Evaluating the Effectiveness of Zakat Distribution Models in Enhancing Economic Growth

Abstract

his paper aims to assess the efficiency of different paradigms of zakat distribution in promoting economic development in Indonesia using data from the years 2018-2022. The study employs a quantitative research methodology through the use of numbers Comparison is done on the secondary data that used the government data, BAZNAS, and the Indonesian Bureau of Statistics. Three main zakat distribution models for cash transfer, in-kind, and productive zakat are: The efficacy of these models in relation to economic indicator such as poverty reduction, employment generation and income enhancement is discussed. By using descriptive and inferential means such as multiple regression and ANOVA tests, this study shows that productive zakat models are the most effective in creating sustainable economic development. The findings show that poverty rates have reduced significantly and unemployment levels have also reduced along with raised household income among the zakat recipient group. In this regard, the present research endeavours to fit this gap by presenting empirical evidence of the impact of different modalities of zakat distributions on important economic indicators. In particular, the study pays special attention to the fact that specific zakat strategies should be tailored to local economic environments. Therefore, this research will give useful information to the policymakers and the zakat institutions to focus on productivity of the zakat towards combating socio-economic problems.