Fintech And the Determinants of Efficiency of Non-governmental Zakat Institutions in Nigeria

• Main Authors: El-Yakub, Tijjani, Abdul Rahim, Ahmad Khilmy
• Format: Article
• Language: English
• Published: Lembaga Zakat Negeri Kedah 2023
• Subjects: HB Economic Theory
• Online Access: https://repo.uum.edu.my/id/eprint/31313/1/IJZIP%2005%2001%202023%2001-12.pdf; https://repo.uum.edu.my/id/eprint/31313/; https://journal.zakatkedah.com.my/
• Institution: Universiti Utara Malaysia

Zakat is compulsory on Muslims from wealth that is up to an amount to the recipients (al-Mustahiq) for socio-economic justice. Zakat is managed by government institutions in most Muslim countries. In Nigeria, however, not all zakat institutions are managed by government especially where Muslims are not dominant. Such gap is filled by non-governmental zakat institutions (NZIs) making zakat administration more efficient. The intention of this paper is to examine the efficiency of NZIs 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 (TE), pure technical (PTE) and scale efficiency (SE) for efficiency improvement. From Tobit Regression, more analysis was carried out to explore the influence of Fintech and determinants of the efficiency of NZIs in Nigeria. The study found out that NZIs exhibited mean technical efficiency of 74.3% and scale inefficiency dominates the pure technical inefficiency effects in determining technical efficiency of NZIs. This indicates that there is need to pay more attention on technology to enhance efficiency of NZIs