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ORIGINAL ARTICLE NORTH ASIAN INTERNATIONAL RESEARCH JOURNAL CONSORTIUM North Asian International Journal of Banking and Finance Chief Editor Dr. Nisar Hussain Malik Publisher Associate Editor Dr. Bilal Ahmad Malik Dr.Nagendra Mani Trapathi Honorary Dr. Ashak Hussain Malik Volume 2, Issue 5 May 2016 ISSN NO: 2454 - 2326 North Asian International Research Journal Consortium North Asian International Research Journal Of Multidisciplinary Chief Editor Dr. Nisar Hussain Malik Publisher Associate Editor Dr. Bilal Ahmad Malik Dr.Nagendra Mani Trapathi Honorary Dr.Ashak Hussain Malik North Asian International Research Journal of Multidisciplinary ISSN: 2454 - 2326 Vol. 2, Issue 5 May 2016 IRJIF IMPACT FACTOR: 3.52

North Asian International research Journal consortium www.nairjc.com 2 Welcome to NAIRJC ISSN NO: 2454 - 2326 North Asian International Research Journal is a multidisciplinary research journal, published monthly in English, Hindi, Urdu all research papers submitted to the journal will be double-blind peer reviewed referred by members of the editorial board. Readers will include investigator in Universities, Research Institutes Government and Industry with research interest in the general subjects Editorial Board J.Anil Kumar Head Geography University of Thirvanathpuram Sanjuket Das Head Economics Samplpur University Adgaonkar Ganesh Dept. of Commerce, B.S.A.U

Aruganbad Kiran Mishra Dept. of Engligh,Ranchi University, Jharkhand Somanath Reddy Dept. of Social Work, Gulbarga University. Rajpal Choudhary Dept. Govt. Engg. College Bikaner Rajasthan R.D. Sharma Head Commerce & Management Jammu University R.P. Pandday Head Education Dr. C.V.Raman University Moinuddin Khan Dept. of Botany SinghaniyaUniversity Rajasthan. Manish Mishra Dept. of Engg, United College Ald.UPTU Lucknow K.M Bhandarkar Praful Patel College of Education, Gondia Ravi Kumar Pandey Director, H.I.M.T, Allahabad Tihar Pandit Dept. of Environmental Science, University of Kashmir.

Simnani Dept. of Political Science, Govt. Degree College Pulwama, University of Kashmir. Ashok D. Wagh Head PG. Dept. of Accountancy, B.N.N.College, Bhiwandi, Thane, Maharashtra. Neelam Yaday Head Exam. Mat.K..M .Patel College Thakurli (E), Thane, Maharashtra Nisar Hussain Dept. of Medicine A.I. Medical College (U.P) Kanpur University M.C.P. Singh Head Information Technology Dr C.V. Rama University Ashak Husssain Head Pol-Science G.B, PG College Ald. Kanpur University Khagendra Nath Sethi Head Dept. of History Sambalpur University. Rama Singh Dept. of Political Science A.K.D College, Ald.University of Allahabad Address: - Dr. Ashak Hussain Malik House No. 221 Gangoo, Pulwama, Jammu and Kashmir, India - 192301, Cell: 09086405302, 09906662570, Ph.

No: 01933-212815, Email: [email protected], [email protected] Website: www.nairjc.com North Asian International Research Journal of Multidisciplinary ISSN: 2454 - 2326 Vol. 2, Issue 5 May 2016 IRJIF IMPACT FACTOR: 3.52 North Asian International research Journal consortium www.nairjc.com 3 PRODUCTIVE AND DISTRIBUTION ZAKAT EFFECTIVENESS IN POVERTY REDUCTION WAHYUDIN MAGUNI & HUSAIN INSAWAN Lecturer at the Faculty of Economics and Business Sharia (FEBIS), IAIN Kendari ABSTRACT One way to overcome poverty is the support of people who are able to expend their wealth in the form of zakat to the needy.

Zakat is one of the five strategic and instrumental values greatly affect the economic behavior of human and community and economic development in general. Zakat can serve as a source of socio-economic fund for Muslims. This means that utilization of zakat which is managed by BAZ is not only limited to certain activities are based on the conventional orientation, but can also be used for the economic activities of the people, such as poverty reduction and unemployment by providing productive zakat to those who require as venture capital.

PRELIMINARY Poverty is a great danger for humanity and not a few people who fall civilization only because of indigence. Because it was like the Prophet stated that poverty was close to the kuffar. Islam as Ad-din has offered some human doctrine for universally applicable two-dimensional characteristics, namely the happiness and welfare of the world as well as happiness and prosperity in the afterlife.

