Is Zakat Capable of Alleviating Poverty ? : An Analysis on the Distribution of Zakat Fund in Malaysia

Poverty is a serious problem in a majority of Muslim countries. The teachings of Islam, through the Holy Quran and the Hadith, stresses on the significance of zakat as a social tool to bridge the differences between the rich and poor Muslims. Zakat viewed in this context can play an important role in Muslim socio-economic development; if it is managed properly. Having said this, zakat institutions in Muslim countries had hitherto not only been seen as less successful in overcoming the problem but also eradicating poverty. One of the reasons can be attributed to how zakat institution is perceived to have been so engaged in its efforts to “optimize” the collection of zakat, which unfortunately at the expense of the disbursement side. It is against this backdrop that this paper is written. Specifically, this paper analyzes the current practice of zakat distribution in several states in Malaysia with an eye on examining how zakat fund is being distributed among the eight asnaf. It critically evaluates whether or not the current practice of zakat distribution in Malaysia is effective in alleviating poverty among the poor Muslim population in Malaysia. Based on the findings, the paper provides several relevant recommendations on how to improve the distribution of zakat fund so that it can be effectively used to help the poor and eliminate poverty.