More than a thousand years ago, a social security system was introduced to a semi barbaric desert-faring nation. Firstly out of their barbaric nature they refused to accept it, but when they opened their heart and started to practice it, it transformed their war torn society into one of the most civilised and powerful nations of the world. By implementing the divine teachings of zakat from the Holy Quran and the hadiths of Prophet Muhammad (Peace be Upon Him), the warring tribes of Arabia became the strongest economy of that time which conquered the world from Java to Spain.
Renowned Islamic scholar Sheikh Dr Towfique Chowdhury presented the theme of zakat through his keynote speech in Zakat Fair 2014. Photo: CZM
Zakat, introduced in the holy Quran, for the first time brought in the concept of asset transfer to alleviate poverty. By the principles of zakat, an eligible, well off man who possesses wealth more than a threshold figure termed as nisab for a total lunar year, is liable to pay 2.5 percent of that additional wealth as zakat. For an individual the nisab by the gold standard is three ounces of gold (87.48 grammes) or its cash equivalent and by the silver standard is 21 ounces of silver (612.36 grammes) or its equivalent in cash. Similarly business organisations have their own zakat depending on their accumulated property.
In the holy Quran, it has also been clearly defined who can receive the payments of zakat. But the way zakat is paid in the country has left much to be desired. Take Taslima, who lives in Rayer Bazaar slum. She tells her how she had lost her one-year-old baby.
She says, “A rich man in Jigatola used to give some clothes to the poor as zakat. Before giving those clothes that man made a public announcement that he would give the clothes the next day. When I went to get the clothes, I saw a queue of thousands of recipients like me. Soon, that man's stockpile of cheap clothes wore out, leaving hundreds of deprived people including me. But the people did not want to leave the spot without getting something. Then suddenly some thugs started to beat the waiting people up to clear the crowd which resulted in a stampede. My one-year-old daughter was in my lap and suddenly she fell off my hands. I could not save her; I had lost her forever.”
With the collected zakat CZM also ensures education and nutrition for the poor and destitute children. Photo Courtesy: CZM
Dr Manzoor E Elahi, an Islamic scholar and professor of National University, says, “Donating cheap clothes to the poor is a defamation of zakat. Announcing beforehand to give zakat is a despicable task. It is not a charity, zakat is actually the wealth of the poor that has been tagged with the assets of a rich man. So giving zakat is actually ensuring a poor man's right. It should be given in such a way that can free a person from the trap of poverty.”
In Bangladesh we have an example where zakat is being utilised as an instrument of poverty alleviation in a sustainable way. Niaz Rahim, the group director of Rahimafrooz, one of the key business conglomerates of Bangladesh, first thought of a plan to utilise his company's huge business zakat to bring about some positive change. He also shared his ideas with some other industrialists like Salahuddin Kasem Khan of AK Khan Foundation who welcomed his idea.
Niaz Rahim, the Chairman of CZM, first introduced the institutionalized approach of zakat collection and management system for poverty alleviation. Photo: Prabir Das
Thus the first independent zakat collection and management organisation called Centre for Zakat Management (CZM) was formed in Bangladesh. Rahim says, “A few businessmen used to practice business zakat on their own. But big corporate houses produce a huge amount of zakat fund which if utilised can contribute a lot to the society. The goal of the CZM is to collect zakat from businessmen and also from the eligible individuals and utilise it collectively to bring about a sustainable change by alleviating poverty.”
After its inception in 2008 CZM has been running many development programmes that are run by the collected zakat funds. Some programmes have been ensuring sustainable livelihood (called Jeebika), some have been ensuring funds for the education of poor students (named Genius), some programmes have been ensuring pre primary education and nutrition for poor children (called Gulbagicha) and some have been aimed at financially empowering rural and destitute women. The CZM is running zakat consultation centre in its office to motivate people about the true concept of zakat.
One of the projects of Jeebika has been implemented at a village called Mohora in Chittagong district. Most of the villagers are fisherman or bamboo craftsman who had to borrow money from local NGOs or borrow fishing equipment from the usurers with high interest. Even according to the loan contract they had to sell their catch at nominal prices to those Shylocks. The workers of the CZM with the zakat fund of AK Khan Foundation made a revolutionary change in the village with their Jeebika programme. Eminent economist and researcher Dr Hossain Zillur Rahman, has studied the programme in Mohora village and the potential of zakat for poverty alleviation.
Dr Rahman says about the project, “While working in the project I have discovered that zakat is an effective instrument for poverty alleviation. All the 450 families, including the Hindus of the village have been included in the project. These families were divided into a group of 30 people. Each group has been provided with Tk 600,000 that is Tk 20,000 per family. Each group collectively maintains their revolving fund of Tk 600,000. By utilising this collective fund, these poor villagers have been running their independent business on their own without thinking of repaying the loans with high interest.”
