Empowering Zakat Funds for the development of MSMEs

Abstract

The growth of MSMEs is one sector that can increase national income, economic growth which leads to social wellbeing. However, in the course of their business, MSMEs often face several problems such as; capital, knowledge, market access, infrastructure, management skills, and community support. Observing, this phenomenon, we do not just have to stand by government policy completely, Islamic social financial instruments can play a vital role, one of which is through zakat collection funds. These funds can be allocated not only for consumptive functions but also productive ones. Thus, the urgency of this research is to analyze the empowerment of zakat collection funds for the development of MSMEs. The research method is qualitative in nature with a content analysis approach. The data was collected through theoretical analysis, empirical research, and case studies that have been published in the scientific literature. The findings of the research emphasize that zakat has great potential as an Islamic social finance instrument that can have a positive impact on the empowerment and growth of Micro, Small, and Medium Enterprises (MSMEs) in Indonesia. With efficient and effective implementation, empowering zakat funds can be a valuable instrument in realizing economic, social, and environmental development goals at the local and national levels.