Abstract:
This study aimed to analyze the comparative contribution of the collection of
Zakat (Islamic integrated social finance) and Real Gross Domestic Product (RGDP) to
the incidence /nature of poverty in the context of Malaysia by employing quantitative
methodology. The data, time series, used in this study were collected from Economic
Planning Unit – Prime Minister’s Department of Malaysia and Islamic Social Fiancé
Report 2014, Ministry of Finance of Malaysia and various web-based sources for the
period from year 1990 to year 2015. Correlation, regression, causality, Johansen cointegration, normality, autocorrelation LM, and hetereoskedasticy/homoskedasticity were
used under data analysis and discussion. All the data collected were analyzed with the
use of the statistical software called E-views 6.0. A multiple regression model was
formulated so as to achieve the objective of the study. HCI (Head Count Index: the
incidence/nature of poverty in Malaysia) was the dependent variable and the collection
of Zakat and Real Gross Domestic Product were the independent variables. There was a
significant relationship between the incidence/nature of poverty alleviation and the
collection of Zaka in Malaysia. There was a negative associationship/relationship between
the alleviation of poverty and the collection of Zakat. One percent of increment in the
collection of Zakat led to decline the alleviation of poverty by 3.12 units in Malaysia
and one percent of increment in the real growth rate in Malaysia led to decrease the
nature of poverty/ alleviation of poverty by around 0.032. The policy makers and the
government of Malaysia in terms of the annual growth rate of collection of Zakat and
the real growth rate of GDP of the country could be appropriately directed to make
aware of adopting the strategic macroeconomic management.