Salahuddin Kasem Khan; with zakat from his AK Khan Foundation has set models for the proper utilization of business zakat. Photo: Prabir Das
This concept of collective revolving fund is very innovative and quiet similar to social business. A group member, Abdus Salam shares his experience, “From our fund of Tk 600,000 I have drawn Tk 40,000 for my business. I invest it in my business and share 10 percent of my profit with our collective fund which is actually ours. When all the 30 members of our group share their profit, the fund increases and we share it equally among ourselves. If anyone suffers loss in his/her business he/she can take money from the fund as the fund has been increased. Here we have our own capital and we manage it on our own. We don't need to borrow money anymore.”
Before giving this amount the members of these families were trained by CZM workers so that they can understand the programme's activities. Mia Muhammad Ayub, the General Manager of the CZM says, “We don't interfere with what these beneficiaries do with their zakat money. Zakat money is their right. What we do is provide them some skill development training. Furthermore we provide support to those families to manage the revolving funds to ensure continuity and sustainability of the programme.”
According to the findings of Dr Rahman the villagers have progressed significantly. Dr Rahman says, “A family who used to earn Tk 7,000 per month, now can earn Tk 13,000. Their household economy has improved a lot. They are earning more and they are consuming more which indicates that they have been financially empowered through this programme. An amazing result of the project is these poor villagers who were once trapped by loans thanks to different NGOs, now have been freed from all sorts of debt. By utilising zakat, these villagers themselves have been successfully fighting poverty. The initial fund has also increased. Primarily 9 million taka was provided to 450 families then after three years with the profit of the beneficiaries the total fund has been increased up to 1.38 crores.”
Dr Hossain Zillur Rahman thinks zakat as an effective and potential instrument for poverty alleviation in a sustainable way. Photo: Prabir Das
The CZM runs many programmes like these all over the country. But the potential resource of zakat is huge in Bangladesh which is very difficult to manage by only one single organisation. According to a research done by Islamic Relief Worldwide, each year 25,000 crore BDT of zakat can be obtained from Bangladesh and if distributed properly each extremely poor family can get two million taka from this huge fund. So along with CZM, many more organisations especially the government should come forward to utilise the zakat's huge potential.
Eminent industrialist Salahuddin Kasem Khan, the trusty secretary of AK Khan Foundation says, “CZM has been doing an exemplary job by introducing the true aspect of zakat. But this effort has to be decentralised. I have suggested disseminating the activities of CZM to the district, upazila and right to the ward level. Even by following the structure and strategy of the CZM many other organisations can be formed to utilise the huge potential of zakat. I have talked to our Finance Minister about the potential of zakat. He is also very interested to work on it. Many corporate houses are also very interested to pay their business zakat. For working with zakat we also need the support and supervision from the government so that zakat funds cannot be used in non-zakat ways.”
In the projects of CZM zakat money has been invested in income generating activities to break the poverty cycle. Photo Courtesy: CZM
Khan's thought on the proper usage of zakat is very valid. Collection of zakat and distributing it to the deserving needy people depends highly on trust. Dr Hossain Zillur Rahman says in this regard, “Ensuring transparency is vital for zakat management activities. While working with Jeebika project I have seen that the activities of CZM is quite transparent and trustworthy. They have accurately distributed the zakat fund to the villagers. And from the total budget of CZM they have been spending 23 percent of the total budget for their own expenditure and the remaining 77 percent have been ensured for the beneficiaries. But for most of the organisations the calculation is just the opposite. Continuation of this trust is very important to scale up the development activities with zakat.”
Organisations like CZM have set an example of how we can utilise zakat to transform our poverty-ridder society into a self sufficient and financially empowered one. To popularise this concept, some eminent corporate houses and the CZM arranged a zakat fair in Dhaka where scholars, economists and businessmen expressed their concerns on zakat. Prominent Islamic scholar Sheikh Toufiq says, “Zakat is obligatory for every eligible Muslim. Those who don't pay zakat have been considered as non Muslim by the disciples of the prophet Muhammad (Peace be Upon Him). But paying zakat to make sustainable change in the society is its true theme. We must remember this theme while practicing it otherwise our practice may go in vain.”
For a country like Bangladesh zakat is an opportunity, a possibility to break free from the vicious cycle of poverty. Bangladesh will not remain a poor country anymore, if we give zakat in such a way as to ensure the livelihood of at least one person.
Ensuring the right to zakat removes the darkness of poverty by transferring assets from the rich to the poor. Photo Courtesy: CZM
The writer can be contacted at firstname.lastname@example.org