Trust towards zakat institutions among muslims business owners

Abstract

Society nowadays are aware on the immediate need of financial assistance to the poor and triggered the problem of direct payment of zakat to the eligible party. However, this practice may be ineffective as it will create bias on zakat distribution and zakat payment through zakat institution is encourage. In order to achieve this practice, zakat payers' trust in zakat institutions must be cultivated and maintained. This study examined the antecedents of zakat payers' trust among Muslim business owners based on three factors were which are board capital composition, disclosure practice and stakeholder management. This research employed quantitative research whereby 97 questionnaires among business owners were collected and analysed using multiple regression analysis. The finding revealed that disclosure practice and stakeholder management have a significant relationship with trust. This indicates that zakat institutions are urged to be transparent in their management especially in terms of financial disclosure to their stakeholder.