An appraisal on the business success of entrepreneurial asnaf: An empirical study on the state zakat organization (the Selangor Zakat Board or Lembaga Zakat Selangor) in Malaysia

Abstract

Purpose

The purpose of this paper is to evaluate and measure the business model of the state welfare organization in assisting and ensuring the business success of its entrepreneurs or zakat recipients.

Design/methodology/approach

A survey was employed to obtain feedback from the recipients of zakat for small businesses under the scheme of entrepreneurial asnaf zakat.

Findings

The respondents, in general, agree that the variables for the study – capital, courses or training and knowledge or know‐how – are important to them in helping the zakat recipients to succeed in their businesses, which then translates into a better standard of living. Positive correlation is shown for the three variables in determining the success rate of the programme and regression analysis shows that only capital and an asnaf's knowledge is significant in determining an asnaf's entrepreneurial success, which leaves training as insignificant.

Research limitations/implications

This paper explores the other side of zakat distribution, in the sense that many studies focus on the distribution of zakat collection from the zakat payers to the asnaf whereby the distinction of this study is that it evaluates the asnaf that want to transform their condition through the entrepreneurial asnaf programme. This is rarely investigated due to the lack of a similar programme in other places, even within Malaysia. The limitation for the study is in terms of solid support from the respective parties. This includes the management of Lembaga Zakat Selangor, due to the bureaucratic process, albeit understandable, to protect certain confidential information, and also unfavourable respondents' attitude when being questioned, which is a normal phenomenon in survey study.

Practical implications

This paper provides insights into the implementation of entrepreneurial zakat, which can be emulated by other zakat collection agencies to develop similar or better innovative programmes for the benefit of the community.

Originality/value

This paper is unique since the feedback is given by the entrepreneurs who receive financial assistance from the state zakat organization in Malaysia, which means the information is derived from the original source. The findings provide good information for practitioners as well as for academicians and students.

Citation

Afif Muhamat, A., Jaafar, N., Emrie Rosly, H. and Abdul Manan, H. (2013), "An appraisal on the business success of entrepreneurial asnaf: An empirical study on the state zakat organization (the Selangor Zakat Board or Lembaga Zakat Selangor) in Malaysia", Journal of Financial Reporting and Accounting, Vol. 11 No. 1, pp. 51-63. https://doi.org/10.1108/JFRA-03-2013-0012