Islam promotes equitable economic distribution and upholds the rights of the poor through zakat and other forms of charity. In the absence of the state to enforce zakat obligations on citizens, zakat collection shrank over time, leaving only a small portion of zakat to be paid by Muslims within their community through personal and informal channels (Kahf, 2000). In this regard, zakat has played an important role in reducing poverty and ensuring the social development of the less privileged members of society (Sulaiman, 2003).
Zakat also helps to increase savings as it removes some of the prior savings (Choudhury, 1983). Getting small business startup capital has always been one of the most challenging issues for would-be entrepreneurs. The availability of capital would significantly improve operational efficiency and effectiveness, leading to improved org.
Unfortunately, most of the zakat money in Bangladesh is given to people as consumption money and not as seed money for business capital. This has a lot to do with the issue of inequality (distribution of income and wealth) and identifies the poor relative to other segments of society ie. iii). Over the next five years, the rate of decline averaged 1.7 percentage points, reducing the number of poor to 31.5 percent of the population (The Daily Star, 2013).
Karim (2001) of the International Labor Office in Geneva highlighted the important social and economic characteristics of women entrepreneurs in Bangladesh.
BRIEF OVERVIEW OF CZM JEEBIKA KARNAPHULI PROJECT Jeebika Karnaphuli Project is a zakat based poverty project. iii) Group Profit: The profit accrued from the service charges charged for the micro loans accumulated in the group bank account. The profits are divided equally among all members of the group. iv) Support to the social sector: Covers support for education, health, water, sanitation and gardening. v) Capacity building: Covers support for training in management, leadership and entrepreneurial skills.
EMPIRICAL MODELS AND VARIABLES
Three variables have been chosen to measure the success of micro-enterprises, namely income, fixed assets and household expenditure. Bangladesh Taka before and after receipt of zakat Change Fixed Assets The total amount of fixed assets in Bangladesh. The total amount of expenditure per month in Bangladesh Taka before and after receiving zakat.
Three factors are used to measure the effectiveness of zakat on the success of microenterprises. Second, the characteristics of the entrepreneur are also expected to influence the performance of the microenterprise. Entrepreneur characteristics commonly used for assessment are age, education and family size.
Finally, the type of business is also considered important factors in contributing to the success and failure of micro-enterprises. It uses the gross income of the micro-enterprise from the flow of income generated from sales of goods and services as the dependent variable. Apart from income, fixed assets are one of the best indicators to track changes in corporate welfare and can be considered a measure of success (McPherson, Molina, & . Jewell, 2010).
Household expenditure is one of the measures of microenterprise success (Ngaosi & Navarro, 2007; Rahman, Jafrullah, & . Islam, 2008). Funding consists of the amount of zakat received, which reflects the amount of zakat received from the poor. It is assumed that the amount of zakat can be one of the most important factors for the success of microenterprise (Nawai & Shariff, 2010).
Entrepreneur characteristics have been used in many previous literatures to examine entrepreneurial success (Faridi, 2011; This study selects four variables of entrepreneur characteristics assuming that these variables will have a positive impact on the success of micro-enterprises. Previous studies suggest that older entrepreneurs are more likely to succeed perhaps because of greater experience.ii) Education: Studies in the past have recognized educational background as an important characteristic of the entrepreneur influencing the success of an enterprise ( Bhasin & Akpalu, 2001; Halim, Muda, Amin, & Salleh, 2012; Daou & Karuranga, 2012; Tovstiga.
DATA AND RESEARCH METHODOLOGY 5.1 Survey Design and Data Collection
However, the variation in the proportion of micro-entrepreneurs who received zakat is not known. In accordance with the calculation result, more than 400 respondents were selected for this study among micro-entrepreneurs who received zakat from CZM. The before and after method has been used to calculate the effectiveness of zakat on micro-entrepreneurs by measuring changes in income, fixed assets and household expenses before and after receiving zakat.
By focusing on changes in the dependent variable, the unobserved factors remain constant, which vary from one state to another but do not change within the state over time.
Micro-entrepreneurs have established 3 types of businesses that reflect the rural nature of the project area. Almost 62% of zakat recipients are engaged in domestic activities, a type of business that female entrepreneurs can easily handle. The investment sizes of the micro-entrepreneurs ranged from BDT 40,000 to 75,000 over a period of four years.
About 8% of the investments can be considered as low-end investments ranging between BDT 40,000 to 50,000. Most of the investments can be considered as large investments ranging from BDT 60,001 to BDT 75,000. According to the table, an equally important change is in the increase in the holding of fixed assets.
Household spending has increased over time, but this increase is not as great as the change in income or the change in fixed assets. The following section highlights the empirical results from the analysis of the determinants of success of micro-enterprises receiving zakat funds from CZM in terms of income, fixed assets and household expenditure. Regression (1) focuses on the factors that determine the success of microenterprises that have received zakat funds as measured by the change in income.
Entrepreneur characteristics in terms of age indicate a positive relationship with the change in income of micro-enterprises. The results also show that family size had a negative and significant impact on the entrepreneur's income. The amount of zakat money invested by micro-entrepreneurs had a positive and significant impact on the change in their income.
This fund, which is different from a loan, has given poor women the opportunity to start their own businesses and engage in economic activities outside the household. The results indicate that factors such as zakat amount, age and education level do not significantly influence the change in fixed assets of microenterprises. The only factor that affects the change in fixed assets is the type of business and family size of the entrepreneur.
The results indicate the amount of zakat, age, type of business and family size all have significant influence on the change in household expenditure. Education level of the entrepreneur, on the other hand, does not play a significant role in influencing change in household expenditure.
CONCLUSION AND RECOMMENDATION
The significance difference between entrepreneurial profile and entrepreneurial personality in micro and small businesses: Malaysia Creative Industry. Retrieved September 8, 2015, from http://tribune.com.pk/story 563435/gdp-40pc-of-muslim-states-population-fall-below-poverty-line/. Effectiveness of microcredits for poverty reduction in agricultural intensification projects in Bangladesh (PhD Thesis).
Understanding small business owners: What they really aim for and how it relates to business performance: A case study in North Karelia, Finland.
