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: Springer Science and Business Media Deutschland GmbH 2022
• Subjects: BPH531 Zakat; HG8719 Islamic Insurance Takaful
• Online Access: http://irep.iium.edu.my/99754/2/99754_Exploring%20the%20potential%20of%20using%20the%20zakat%20fund.pdf; http://irep.iium.edu.my/99754/3/99754_Exploring%20the%20potential%20of%20using%20the%20zakat%20fund_Scopus.pdf; http://irep.iium.edu.my/99754/; https://link.springer.com/chapter/10.1007/978-3-031-08090-6_6

Takaful is 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 possibility of using Zakat fund to establish micro-Takaful. Contemporary Muslim jurists opined that Takaful is based on Tabarù contract. This study analyzed two major shariah issues: the first of which is permissibility of delaying the distribution of zakat fund to the recipients (Asnaf ). The second: the possibility of taking from the Zakat Fund to establish the microTakaful fund for the recipients. This study adopts inductive and critical analytical approach to explore whether Zakat Fund can be used to establish micro- takaful fund. The study concluded that there is no Shariah issue in utilization of Zakat Fund for micro-Takaful in so far it is dedicated and exclusively for the Zakat recipients (Asnaf ). The research recommends the relevant authorities and institutions to set a framework within which this structure can be applied in contemporary time.