One way to overcome poverty is the support of people who are able to expend their wealth in the form of zakat to the needy. Zakat is one of the five strategic and instrumental values greatly affect the economic behavior of human and community and economic development in general. The purpose of zakat is not merely sympathize poor consumptive, but has a more permanent goal is to eradicate poverty. One who supports the welfare of living in the world and supports the life in the Hereafter is the socio-economic welfare.

This is a set of alternatives for the welfare of Muslims from poverty and destitution. For it is necessary to establish Islamic social institutions in an effort to tackle social problems. In this connection, the charity can serve as a source of socio-economic fund for Muslims. This means that utilization of zakat which is managed by Badan Amil Zakat (BAZ) is not only limited to certain activities are North Asian International Research Journal of Multidisciplinary ISSN: 2454 - 2326 Vol. 2, Issue 5 May 2016 IRJIF IMPACT FACTOR: 3.52 North Asian International research Journal consortium www.nairjc.com 4 based on the conventional orientation, but can also be used for the economic activities of the people, such as poverty reduction and unemployment by providing productive zakat to those who require as venture capital. Zakat has a strategic role in the fight against poverty or economic development.

Unlike the financial resources for other development, zakat does not have a reverse impact whatsoever, except the pleasure and expecting reward from Allah SWT. However, that does not mean there is no mechanism zakat control system. The strategic value of zakat can be seen through: First, zakat is a religious calling. He is a reflection of one's faith. Second, financial resources zakat will never stop. This means that people, who pay the zakat, will never run out and that has paid every year or other period of time will continue pay.

Third, empirically zakat can remove social inequalities and vice versa can create asset redistribution and equitable development. That encourages people to implement Islamic zakat collection in Indonesia, among others: 1) The desire of Muslims Indonesia to perfect implementation religion. After establish the prayer, fasting during Ramadan and even pilgrimage to Mecca, Muslims are increasingly aware of the need for charity as a fulfillment of a religious duty; obligations that must be carried out by any person who is able to carry it out because it has met the conditions specified.

2) Increasing awareness among Muslims about the potential zakat if used well will be able to solve many social problems in Indonesia. 3) Efforts to realize the development and management of zakat in Indonesia increasingly growing and growing. Zakat is given to mustahiq will play a supportive economic improvement if they are consumed in productive activities. Productive utilization of zakat actually have the concept of careful planning and implementation such as reviewing the causes of poverty, absence of working capital, and the lack of employment, with the problem, the need for planning to develop the productive zakat.

Zakat development of productive manner maketh zakat as venture capital funds, for the economic empowerment of the recipient, and so the poor can run or finance life consistently. With the zakat fund the poor will get a steady income, improve their business, develop a business and they can set aside income to save. Zakat funds for productive activities will be optimized if implemented amil Zakat Institution for LAZ as a trusted organization for allocation, utilization, and distribution of zakat funds, they do not give zakat for granted, but they North Asian International Research Journal of Multidisciplinary ISSN: 2454 - 2326 Vol.

2, Issue 5 May 2016 IRJIF IMPACT FACTOR: 3.52 North Asian International research Journal consortium www.nairjc.com 5 accompany, providing guidance and training to charity funds are really used as working capital so that recipients earn a decent income and independent. Zakat is worship Maliyah ijtima'iyyah which has a very important position, strategic and decisive, both in terms of the teachings of Islam as well as in terms of human well development. Zakat is an Islamic foundation that serves to maintain the balance of life.

Islamic Shari'a derived as a means of creating economic justice, prosperity and welfare, as well as the instrument so that every Muslim is always of concern, considering the circumstances surrounding it. Presence becomes a pillar of the social infrastructure in shaping a harmonious society. In Indonesia, zakat management is governed by Act 38 of 1999. The management of zakat is essentially analogous to banking activities. Banks collect funds from their surplus funds and then distribute to those in need of these funds.

Of course, bank officials must ensure that the funds are distributed is successfully achieving its objectives, namely to increase the company's activities are given credit in particular and increase economic activity in general. Similarly zakat levied or collected from the Muslims who have been obliged to tithe is generally the rich, and then distributed to the poor, the poor and others who are entitled. In the distribution of amil Zakat should principled see to it that the alms distributed reach its goal, which is to increase the welfare of mankind.

Zakat management institutions either the new or the old stand generally have a working network. This network should be used as a mediator and operational support institutions, one of them in the field of monitoring so as to save on operating expenses and of course will affect the effectiveness of the distribution of zakat zakat particularly productive. One measure of the success of the distribution of zakat funds is the effectiveness of the utilization of zakat by mustahik measured with productive zakat funds collectibility.

