FINTECH AND THE DETERMINANTS OF EFFICIENCY OF NON-GOVERNMENTAL ZAKAT INSTITUTIONS: A NON-PARAMATRIC APPROACH
Tijjani El-Yakub, Dr. Ahmad Khilmy Abd Rahim, and Assoc. Prof Dr. Rosemaliza Bt Abd Rashid

College of Business, Islamic Business School, Universiti Utara Malaysia, Sintok, Kedah - Malaysia.

Abstract

Zakat payment is compulsory on rich Muslims out of their wealth that is up to a specific amount that is guided by principles to recipients known as Al-mustahiqqeen with an aim of attaining socio-economic justice. Zakat is managed by trusted institutions assigned by the government in most Muslim countries. In Nigeria, however, not all zakat institutions are managed by the government especially in states where Muslims are not dominant and there is a gap in the zakat payment system. The significance of non-governmental zakat institutions is to bridge such gaps and make zakat administration more efficient. The intention of this paper is to examine the efficiency of non-governmental zakat institutions in Nigeria. The data comprises a panel of six non-governmental zakat institutions in Nigeria in the period of 2015 to 2019. The use of Data Envelopment Analysis (DEA) in this study allowed us to differentiate between the three kinds of efficiency known as technical, pure technical and scale efficiency in identifying how efficiency could be improved. From Tobit Regression, more analysis was carried out to explore the influence of FinTech and other administrative factors on the efficiency of non-governmental zakat institutions in Nigeria.

Keywords: DEA, Efficiency, Fintech, non-governmental zakat institutions

Topic: Islamic Social Finance, Philanthropy for Economics Empowering and Poverty Alleviation