On the Effectiveness of Zakat Disbursement: Evidence from BAZNAS Beneficiaries in the Central Region of Indonesia (Tabanan, East Kutai, and Gorontalo)

Abstract

This paper aims at examining the impact of productive-based zakat program distributed by BAZNAS to the Mustahik in the central regions of Indonesia; i.e. Tabanan (Bali), East Kutai (East Kalimantan), and Gorontalo. The poverty statistics of the regions are commonly higher than that in the average of the nation, requiring a form of intervention that is not always dependent on government social programs. This has been done through designing the productive-based zakat program that will assist Mustahik in establishing a business, or upgrading the scale of economies for their existing business. By using the National Zakat Index framework, this research provides an actual data on how far the achievement of the productive-based zakat program in improving the welfare of Mustahik. In doing so, a direct survey to Mustahik in three regions in Indonesia was conducted between October and November 2016. Our results show that the productive-based zakat distribution managed by BAZNAS in those regions is positively correlated to the alleviation of poverty of Mustahik, and thus improves the welfare both materially and spiritually. 

Keywords: Zakat, Mustahik, Productive-based Program, National Zakat Index

JEL Classification: O15, O53, P36