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Zakat as an Instrument for Alleviating Poverty and Income Gap Ahmad Rifa’i; Abdullah; Mahatir Muhammad Sidebang
Journal of Global Islamic Economic Studies Vol. 2 No. 1 (2024): Journal of Global Islamic Economic Studies
Publisher : Penerbit Merdeka Kreasi

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Abstract

Zakat is one of the important instruments in the Islamic economic system that has a social and economic function in realizing fair distribution and community welfare. In the midst of increasing poverty and income inequality, especially in developing countries such as Indonesia, optimizing the role of zakat is very relevant and urgent. This study aims to examine the extent to which zakat plays an effective instrument in alleviating poverty and reducing income gaps, as well as how the zakat management mechanism can be improved to be more productive and have a long-term impact. This study uses a descriptive qualitative approach with interview, observation, and documentation methods of zakat institutions, mustahik, and Islamic economic experts. The results of the study show that productive zakat, if managed in a targeted and accountable manner, can encourage the empowerment of mustahik economies and increase their income significantly. In addition, zakat is also able to reduce the accumulation of wealth in the hands of a few people and create a fairer distribution of income. The main obstacles lie in weak governance, lack of zakat literacy, and the lack of a national integration system based on mustahik and muzakki data. The novelty of this research lies in the integrative approach of zakat as an alternative economic policy that is not only spiritually based, but also able to synergize with national development strategies in overcoming poverty and inequality. With modern and transparent zakat management, zakat has the potential to become an applicable Islamic economic solution.
AN INTEREST-FREE ECONOMY: ADDRESSING THE CHALLENGES OF THE TIMES AMID THE RISE OF ONLINE LENDING AND HIGH INTEREST RATES Nur Rahmad Iqbal; Mahatir Muhammad Sidebang; Kemal Muhammad Afif
International Conference on Health Science, Green Economics, Educational Review and Technology Vol. 5 No. 1: IHERT (2023) FIRST ISSUE: International Conference on Health Science, Green Economics,
Publisher : Universitas Efarina

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.54443/ihert.v5i1.468

Abstract

The widespread emergence of high-interest online lending (commonly known as pinjol in Indonesia) has raised significant economic, social, and spiritual concerns within society. Conventional financial systems, which are fundamentally based on interest (riba), are increasingly seen as contributors to economic injustice, social disparity, and structural exploitation, particularly among vulnerable groups. This paper examines the Islamic economic system as a comprehensive and value-based alternative to build a riba-free economy that is just, inclusive, and sustainable. Using a qualitative-descriptive approach, the study explores core Islamic principles such as ‘adl (justice), amanah (trust), maslahah (public welfare), and the prohibition of riba, positioning them as essential foundations for responding to the contemporary financial crisis driven by consumerism and digital debt traps. Furthermore, the research analyzes the mechanisms of pinjol operations, the socio- economic impacts on low-income communities, and proposes practical strategies to strengthen Sharia-compliant financial systems through technological innovation and financial literacy campaigns. The findings suggest that the implementation of a riba-free economic model is not only feasible but urgently necessary in today’s digital era. By reorienting financial behavior toward ethical and spiritually conscious values, the Islamic economic system offers a transformative framework capable of addressing the root causes of financial injustice and promoting holistic well-being