Empowering Asnaf through Zakat and Digital Transformation: A Literature Review on Challenges and Strategic Directions in Malaysia

Abstract

This paper reviews the intersection between Zakat as a cornerstone of Islamic social finance and digital transformation for empowering the Asnaf community in Malaysia. Through a systematic literature review, it examines the challenges and strategic directions in integrating financial technology (Fintech) and digital platforms into zakat management. This review highlights how digitalization enhances transparency, accountability, and efficiency in zakat collection and distribution, ensuring more equitable access to resources and improving socio-economic outcomes for beneficiaries. However, despite Malaysia’s progressive zakat infrastructure, challenges persist, including digital literacy gaps, inadequate technological readiness, regulatory constraints, and uneven access to digital tools among Asnaf communities. Addressing these challenges requires a comprehensive digital strategy underpinned by Shariah compliance, robust governance, and technological innovation. The review highlights the role of Islamic fintech, such as blockchain and mobile payment systems, in promoting financial inclusion and strengthening institutional credibility. Furthermore, it identifies the need for capacity building, particularly in digital entrepreneurship and literacy, to transform Asnaf from passive recipients into active economic contributors. Ultimately, the paper discusses that the synergy between zakat and digital transformation presents a transformative pathway for sustainable poverty alleviation and socioeconomic empowerment in Malaysia, aligning with the objectives of Maqasid al-Shariah and the United Nations Sustainable Development Goals (SDGs).