FACTORS INFLUENCING INDIVIDUAL PARTICIPATION IN ZAKAT CONTRIBUTION: EXPLORATORY INVESTIGATION

Abstract

Zakat is one of the sources of funds available within the Islamic economic and financial systems and has become a part of ijtima’i studies. Although it is obligatory for Muslims to contribute to zakat, however the amount collected is relatively very small compared to the income tax collections. One of the reasons that led to this incident could be the lack of motivation among Muslims. The aim of this study is to investigate the factors affecting individual decisions in zakat contribution hence, provide an understanding of their motivation. In this exploratory study, factor analysis has been used to provide insights into the underlying structure of motivating factors of individuals participating in zakat. Data was collected using a survey questionnaire that was designed based on past studies from both the conventional as well as Islamic literature. The main dimensions were characterised by religious, utilitarian, self satisfaction and organization factors. In the analysis, the factor extraction method used was the principal component method with the Varimax rotation. Principal factor analyses identified five factors that explained 67.32 percent of the variance in the dataset and these were the “altruism”, “level of faith”, “self-satisfaction”, “organization”, and “utilitarian” factors. Further analysis indicates that the “altruism” has the highest score followed by faith (iman), self satisfaction, organization, and utilitarian factors. Based on the sample surveyed, the initial findings indicate that participation in zakat is not only motivated by religious factor but also self-satisfaction and organizational factors. The implication is that the efforts to raise the level of zakat activities should emphasise not only the religious aspect but also the individual’s and organizational dimensions. This may have significant impacts on the personal financial planning and development of Islamic economic systems in general.

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