Through Islamic Banks’ Zakat House (IBZH): Investment of Zakah Funds in Microfinance to Remove Poverty in Bangladesh: A New Model

Year 2016, Volume: 2 Issue: 1, 1 - 25, 01.03.2016

Ahm Ershad Uddın

Abstract

One of Zakat’s main objectives is to help eliminate poverty and famine. And in
Shari’ah, the obligation of zakat payment is elaborated which if not maintained
holds severe consequences. Zakat has its unique features of supporting the poor in
providing a collateral free financial stability. The main socioeconomic factors in all
the developing Muslim countries are poverty, unemployment and economic
inequality which results in not meeting the basic needs of the poor. In a country like
Bangladesh consisting of Muslim Majority, although governmental and nongovernmental
institutions collect and distribute zakat yet the ultimate goal of zakat
is not attained completely. At present, modern Islamic jurists reinforce the notion of
microfinance investment through the collection and usage of zakat money. This
paper consists of a static ground for the poverty removal creating a financial
institution which is equally responsible as those present in Bangladesh but with a
different route in eliminating poverty where schemes can be initiated along with
opening opportunities of employment. Finally, it also surfaces the model in
investment of zakat fund through IBZH with opinions of Islamic jurists. This
Islamic Banks Zakah House (IBZH) is an amalgamated forum of the present eight
established private Islamic banks of Bangladesh

Keywords

Islamic Banks’ Zakat House (IBZH), Microfinance, Bangladesh