God, and to performance measurement based on
stakeholders. However, for obligations maqashid al-Shariah in the context of
to nature and employees have not been zakat institution.
fully met.
Maqashid al-Sharia on Management of
Maqashid-Based Performance Zakat
Measurement Model for Islamic Banks Mardiah and Jamil (2016) examined the
Mohammed, et al. (2008) developed suitability of zakat distribution program
performance measurements based on of DD Palembang with the concept of al-
Abu Zahrah’s maqashid al-Shariah. Ghazali’s maqashid al-Shariah.
These include; The results of the studycan be
a. individual education, seen in Table 2. The researchers
b. establishing justice, and concluded that with the programs
c. public interest. implemented, DD Palembang has been
A Maqasid and Shariah Enterprises Theory-Based Performance… 105

able to promote the five objectives of a. Economy;

Shariah. b. Social and humanity;
c. Health;
d. Education; and
MAQASHID AL-SHARIAH-BASED e. Preaching.
METHOD OF MEASUREMENTS
The distribution of zakat in
FOR ZAKAT INSTITUTIONS
BAZNAS must be considered in
accordance with the maqashid al-
Benefit of Zakat for Mustahik
Shariah.
The first stakeholder of zakat institution
is mustahik. Mustahik will receive great Benefit of zakat for Muzaki
benefits from zakat institutions
For muzaki, zakat is the implementation
depending on the quality of zakat
of one of the pillars of Islam. Therefore,
distribution system.
by carrying out the obligation of zakat,
Rahmawati (2011) argued that in
the view of Islamic economics, the muzaki has performed the first goal of
maqashid al-Shariah, which is to
distribution system is part of economic
preserve religion. In addition, zakat
activity that has a strong influence on the
serves to purify property. Therefore, by
distribution of people's welfare.
paying zakat, muzaki has achieved the
Distribution system according to Islam is
fifth element of maqashid al-Shariah,
a rule that cannot be separated from the
which is to preserve property. On this
provisions of maqashid al-Shariah.
point, it can be understood that zakat
Therefore, there are two things that must
institution has assisted muzaki in
be considered in an effort to improve
achieving two objectives of Shariah,
welfare, they are;
which are preserving religion and
a. Reducing the gap between
preserving wealth.
community groups by opening
Zakat institution must help
jobs, and
muzaki to pay zakat correctly and
b. Providing direct assistance to the
properly. Therefore, the zakat needs to
poor, so that they can improve
be socialized with Shariah rules to
their quality of life.
determine the amount of assets that are
According to Shariah, mustahiks zakat-able. Knowledge and
who are staying around zakat institutions understanding of the assets owned such
must get first priority to receive zakat. as income, living expenses, debts owned,
Once all the designated mustahik receive primary and non-primary needs must be
zakat, then the remaining zakat can be known and considered. In addition,
allocated to other regions. In addition, socializing zakat to muzaki, the benefits
zakat managers also need to consider the received by muzaki may enhance the
form of zakat distribution whether zakat muzaki easiness for paying their zakat.
will be distributed in the form of Aibak, (2016) in a study
traditional consumptive, creative conducted at BAZNAS Tulungagung,
consumptive, traditional productive or provided an explanation on how zakat
creative productive. institutions can improve services to
Amymie (2017) explained the muzaki so that muzaki will be easier,
programs carried out by BAZNAS can comfortable and willing, to pay zakat.
be classified based on sectoral grouping, Zakat paid by employee in Tulungagung
namely; regency is collected by the zakat unit
106 International Journal of Zakat Vol. 4(2) 2019

