Islamic Finance A Support to Development and Economic Growth: the Principle of Zakat as an Example

Saïda Daly^1, and Mohamed Frikha¹

¹Faculty of Economics and Management of Sfax, Laboratory URECA, University of Sfax, Street of airport, km 4.5, LP 1088, Sfax 3018, Tunisia

Cite this paper:
Saïda Daly and Mohamed Frikha. Islamic Finance A Support to Development and Economic Growth: the Principle of Zakat as an Example. Journal of Behavioural Economics, Finance, Entrepreneurship, Accounting and Transport. 2015; 3(1):1-11. doi: 10.12691/jbe-3-1-1

Abstract

“Zakat”, the third pillar of Islam, is central in Islamic economic. It is a work of cult financial, purifies the soul and increases its merits, as it purifies the property and increases the wealth. It means etymologically, grow, propose, and be fair and clean. It reduces the gap between rich and poor. The importance of “Zakat” is revealed by the number of Qur'anic verses that advocate the necessity of Zakat and its role as a tool to ensure the socio-economic stability and ensure stabilization the phases of economic cycle. Our purpose, in this study is to present a brief summary related to Islamic finance and bank. We seek to provide some generalities about Zakat such as their main characteristics. In addition, this paper aims at adding to reliable solutions of the menace of poverty in the Muslim community that buttress the payment of Zakah on employment, and on investment. The paper is purely a descriptive research that explores the socio-economic benefits of Zakat and its roles in the economic cycle. In view of this, the paper recommends to those in authority to take a juristic stance on the matter and generate Zakat funds from employment and professional income as well as ensure proper disbursement of the funds to the target group in order to curb the poverty situations. It advocates also the benefits of Zakat in the economic cycle via a comparison of the two contexts (economic cycle with Zakat and economic cycle without Zakat).

Keywords:
Economic cycle Islamic Economic Islamic Finance principles products Zakat

This work is licensed under a Creative Commons Attribution 4.0 International License. To view a copy of this license, visit http://creativecommons.org/licenses/by/4.0/

References:

[1]	Mawdudi, A.A. (1941). Economic System of Islam, 4th end, edited by khurshid Ahmad, English translation by Riaz Husain, Lahore: Islamic Publications.
[2]	Sayyid Qutb (9 October 1906-29 August 1966) was an Egyptian author, educator, Islamic theorist, poet, and the leading member of the Egyptian Muslim Brotherhood in the 1950s and 1960s.
[3]	Al-Sader, M. B. (1973). Iqtisaduna. Beyrouth, Dar al-Fikr.
[4]	El Qorchi, M. (2005).Islamic Finance Gears Up. Finance Development IMF magazine.
[5]	Iqba, Z. Munawar, A., and Molyneux, Ph.(2005). Thirty Years of Islamic Banking: History, Performance and Prospects. 34-35, Palgrave Macmillan, UK.
[6]	Bakar, N., and Rahman, A. A Comparative Study of Zakah and Modern Taxation. J.KAU: Islamic Econ 20: 25-40.
[7]	Bendjilali, B. (1997). La Zakat et le waqf: aspect historique, juridique, institutionnels et économique. Séminaire tenu Benin, du 25 au 31 mai 1997.
[8]	Abdulkader, R. & Wahid, H. (2010). Localization of Malaysian Zakah distribution, Perceptions of Amil and Zakah recipients. A paper presented at the seventh International Conference-The Tawhidi Epistemology: Zakah and waqf economy, Bangi, 2010.
[9]	Abdul Wahab, N. & Abdul Rahman, A. (2013). Determinants of efficiency of Zakah institutions in Malaysia: Anon parametric Approach. Published in Asian journal of business and accounting.
[10]	Hairunnizam, W., Sanep, A., & Radiah, A. K. (2012). Melokalisasikan urus tadbir pengagihan zakat: Peranan institusi masjid di Malaysia Asian Journal of Accounting and Governance, 3, 71-83.
[11]	Schumpeter, j. (1942).Capitalisme, socialisme et démocratie. La doctrine marxiste; le capitalisme peut-il survivre? Le socialisme peut-il fonctionner? Socialisme et démocratie. Capitalisme, socialisme et démocratie. Réalisée par Jean-Marie Tremblay, Cégep de Chicoutimi.
[12]	Marx, K. and Engels, F. (1976) «Critique de l'éducation et de l'enseignement”, Introduction, traduction et notes de Roger Dangeville, Un document produit en version numérique par Mme Marcelle Bergeron, École Dominique-Racine de Chicoutimi, Québec.
[13]	Al-Omar, F. and Mohammed A. (1996). Islamic Banking: Theory, Practice & Challenges. Zed Books Ltd, UK.
[14]	Norazlina, A.W. and Abdul Rahim, A. R. (2011). A framework to analyze the efficiency and governance of zakat institutions. Journal of Islamic Accounting and Business Research, 2 (1), 43-62.
[15]	Diabi, A. (1993). The Concept of Zakah Evasion: An Economic Interpretation”, Review of Islamic Economics, Leicester (U.K.), Vol. 2, No. 2, pp. 17-28.
[16]	Hairunnizam, W., and Radiah, A., K. (2010). Localization of Malaysian zakat distribution: perception of amil and zakat recipients. Proceedings of Seventh International Conference-The Tawhidi Epistemology: Zakat and Waqf Economy.