H ABDUR RAQEEB argues for institutionalisation of Zakat which may be undertaken to create a better society with a focus on social welfare and economic empowerment, and presents a 10-point roadmap for thoughtful consideration.
All Muslims are eligible to pay 2.5% of everything they own – savings, bank accounts, gold, investments, in excess of what they use annually. Though Zakat is the third pillar of Islam, not much is known in details nor is it widely practised among the masses. Whereas other pillars – prayers, fasting and pilgrimage are well-known and very popular among the community. Many are confused by the subject and are paying Zakat incorrectly or concerning point is not paying it at all. Further, Zakat is considered mere charity while it is actually an institution to transform both the faith and the faithful.
The Qur’ān has clearly defined eight categories of Zakat beneficiaries but people by and large are satisfied by giving few kilos of food grains or few meters of clothing and a small amount of money to the needy and even after receiving Zakat the poor and needy continue to remain in the same condition for years together.
The Sachar Committee Report, SNAP (Social Network for Assistance to People) Report of Nobel laureate Dr. Amartya Sen and more recently data and details provided by Dr. Christophe Jaffrelot, are an eye-opener to know the plight of the Indian people and Muslims in particular. One-fourth of beggars in the country are Muslims, among them, women are in a majority. Muslim prisoners are double compared to their population and one-third of the young men and women between 18-25 years are uneducated and unemployed.
The collective obligation (Farz-e-Kifayah) of a Muslim society is to take care of the basic needs of the poor. Poverty has two aspects – Economic and Social. The economic aspect consists of necessities of daily life like food, clothing, shelter, safe drinking water. The social aspects are access to information, education and healthcare.
The institutionalisation of Zakat is the first step to be undertaken to create a better society with a focus on social welfare and economic empowerment.
A 10-point roadmap is presented before the readers for thoughtful consideration and effective communication among the masses.
1. GENERAL AWARENESS
As a first step, awareness has to be created among the people about the importance of Zakat and how this institution was built during the time of the Prophet ﷺ and his caliphs. It should be highlighted that Zakat was institutionalised in the Prophet’s period with his outstanding companions designated to collect and distribute it.
Such was the situation during the period of Caliph Umar and then of Umar bin Abdul Azeez that there were people to give Zakat but no one to receive it. An exemplary “Caring and Sharing Society” emerged in those Golden periods.
2. ENGAGING PIOUS AND PROFESSIONAL PEOPLE
Apart from creating awareness, men and women of skill and spirit have to be involved in the management of this system. Not only people with piety but also professionalism have to be included. Scholars well versed in the understanding of today’s worldly affairs, those having knowledge of accounts and audit like Chartered Accountants along with social workers having good PR traits. Thus, not only an ethical but efficient system has to be evolved. A humble beginning
can be started from the mosque level in each locality.
3. FINANCIAL LITERACY & WEALTH CREATION
Financial literacy is lacking in our community. The creation of wealth and indulging in entrepreneurship and gainful employment is to be encouraged. A habit of saving and investment into productive business has to be planned so that a strong community of “Givers” can be created. Thus a real economy is envisaged where people create employment opportunities as well.
The details of the market of Medina established by Prophet Muhammad ﷺ and the example of his wife Khadijah should induce Muslims of today to engage in gainful entrepreneurship. Among the 10 prominent companions of the Prophet who were assured of Paradise (Ashrah Mubashra) four of them – Caliph Usman, Abdur Rahman bin Awf, Zubair bin Awwam and Talha bin Ubaidullah were billionaires in today’s standard.
4(A). INCLUSION OF MODERN-DAY ZAKAT MANAGEMENT IN MADRASA SYLLABUS
An initiative has to come from the Ulema of the community. Zakat, as a detailed subject, has to be included in the syllabus and curriculum of the religious seminaries, practical field works of socio-economic survey and focusing on the real life of the people, have to be undertaken. Various departments of Zakat require different knowledge and skills e.g., for collection of Zakat one should acquire the knowledge of psychology, Personal Relations (PR) for approaching people, accountancy and auditing for bookkeeping, and statistics for conducting a socio-economic survey. And distribution to various categories require financial management expertise.
Inclusion of these subjects in the religious seminaries will equip the Ulema in spearheading the Zakat Movement in the country. Organisations like the Islamic Fiqh Academy of India and the World Zakat Council can be approached to coordinate in this regard.
