The Moderating Effect of zakāh Distribution on the Economic Well-being of the Poor: An Analysis in Kelantan, Malaysia

Abstract

The main objective of this paper is to study the moderating effect of zakāh distribution on the family structure and the economic well-being of the poor in the state of Kelantan in Malaysia. The state of Kelantan was selected for the survey because it has the highest incidence of poverty in Peninsular Malaysia. The analysis of this study is based on Variance Based Structural Equation Modelling (VB-SEM) technique, while the data mining process, descriptive statistics and demographic data of this study were conducted using SPSS software. This study revealed that zakāh assistance and family structure dimensions positively and significantly affect economic well-being. The result also indicates that the direct effect of age, marital status, and gender is not significant due to the insufficient economic well-being that does not meet their basic needs. The mediating role of zakāh indicates that age, marital status, and gender have both significant indirect effect and insignificant direct effect on economic well-being, which means that the indirect effect of family structure on economic well-being is fully mediated by zakāh.