The Muamalat Newsletter Vol. 2 2024

FEM eNewsletter | December 2024 44 ISHRAF 1.0 • Launched in 2020, the first phase of the ISHRAF program targeted 20 participants in Selangor, addressing the economic impact of the COVID-19 pandemic. • Participants collectively achieved RM1.35 million in sales from RM200,000 in zakat funds. • Seven participants transitioned from zakat recipients to zakat payers, marking a significant success. ISHRAF 2.0 • In 2021, the ISHRAF program expanded to include 79 participants across six states: Perlis, Kedah, Negeri Sembilan, Melaka, Sabah, and Kuala Lumpur. • A total of RM790,000 in zakat funding was allocated to support the participants. • ·Participants experienced an average monthly revenue increase from RM3,300 to RM5,100, with cumulative sales reaching RM3.63 million. ISHRAF 3.0 • ISHRAF 3.0 has been elevated to a national program under the i- TEKAD initiative by Bank Negara Malaysia. • The program collaborates with institutions such as Bank Islam and Permodalan Nasional Berhad. • It currently supports 400 participants with RM5.6 million in funding, focusing on developing competitive global entrepreneurs. c. Coaching and Mentorship Participants are paired with experienced business coaches who provide quarterly guidance. Coaching sessions monitor progress against Key Performance Indicators (KPIs), address challenges, and offer tailored advice to ensure that businesses remain on track. ISHRAF’s Phased Development an element of fairness and flexibility, reflecting the ethical principles of zakat. b. Infrastructure Development Another effective practice is the allocation of zakat funds to support infrastructure development for entrepreneurs. By providing upgraded equipment or shared facilities, zakat can address significant barriers to Effective Strategies for Zakat Distribution a. Linking Zakat with Microfinance The ISHRAF program serves as a valuable model for effective zakat distribution, particularly in the realm of entrepreneurial empowerment. One key approach highlighted is the integration of zakat with microfinance principles. By distributing zakat funds as qard hasan (benevolent loans), recipients are encouraged to use the funds responsibly while maintaining the compassionate and non-interest- bearing essence of Islamic finance. This model ensures that fundsareutilizedwith accountability, yet provisions for waivers based on exceptional circumstances or outstanding performance add growth, such as limited production capacity or inefficient tools. For instance, entrepreneurs struggling with outdated equipment can increase their productivity and market reach through these targeted upgrades. This infrastructure support complements financial aid by creating a conducive environment for business growth. c. Collaboration with Corporate Sponsors Collaboration with corporate sponsors adds another layer of effectiveness to zakat-based initiatives. Corporate Social Responsibility (CSR) contributions can enhance program resources, offering not only additional funding but also mentorship, access to professional