Investment of the Zakat Money

The Thirteenth Fiqh Seminar of the Islamic Fiqh Academy (India) held on in April 2001 discussed the matter of investing the Zakat money and adopted the following resolutions in the light of opinions presented by some academic institutions.

12.1 In many countries and regions Muslims are reeling under utter poverty and economic backwardness. Non-Muslims and the Qadyani missionaries are making hay of the situation arising from Muslims' ignorance of religion and economic backwardness. By extending financial help to these poor and ignorant Muslims the missionaries are befriending them for the sole purpose of diverting them from their true Faith. To counter this situation it is extremely necessary to take steps for the well-being of such Muslims and remove poverty rampant among them and to help them get rid of the specter of hunger and starvation that has jeopardised their faith and religion. These Muslims deserve the most to be helped. It is the responsibility of Muslims in every country and region to send their Zakat money to such poor Muslims and also to help them monetarily from other heads of charity in case the Zakat money falls short of meeting the needs of hunger stricken Muslims.

12.2 The poor and destitute have proprietary rights on whatever they receive in Zakat. If a destitute or needy person or a group of them invest the money received in Zakat in a business to get benefit from the capital in the days to come, it will be permitted and the person who has given money will be treated as having fulfilled the obligation of Zakat.

12.3 A person or a group of persons paying Zakat is not permitted to invest Zakat money in a beneficial business in order that the proceeds are distributed among those who are entitled for receiving Zakat. The Zakat will not be treated paid in this manner.

12.4 According to Shariah, it is permitted to purchase certain machines and equipments keeping in view the industry and craft in which the poor and needy persons may be interested, and give the same in the latter's possession. It is also permitted that taking into consideration the commercial needs of a destitute, a shop is built with the Zakat money and is given in his possession. Thus, the person spending money on the equipment or the shop will be treated as having paid Zakat.

12.5 If someone builds living quarters or shops and gives the same to the destitute and needy for residence and commercial activities without making the occupants owners of the property it will not be treated as payment of Zakat.

12.6 While paying Zakat care should be taken that the needy persons entitled for Zakat in one's neighborhood are not ignored.