4(B). MAKING MOSQUE A CENTRE
To begin, in every mosque a committee of the community members should be formed, in which a very well versed scholar, a Chartered Accountant and few social activists are included and initial work started by making a socio-economic survey of the area and based on this both collection and distribution of Zakat has to be undertaken. A few women also have to be involved in this endeavour to gauge the financial condition of the families, especially women and children. Further, these women can take the message and mission of Zakat into the families and the community. Care has to be taken in the selection of committee members that they have skills as well as a spirit – a combination of piety cum professionalism.
5. FIN-TECH
Fin-Tech can play a positive and powerful role in the collection and distribution of Zakat. Digitalisation of Zakat proceeds can reenergise the whole system. Apart from providing greater convenience for the people, it will not only strengthen trust and confidence but also build transparency. Crowdfunding is increasingly used in Fin-Tech which raises money from a large pool of people commonly known as a Crowd through internet platforms. Block-chain is another method increasingly used for account and auditing purposes.
6. ZAKAT & MICROFINANCE
Microfinance is another tool that can be adopted with the Zakat money.
Zakat money is mostly allowed to be spent on meeting the emergent needs of the poor. But if it is used as seed money (investment) rather than spent money (consumption), a sufficient number of business enterprises, preferably small and petty businesses, can be developed. Once the capacity of the poor is enhanced for doing micro and small businesses, the opportunity to employ other poor people will also be increased consequently, and poverty would be reduced exponentially. Zakat Takers will become Zakat Givers.
It is reported by Dr Hamidullah that Caliph Umar used to provide interest-free loans from Zakat to the needy and he used to avail this facility.
7. MICROFINANCE AND SKILL DEVELOPMENT THROUGH ZAKAT
In some countries like Malaysia, the poor are categorised as Productive Poor and Non-Productive Poor. Non-Productive poor are those who are old aged, widows, handicapped and physically challenged, those who are affected by terminal illness and in need of medicines throughout the year and those unable to work – are provided regular amounts for their livelihood.
Productive poor are those who are self-employable, skilled persons whose skills can be enhanced and those who do not have the requisite capital to trade. The poor of this second category are specially focused and provided money substantially to become financially independent and self-reliant so that they can come up in life and livelihood and in a few years themselves give back to the society by becoming Zakat Givers.
8. ZAKAT & NON-MUSLIMS
According to Caliph Umar, among the eight categories of Zakat beneficiaries, “Fuqara” are the poor among the Muslims and “Masakin” are from among the non-Muslims.
In a plural country like ours, if even a small percentage of Zakat money is distributed among the poor and needy of other communities, it will have a very positive effect and a unique USP of the Muslim community can be created. Eminent religious scholars and community leaders should have a dialogue in this regard and create a consensus in this regard before implementation.
9. SUCCESS STORIES IN ZAKAT MANAGEMENT OF OTHER COUNTRIES
World Zakat Forum has about 40 countries, in which some of the countries where Muslims are in minority are South Africa and Ghana, and the rest are Muslim majority countries. In Malaysia and Indonesia, various new techniques and tools are being employed for Zakat utilisation.
BAZNAS of Indonesia has many novel experiments both in social and educational sectors along with investments like mass sanitation programmes and renewable energy. Malaysia also has many new techniques in collection and distribution as well as the use of Fin-Tech.
SANZAF in South Africa is unique in the sense that it is a county where only 2-3 % Muslims are there but this organisation has existed for several decades and currently headed by two eminent ladies, Chairperson Ms Fayruz Mohamed and CEO Yasmina Francke, with 52% female staff and winning Global Good Governance Award from International Financial Advisory, Cambridge, UK for Capacity Building in the social sector and Philanthropy.
Our neighbour country Bangladesh has a robust Zakat Management Centre with highly competent persons at the helm of affairs with well-trained staff and is delivering effective results in various fields like Rural Development, Child Education, etc.
UK with its UK Zakat Foundation is unique in contributing significantly to various fields.
10. ZAKAT AND SDG
Lastly, mention of United Nations Sustainable Development Goals (SDG) which has charted a universal call to action to “end poverty, protect the planet and ensure that all people enjoy peace and prosperity” has some striking commonalities between SDG and Zakat and its foundational goals of Shariah called “Maqasid-e-Shariah”.
Zakat organisations in Indonesia and Malaysia have come out with various projects along with UNDP and other UN agencies. We in India also can look forward to collaborating with UNDP and other UN agencies, with Zakat organisations here to play a similar role in our county to eradicate poverty and create a caring and sharing society for all.
[The writer is General Secretary, Indian Centre for Islamic Finance, New Delhi. [email protected]]