Throughout many Muslim-majority countries, zakat is voluntary. In six countries – Malaysia, Saudi Arabia, Pakistan, Sudan Libya and Yemen – Zakat is collected by the state. Zakat can be an important component of national and NGO emergency support programmes as the donors typically require that Zakat be disbursed within one year of being given. Especially during the pandemic times where it was hard for much of the world, especially the needy Zakat can play a strong role in emergency support. the United Kingdom (UK), Malaysia, the United Arab Emirates (UAE), Indonesia, Saudi Arabia and the United States of America are home to the most Sharia-compliant fintechs, as what was highlighted by a recent report. Much of those solutions is helping digitalise many aspects of Islamic Finance and that also includes Zakat – coupled with wider economic development digital strategies and initiatives. In addition, cities such as Kuala Lumpur, London and Dubai, have growing Islamic Finance hub activities and others such as Abu Dhabi (UAE), Riyadh (Saudi Arabia), Doha (Qatar), Jakarta (Indonesia), and Karachi (Pakistan) – to name a few – are also increasing.
With the rise of the likes of digital currencies such as bitcoin, Islamic social finance platform GlobalSadaqah’s last year had a conservative estimate that the assets held in bitcoin that should be eligible for Zakat is around $200 million. There are various examples of fintech and Zakat working together across the vast region of MEA, which is home to over 1.7 billion people, many of which are Muslims. After all, the region is also the birthplace of Islam. Dubai’s Smart Dubai this year collaborated with the UAE Zakat Fund to launch a new and secure Zakat payment service on the government service application DubaiNow during the Holy Month of Ramadan and in line with Smart Dubai’s mission to provide users of the app with comprehensive smart services that ease every aspect of their everyday lives – as reported on the Dubai Media Office. The new service allows users to calculate their Zakat amount in accordance with Islamic Sharia law, and then pay the full amount or part of it. In Africa, countries such as Nigeria are seeing solutions such as eTijar, which is poised to lead innovation and deepen the Nigerian non-interest finance market, as it is working out modalities to be a full shariah-compliant ethical finance and wealth management fintech platform. They offer a wide range of services such as Zakat, Wassiyat (will) – to name a few. Islamic Finance, highlighted mainly here around Zakat, is seeing various digital solutions where Sharia-compliant fintech has helped bridge gaps. This has happened in the wider global finance sector. Nevertheless, in this case it has been helping finance for good.