In this case the necessary monitoring and coaching of the various parties, one of which is responsible in this case is zakat institution itself. However, given the region wide distribution of zakat funds, the amil zakat institutions difficulties in monitoring and guidance, so that the efficiency of the management of zakat funds is not measurable. By building a network, the Institute amil Zakat will be easier to perform its duties as manager at the same supervisor. North Asian International Research Journal of Multidisciplinary ISSN: 2454 - 2326 Vol. 2, Issue 5 May 2016 IRJIF IMPACT FACTOR: 3.52

North Asian International research Journal consortium www.nairjc.com 6 ZAKAT PRODUCTIVE Definition of zakat can be viewed from two aspects, namely by language and terms. In terms of language, zakat means to grow, clean, blessing, growing and well. While the terms of the term, Zakat means to issue a number of specific assets which are required by God to those who are entitled in addition to mean spending a certain amount itself.

Productive Zakat charity funds whose management is aimed at economic development, namely in order to increase income and economic independence mustahik. Zakat productive facilities are generally utilized in the form of new entrepreneurs, venture capital assistance, business assistance, strengthening network operations and ownership of capital assets by mustahik. The distribution pattern developed productive in general take qarul scheme hasan namely the form of a loan without any particular rate of return (return / profit sharing) of the loan principal.

However, if it is the borrower's funds are not able to repay the principal, and then the zakat law indicates that the borrower can not be prosecuted for the inability, because basically this fund is their right. ZAKAT MANAGEMENT ORGANIZATION At the time of the Prophet Muhammad, known as a body called Baitul Maal has the duties and functions of the state finances. Sources of revenues derived from zakat fund, donation, kharaj, jizya, ganimah, fa'i etc.

While its use for asnaf mustahik predetermined for the sake of propaganda, education, defense, social welfare, creation of infrastructure, etc. Baitul Maal institutions undergo considerable changes to the operation of the administrative system known as Zakat Management Organization (OPZ). The definition of zakat management according to Law No.38 of 1999 concerning the management of zakat is the planning, organizing, supervision of the collection, distribution and utilization of zakat.

OPZ existence in Indonesia is regulated by several laws and regulations, namely: Law No.38 of 1999 concerning the management of zakat, the Minister of Religion No. 581 of 1999 on the implementation of Law No.38 of 1999. And the decision of the Director General of the Islamic Community Guidance and Hajj Affairs No.D / 291 of 2000 on technical guidelines for the management of zakat. North Asian International Research Journal of Multidisciplinary ISSN: 2454 - 2326 Vol. 2, Issue 5 May 2016 IRJIF IMPACT FACTOR: 3.52 North Asian International research Journal consortium www.nairjc.com 7 THEORY NETWORK The success of an organization lies not in the ability of managers / administrators, but is determined by the magnitude of the work developed by network members. Without the network, is certainly a social institution will fail to guarantee its performance.

Making organizations or networks Network organization is a cooperative effort between two or more organizations in achieving the unification of adequacy of resources (resources), improve competitiveness, increase productivity and learning an organization from other organizations who are already advanced. Networking can be in the form of individual or institution. Every person, institution, agency social foundations, NGOs, the business community is a partner as well as a cooperation network member institutions.

Through these elements, then an institution can take part. The elements of a source of strength enormous support for an institution to strengthen their duties and functions. Therefore, developing a network of the work done can be horizontal, vertical or diagonal. Vertical networks are networks that work done between an agency with the Government and other institutions at the central and district / city.

Horizontal is a network which was built between agencies that have the same level and position. While the diagonal is a network built with different network levels sinergyze between both structure and function. As already understood, if the concept of zakat fiqh states that the zakat system trying to bring together Muslim surplus with the deficit Muslims, then the network Amil zakat institutions in every organization has its own data collection regarding the surpluses and deficits of its client.

The network system will facilitate each of the institutions to communicate and to exchange information properly. As a result, as proclaimed concept of jurisprudence, that the distribution of zakat funds adheres to local empowerment as a priority, meaning how the surplus in a region may distribute income to the deficit of Muslims in the area. If funds collected are still a surplus, then the funds are channeled to other areas. Such control is then held by an organization's network system. North Asian International Research Journal of Multidisciplinary ISSN: 2454 - 2326 Vol.