which is usually called as Unit Penerima payment system of zakat institution

Zakat (UPT). Following this, UPT complies with Shariah rules, it will be
proceeds the collected zakat to possible for amil to obtain the five
BAZNAS. maqashid al-Shariah as explained before.
The benefits received by amil
Benefit for Amil from zakat institutions are greatly
influenced by the level of public trust on
Amil has the responsibility to manage
the zakat institutions. One important
zakat. With this responsibility, amil has
aspect affecting the level of public trust
sacrificed his time and energy to manage
on zakat institutions is the accountability
zakat institutions. Through their
of zakat institutions. This is part of the
expertise, which requires formal and
findings of study done by Ikhwanda &
informal education, amil has worked for
Hudayati (2019).
a significant contribution to the success
The findings of the study imply
of the zakat institution. Because of the
that zakat institutions need to improve
contributions they have made, amil has
the right to receive rewards for what they their accountability to gain trust from the
public. By enhancing trust from the
give.
public, zakat institutions will be able to
In addition, most amil zakat
develop and continue functioning
working in zakat institutions are
effectively as a trusted institution. In
employees of zakat institutions. Perhaps
addition to accountability, public trust is
the income from the zakat management
also influenced by the degree of
organization is the only salary they
transparency, professionalism and
receive. Therefore, the welfare of amil
competency of zakat institutions in
needs further attention, so that amil will
managing zakat.
get benefits, especially to get the fifth
element of Maqashid al-Shariah;
Benefit for nature/environment
increase prosperity through wealth
improvement. Shariah enterprises theory of Triyuwono
Nevertheless, improving (2001) stated that organizations based on
prosperity is not the only amil objective. Islamic principles must provide benefits
Amil also has the right to get other to all stakeholders, both direct and
maqashid al-Shariah elements that are indirect stakeholders, and provide
preserved for their religion, life, intellect benefits to nature. Nevertheless, the
and descent. To preserve religion, zakat results of a study conducted by
institutions may design programs such as Hermawan & Rini (2016) stated that
religious lectures, congregational zakat institutions have not fully been
prayers and various other activities. To able to provide benefits to nature even
protect amils’ children, the scholarship though responsibilities to other
program is an appropriate alternative. stakeholders have been fulfilled.
Provision of amil salaries needs to be
considered carefully, because Shariah Performance measurement system for
rules limit amil rights to a maximum of zakat institution
1/8 of the amount of zakat received. Developing a quantitative performance
Accordingly, amil welfare improvement measurement system is critical, so that
can be attained by taking funds from an index can be produced to measure the
other sources, for example unrestricted performance of zakat institutions. This
infaq or funding assistance from the state study suggests zakat institution to adopt
budget or regional budget. If salary
A Maqasid and Shariah Enterprises Theory-Based Performance… 107

the performance measurement financial statements of zakat institutions

scorecard. This method is designed as a whole. It is important to be noted
following Mohammed et al. (2008) with that the weakness of the performance
some adjustments and contextualisation measurement is not considering whether
to the nature of zakat institution. the zakat institution has fulfilled its
The authors of this paper are of obligations to all stakeholders.
the view that the performance To make practical contributions
measurements proposed by Mohammed to zakat institutions, this study designed
et al. (2008) are more appropriate for a more comprehensive performance
measuring performance at the overall measurement scorecard that can be
organizational level. This is due to the applied at the organizational level as well
data used to measure performance ratios as the organizational unit level described
are taken from the annual reports and in Table 3.

Table 1. Al-Ghazali and Ibn Ashur Maqashid al-Shariah

Maqashid Sharia Al Ghazali Maqashid Sharia Ibn Ashur

Preservation of religion/faith Freedom of faith.
Preservation of life/soul Preservation of human dignity.
Protection of human right.
Preservation of intellect/mind Propagation of scientific thinking.
Avoidance of brain drain.
Preservation of progeny Care of family.
Preservation of wealth Wellbeing of society.
Minimising income and wealth disparity.

Source: Adapted from Mohammed et al. (2015)

Table 2. Maqashid Sharia and Type of Program in Dompet Dhuafa

Maqashid Sharia Al Ghazali Program/Activities

Preservation of religion/faith Amazing Muslimah.
Ramadhan.
Preservation of life/soul Health Services
Mustahik Empowerment
Home based clinic
Preservation of intellect/mind Educational Scholarship
Preservation of progeny Indonesia Creative Orphans
Preservation of wealth Farmer Empowerment
Livestock’s Empowerment and Beneficiaries
Incubator

Source: Mardiah & Jamil (2016).

108 International Journal of Zakat Vol. 4(2) 2019

Table 3. Performance Measurement Scorecard for Zakat Institution

Program Maqashid al-Shariah Index/ Financial Benefit Index/

Activitiy MS1 MS2 MS3 MS4 MS5 Item Muzaki Mustahik Amil Nature Society Item
1 A 1 1 0 1 1 0.8 1 0 1 0 0 0.4
2 B 0 1 1 1 1 0.8 0 1 0 0 1 0.4
3 C 1 1 0 0 1 0.6 1 1 1 1 1 1
4 D 0 0 1 1 1 0.6 1 0 1 0 0 0.4
5 E 1 1 0 1 1 0.8 1 0 0 0 0 0.2
Index/Item
0.60 0.80 0.40 0.80 1.00
Maqashid Index
0.72
Benefit Index 0.48

Performance Index 0.6

Source: computed by Authors.

CONCLUSION 3) Performance measures that

integrate the concepts of
This study has discussed previous maqashid al-Shariah, and Shariah
research related to performance enterprises theory (SET) as
measurement based on maqashid al- exhibited in Table 3, that
Shariah in general context of Islamic identifies the programs carried out
banking and linking it to the context of by zakat institutions to meet
zakat institutions. The results of the maqashid al-Shariah and fulfilled
existing scholarly works were found that their obligations to all interested
significant efforts have been made to parties and stakeholders.
develop the concept of performance
The performance measurement
measurement, including for zakat based on maqasid al-Shariah as
institutions. To complement what has developed in this study is relevant to
been designed by previous research, this zakat stakeholders. Zakat institutions
study designed a performance may employ the developed benchmark to
measurement scorecard which function
communicate their performance on
is to complement the existing
maqasid al-Shariah, so that their efforts
performance measurements. The in actualising so is measurable.
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