An Analysis on the Impact of Zakah Programs In Poverty Alleviation: Case Study in Bandung, Indonesia

The condition of zakah in Indonesia has become increasingly arising which is marked by changes of paradigm on zakah management. Formerly it was based on individual-traditional approach, but then it moved more on collective-professional approach. This is indicated by the emerging of many zakah-managing organizations that are more professional and offer creative programs. This has positive impact towards the improvement of the Indonesian economy. At the least, appropriate zakah allocation in the certain programs may significantly have impact on the increase of the Mustahiq’s Marginal Propensity to Consume (MPC) and also increase the producer’s production rate. In macro level, it will also impact on the increase of Third Party Fund in banks. This paper will explain how zakah, with professional management, may fulfill the three aspects as mentioned above and hence the three will gradually alleviate poverty. Specifically, this paper limits the scope of research to only several programs of certain zakah-managing institutions that operate in Bandung, West Java, Indonesia. The method using in this paper is descriptive analysis regarding to the programs of zakah-managing institutions that have and have not been implemented. The analysis has reached to a conclusion that the programs can realize the increase of Mustahiq’s MPC thus converting them to become Muzakki, boost the producers’ level of production, and improve the balance of bank customers’ savings.