Issues and Challenges in Using Zakat for The Development of Micro Takaful

Abstract

Micro Takaful is an affordable takaful that targets the poor in efforts to help them obtain protection for themselves and their family. The National Bank of Malaysia or Bank Negara Malaysia (BNM), encourages the takaful industry to provide micro takaful products for the targeted group. However, micro takaful is still at a minimum because the poor cannot consistently pay their monthly contributions due to financial difficulties. This study intended to explain the issues and challenges of using zakat as a micro takaful development fund. This qualitative study used the interview method comprising semi-structured questions for collecting data from three institutions, namely Syarikat Takaful Malaysia Keluarga Berhad, Mufti’s Office, Federal Territory Islamic Religious Council and Mufti’s Office, Selangor Islamic Religious Council. Findings show that there are two categories of issues and challenges, namely from the Islamic law aspect and the implementation of zakat as a source of fund for micro takaful.