A Decent Work and Economic Growth: The Potential of Asnaf Entrepreneur in Achieving Sustainable Development Goals (SDGs)

A Decent Work and Economic Growth: The Potential of Asnaf Entrepreneur in Achieving Sustainable Development Goals (SDGs)

Siti Khalilah Binti Basarud-Din (Zakat Kedah Board, Malaysia) and Hafizah Binti Zainal (Kedah Zakat Board, Malaysia)
Copyright: © 2020 |Pages: 11
DOI: 10.4018/978-1-7998-3042-9.ch011

Abstract

Asnaf entrepreneur is a micro SME entrepreneur who plays a significant role in the contribution of the economic sectors. In 2018, Malaysia registered a total of 907,065 SMEs, with micro-enterprises accounting for 2.3% (20,612) of the total. The poor and needy entrepreneur is also part of the successful key to support Malaysian to achieve Sustainable Development Goals (SDGs). The objective of this study is to identify the potential of poor and needy entrepreneur in Kedah Zakat Board (LZNK) to achieve SDGs. This paper uses a conceptual study method and explore the literature as a guide for enhancing knowledge on this area. This paper suggests a potential sustainable development model with four variables of poor and needy entrepreneurs in achieving SDGs goals. The contributions and implications of the study are discussed at the end of this paper.
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Introduction

Poverty is part of the global issues that have affected society, particularly in the Muslim community. In Malaysia, the poverty rate decreased from 0.6% to 0.4% between 2014 and 2016. (Malaysian Statistics Department, 2016). However, the income inequality gap has not matched the real income of the poor (Khazanah Research Institute, 2018). According to the Pew Research Centre (2014), 77% of Malaysians believe that the gap between rich and poor is a major problem. Impact of the situation, zakat plays a key role in the growth of the Muslim economic system in all aspects of the economy, education, regulation and so on. Zakat’s aim is to achieve socio-economic justice (Adnan & Bakar 2009). Zakat is the fourth pillar in Islam that all affordable Muslims must fulfill to underprivileged people. Zakat’s word linguistically refers to the act of cleansing or purifying something that is dirty. In legal terms, zakat pays a certain amount of surplus wealth to the specified beneficiaries each year. There are 8 beneficiaries in Glorious al-Quran, such as the destitute, the poor, the zakat workers (Amil), the new Muslim (Muaallaf), free slaves, the indebted, on the path of Allah and the stranded traveller. Abu Bakar and Abdul Rashid (2010) stated that zakat can be productive and sustainable if poverty alleviation can be managed efficiently and effectively.

A good platform for zakat to become productive and sustainable, which gives the poor and needy an opportunity to engage in business until they can earn their own living independently and be self-sufficient (Mohamed, Mastuki, Yusuf, & Zakaria, 2018). Poor and needy entrepreneur is a micro SME entrepreneur who plays a significant role in the contribution of the economic sectors. In 2018, Malaysia registered a total of 907,065 SMEs, with micro-enterprises accounting for 2.3% (20,612) of the total (SME Annual Report, 2018). Despite having such a large role, micro-entrepreneurship conditions still pose many challenges in accessing capital. The role of zakat is therefore essential to the welfare of the needy by providing capital to generate circulation income for recipients to pay zakat through business opportunities. The different programmes for entrepreneurship have been developed by the zakat institution. The zakat institution seeks to create an effective way for the poor and needy to become an entrepreneur and to improve their social and economic life through the Asnaf Entrepreneurship Programme (AEP). The difference between the entrepreneurship programmes of the zakat institutions and other entrepreneurship programmes is that the source of capital given to the poor to start a business is the use of zakat money.

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