2, Issue 5 May 2016 IRJIF IMPACT FACTOR: 3.52 North Asian International research Journal consortium www.nairjc.com 8 THEORY EFFECTIVENESS Effectiveness is the degree to which actual performance (actual) is proportional to the targeted performance. Effectiveness can also mean the relationship between the output of the goal, where effectiveness is measured by how far the level of output or output, policies and procedures of the organization to achieve its intended purpose. Effectiveness is success in achieving the goals set earlier.

If the organization has achieved its objectives, then the organization is effective. An activity is said to be effective if the purpose of that activity can ultimately be achieved. But if the result is not sought from the activity has a value more important than the results achieved thus resulting dissatisfaction, although effective these activities can be said to be inefficient. Conversely if the result is not sought from the activities that have value is not important, then these activities efficiently.

In connection with that, we can say something effective when it reaches certain goals. Said to be efficient if it is satisfactory as the driving purpose, whether effective or not. Peter Drucker stated, "Effectiveness means how far we achieve the goal and efficiency means how we mix various resources properly". Effectiveness means the extent to which we achieve the targets and efficiency means how we mix carefully resources).

THE PURPOSE OF THE EFFECTIVENESS OF ZAKAT FUNDS ARE: 1. To measure how much zakat fund management is able to be collected and channeled (usefully be put) by Amil zakat institutions. 2. To determine the performance of amil zakat institutions by looking at the financial statements amil zakat institutions 3. To find out how much influence Amil zakat institutions to the economic recovery in Indonesia.

The study authors have ever encountered relating to zakat productive as a means of economic empowerment is the thesis Sheikh Muhammad Arsyad Al Banjari regarding utilization of zakat to the economic empowerment of the people can be done by providing the means or equipment to mustahiq tailored to intelligence or skills possessed mustahiq. While the mustahiq are able to develop their productive effort to be given the capital. North Asian International Research Journal of Multidisciplinary ISSN: 2454 - 2326 Vol. 2, Issue 5 May 2016 IRJIF IMPACT FACTOR: 3.52

North Asian International research Journal consortium www.nairjc.com 9 Other studies relating to zakat to economic empowerment that is, research that explains that the utilization of zakat that is effective to reduce the level of poverty is not only used as a fulfillment of consumption alone but can also be used for efforts to meet the needs of productive, educational assistance and efforts to create employment and reduce unemployment.

Ulin Ulfa in his research discusses the productive utilization of zakat in the perspective of Islamic law is justifiable, as long as attention to the basic needs for each mustahiq in the form of consumptive urgent to be addressed immediately. Besides the utilization and management of zakat for productive ventures permitted by Islamic law for zakat is quite a lot. AQodri Azizy in his book concludes that zakat should not merely consumptive, then ideally zakat as a source of community funds.

The use of zakat to the consumer are for things that contingency. That is, when there is mustahiq are unlikely to be guided to have an independent business or indeed to the immediate interests, the consumptive use to do. From various studies on the above, the authors have not found studies that specifically discusses the relationship the amount of funds (zakat productive) issued by the Institute of zakat for productive activities with revenue earned mustahiq, so Economy mustahiq be empowered, in general, the existing research only discusses about the influence of zakat to the empowerment of the people.

ZAKAT FOR PRODUCTIVE BUSINESS Utilization of zakat should be a positive impact for mustahiq, both economically and socially. From the economic side, mustahiq prosecuted truly be independent and live decent lives while on the social side, mustahiq are required to live in parallel with the other communities. This means, zakat is not only distributed to consumer matters only and merely for the sake of charity, but more productive and educative. The main drawback of poor people and small businesses that do not actually doing solely on the lack of capital, but rather on the mental attitude and the readiness of business management. for that, zakat productive businesses at an early stage to be able to educate mustahiq so really ready for change.

Since it is unlikely that poverty can be changed unless it starts from the poor mental changes themselves. This is called empowerment role. Zakat can be collected in the long term should be able to empower mustahiq up on the plains of business development. North Asian International Research Journal of Multidisciplinary ISSN: 2454 - 2326 Vol. 2, Issue 5 May 2016 IRJIF IMPACT FACTOR: 3.52 North Asian International research Journal consortium www.nairjc.com 10 programs consumptive only acts as a stimulant or a stimulus, short-term, while this empowerment program should be prioritized.

Meaning of empowerment in the broadest sense is independently partners, so partners in this case mustahiq not always depend on the amyl. ZAKAT INFLUENCE THE ECONOMY Zakat can be used as one form of capital for small businesses. Thus, zakat has enormous influence in many ways the lives of people, among them is the effect on the economy. Zakat influence the other is the revenue sharing equitably to the Islamic community.

