Exploring the potential of using the zakat fund in structuring Islamic micro takaful

• Main Authors: Zakariyah, Habeebullah, Al-Own, Ahmad Abdulla O M, Ahmad, Altaf
• Format: Conference or Workshop Item
• Language: English; English
• Published: 2021
• Subjects: HG Finance; HG3368 Islamic Banking and Finance; HG8719 Islamic Insurance Takaful
• Online Access: http://irep.iium.edu.my/93744/2/156.pdf; http://irep.iium.edu.my/93744/8/93744_Exploring%20the%20Potential%20of%20Using%20the%20Zakat%20Fund.pdf; http://irep.iium.edu.my/93744/

Takaful is considered as one of the leading sectors in Islamic financial institution in the recent times as it has received wide acceptance among Islamic financial institutions. This paper addresses the Shariah issues related to Takaful industry. Muslim jurists argue that Takaful is under Tabaru` contract, this paves the way for many Shariah issues in the contract. This paper attempt to introduce Zakat fund for micro-Takaful. This study analyzed 2 major shariah issues: the first of which is permissibility of prosponing the distribution of zakat fund to the poor and needy. The second: the possibility of taking from the Zakat Fund to establish the Takaful fund. This study adopts inductive approach and the critical analytical approach explore the extent to which the Zakat Fund can be used to establish micro- takaful fund. The study concluded that there is no Shariah objection to the use of the Zakat Fund for micro-Takaful. The research recommends the relevant authorities and institutions to set a framework within which this structure can be applied in contemporary reality.