Zakat Distribution, Financial Technology and Transparency in Nigeria


Sunday, August 15, 2021 / 12:05 PM / Bukola Akinyele-Yisau for WebTV / Header Image Credit: PENzIT


Financial technology, Zakat and transparency are critical for economic growth. Zakat is an obligatory payment for Muslims based on income and the value of possessions. The standard minimum amount for those who qualify is 2.5% of a Muslim's total savings and wealth.


The goal of financial services being available through digital platforms is to contribute to eradicating poverty and accelerating economic growth in developing countries.


The adoption of financial technology can help accelerate the disbursement of Zakat funds.


How is this being executed in most countries with Zakat foundations, agencies, institutions, or organizations?


A recent webinar organized by the World Zakat Forum, which discussed "Zakat in The Modern Day of Muslim Lifestyle", showed that most Zakat agencies operate traditionally.

Proshare Nigeria Pvt. Ltd.


According to the head of the World Zakat Youth Forum, Mr. Azim Kidwai, the contribution of Zakat during COVID-19 has been substantially crucial in the community. It is specifically essential to understand the global phenomenon of Zakat. 

COVID-19 has made Muslims more conscious of their religion and the contribution of Zakat in a community; he said there had been a phenomenon in contribution on both the supply and the demand side.

According to him, there has been a vast increase in demand and the biggest benefactor of the COVID-19 induced crisis is "Amazon", which is because people were at home and carried out online transactions.

This is because there are commercial opportunities for people to set up amazon businesses even at home. This has also been recently explored on how to use Zakat from an enterprise perspective to support entrepreneurs.

He said the lifestyle has changed as people now have more godly consciousness and appreciate the pillar of Zakat, when the need comes from it. The Islamic spirit and exercise are also being explored using Zakat.

From the Nigerian perspective, Dr. Aliyu Dahiru Muhammad, of the World Zakat Research and Development Forum speaking on the contribution of Zakat in the Muslim community in Nigeria, said Zakat is the 3rd pillar in Islam and is the mainstay of the Muslim economy. This therefore states the importance of Zakat cannot be over-emphasized.

In Nigeria, he believed that COVID-19 allows repositioning Zakat in the country and before the pandemic, there were Muslim organizations that are operating institutions or agencies to see that people are paying Zakat.

On the types of Zakat Organizations in Nigeria, he mentioned the following;

  1. State-based Zakat- After the introduction of Shariah, Zamfara started Zakat, Sokoto, Kano, Jigawa, Bauchi and Lagos all have state-based Zakat agencies
  2. Foundation-based Zakat- An instance is Jaiz Bank, a non-interest bank that collects Zakat and distributes it.
  3. Emirate-based  Zakat- This means the Emir and leader of the emirate is the head of the Zakat fund and shares it. They are also individual-based payment of Zakat where the person distributes the Zakat himself without having any intermediary.  He noted that Zakat is taken from the rich and transferred to the poor. 

According to him, middle-income earners hugely contribute to the success of Zakat in a country.

Proshare Nigeria Pvt. Ltd. 

On the side of how young people in the Muslim community knows the importance/obligation of paying Zakat, Aliyu believed in Nigeria the level of education and awareness made young Muslims waqf ambassadors and zakat foundations.

The younger generation in Nigeria have a keen interest in learning and paying Zakat, and he called on them to do more as the country has a sizeable Muslim population.

On the need for digital transformation in paying Zakat and creating awareness. Aliyu said Nigeria adopted digitization, especially those coming from the foundation.

According to him, the NGO's Zakat in Nigeria developed an application where individuals can pay Zakat. He cited Sokoto state-based Zakat, Jaiz Zakat and Sadaqah foundation as institutions leveraging technology to pay Zakat in Nigeria. 

Dr. Muhammed said Zakat needs more attention in society and called on the Muslim leadership and influencers in society to make a good policy that will favour them in society and educate the young generation in a formal education system.

The webinar was moderated by Mr. Fahmi Ali Hudaefi MSh, Fin- Senior Researcher at BAZNAS Center of Strategic Studies.  


Who can we give Zakat to? as determined by the Holy Qu'ran:  

  1. The poor
  2. The needy
  3. Travellers in need
  4. Those in debt
  5. Those being held against their will or in slavery
  6. New Muslims and friends of the Islamic community
  7. Those in the cause of Allah
  8. Administrators of Zakat 


Zakat can be paid monthly or yearly by calculating your total income and divide it by 2.5%. For those who have outstanding, including any form of a loan are ineligible for Zakat, they must be deducted from the overall total before paying it.  

Proshare Nigeria Pvt. Ltd.

Related News  

1.      Understanding Zakat, Financial Inclusion and Economic Empowerment in Nigeria

2.     Zakat Distribution as A Stabilizer During COVID-19 Pandemic

3.   COVID-19: How Islamic Finance Supports the Economy Through Waqf Crowd Funding - Dr Aliyu Dahiru

4.     How Leveraging The Waqf Institution Supports Economic Growth - Norfadalizan AbdulRahmon 

5.     UNHCR To Expand Zakat Fund To Support IDPs In Nigeria

6.     Over 1 Million People Benefit from Refugee Zakat Fund - UNHCR

7.     Zakat Commission Assists Widows In Kano


 Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.

Related News