In other words, the management of zakat in a professional and productive society can contribute to help the economy weak and assist the government in improving the country's economy, with the economic helpless beings in accordance with the missions assigned. Among the missions are: The mission of economic and business development which are based on the size of the economy and businesses are prevalent and universal. The mission of the implementation of business ethics and law the mission builds economic strength to Islam, so that it becomes a source of funds supporting the propagation of Islam. BIBLIOGRAPHY ? Ahmad M. Saefuddin (1987). Economy and Society in the Perspective of Islam, ed.1 cet.1. (Jakarta: PT Rajawali), p. 71.

? Alfiya Nur Hasanah (2005). "Relationships Zakat against Poverty Level at BAZ DIY Year 1939-2003", Thesis S1, Yogyakarta: UIN Sunan Kalijaga, 2005, p. 73. ? A. Qodri Azizy (2004). Building the Foundations of Economics People (telescoped Prospects of Economic Development of Islam), cet. 1. (Yogyakarta: Student Library), pp 148-149. ? Quoted in Abdurrachman Qadir (2001). Zakat (In Mahdah and Social Dimensions), ed. 1, cet. 2. (Jakarta: RajaGrafindo Persada), p. 24. ? Didien Hafidhuddin, Zakat in the Modern Economy, (Jakarta: Gema Insani Press, t.t.) p.1

? Didin Hafidhuddin and Ahmad Juwaini (2004), Build Civilization Zakat Meniti Road Zakat glories, (Jakarta: BAMUIS BNI and IMZ) p.2 ? Quoted from http://www.dinsosjatim.go.id/?prm mitra, 10 September 2008 North Asian International Research Journal of Multidisciplinary ISSN: 2454 - 2326 Vol. 2, Issue 5 May 2016 IRJIF IMPACT FACTOR: 3.52 North Asian International research Journal consortium www.nairjc.com 11 ? Hosnu El Wafa (2003). "The conception of Zakat Productive Thought Arsyad Sheikh Muhammad Al Banjari (study of the book Sabil Al Muhtadin", Thesis S1, Yogyakarta: UIN Sunan Kalijaga, 2003, p. 7. ? Hazamih (1998). "BAZ Zakat Management in Jakarta", Thesis S1, Yogyakarta: UII Faculty of Islamic Studies, p. 9. ? Muhammad Ridwan (2005).

Management Baitul Maal Wa Tamwil (BMT), cet 2. (Yogyakarta: UII Press), p. 189-190. ? Mohammad Daud Ali (1988). Islamic Economic System Zakat and Waqaf, cet. 1. (Jakarta: UI Press), p. 52-53. ? Miranty Abidin & Didier Hafidhuddin,(2001), Rally Point Zakat and Tax, (Jakarta: Peduli Ummat) hal.120 ? Muhammad Ridwan Mas'ud (2005). Zakat Economic Empowerment and Poverty Instruments Ummah. (Yogyakarta: UII Press), pp 216-217. ? Muhammad Ridwan Mas'ud, (2005). Zakat Economic Empowerment and Poverty Instruments Ummah. (Yogyakarta: UII Press), p. 127.

? Nurul Riyanti Fauzi, "Effectiveness and Efficiency Analysis of ZIS Fund Management at the Institute of Zakat in Indonesia (Republika Dhuafa Wallet Case Study)", Thesis Economics, Yogyakarta: Islamic University of Indonesia, 2004, p.66 ? Sri Haryani and Imam Subkhan,(2008). "Effectiveness Study of Urban Poverty Project Execution- Rehabilitation and Reconstruction Society and Community-Based Settlement (P2KP-REKOMPAK) in the Region Bantul, Yogyakarta", quoted from http://los-diy.or.id/artikel / facsheet / Losdiy-P2KP- REKOMPAK Research Report. pdf October 10 ? Ulin Ulfa (2005).

"Utilization of Zakat for Productive Business (Study on 16Ayat Article 2 ? UU no. 38 Year 1999 on Zakat Management (2005). Thesis S1, Yogyakarta: UIN Sunan Kalijaga, p. 70. North Asian International Research Journal of Multidisciplinary ISSN: 2454 - 2326 Vol. 2, Issue 5 May 2016 IRJIF IMPACT FACTOR: 3.52 North Asian International research Journal consortium www.nairjc.com 12 Publish Research Article Dear Sir/Mam, We invite unpublished Research Paper,Summary of Research Project,Theses,Books and Book Review for publication.

Address: - Dr. Ashak Hussain Malik House No -221, Gangoo Pulwama - 192301 Jammu & Kashmir, India Cell: 09086405302, 09906662570, Ph No: 01933212815 Email: [email protected] , [email protected] Website: www.nairjc.com