Assessing the role of zakat institutions in the socio-economic sustainability of the poor and destitute in Malaysia

Purpose This study examines how the socio-economic programs of zakat institutions (ZIs) contribute to the sustainability of the poor and destitute in Malaysia. Design/methodology/approach The study involved 352 participants, who were analyzed using partial least squares (PLS-SEM) regression. Respondents were selected from urban areas, located in the Federal Territories of Malaysia. Findings The study revealed several significant findings: First, ZIs do not directly affect the level of sustainability of zakat recipients. Second, ZIs can enhance the sustainability of their recipients by empowering economic progress among beneficiaries. The disbursement of zakat-related economic activities is significant in sustaining its beneficiaries and potentially improving overall socio-economic development, especially in the aftermath of the COVID-19 pandemic. Additionally, the study suggests that strategic interventions by ZIs can lead to increased resilience and better life outcomes for those receiving zakat, ultimately contributing to a more sustainable community. Originality/value The previous COVID-19 pandemic severely affected the well-being of the poor and needy in Malaysia, as well as the livelihood of zakat recipients. To minimize its effect, researchers and policymakers emphasize the role of ZIs as crucial mechanisms for sustainability-based empowering instruments, emphasizing their role beyond traditional charity to sustainable support. However, there is little empirical research on how ZIs empowered the sustainability, well-being and livelihood of their beneficiaries in the context of Malaysia. Therefore, the results of the study will provide a new perspective for policymakers to formulate and re-strategize better policy frameworks for zakat empowerment development programs.