Sarcouncil Journal of Education and Sociology

Abstract: Digitalization of global Islamic social finance is growing rapidly. Zakat as a tool of Islamic social finance is also adopting technology to enhance its collection and distribution process. Bangladesh as a Muslim majority country and expansion of fin tech ecosystem provides a unique case for the investigation of digitalization of zakat institutions because its traditional system has become plagued with lack of efficiency. This paper examines the prospects and hindrances that surround online zakat collection and distribution in Bangladesh employing a systematic literature review (SLR) centered on the PRISMA guidelines. Among 1,118 studies through inclusion criteria 13 peer-reviewed articles and quality reports were reviewed for qualitative synthesis under five themes: adoption and donor behavior, platform design and fundraising strategies, Shariah governance and operational controls, institutional evidence in Bangladesh and emerging frontiers such as crowd funding and digital assets. The findings indicate that digital zakat offers significant possibilities to enhance the level of transparency and efficiency and inclusivity. The qualities of a successful donor adoption include trust, literacy and usability and the successful platforms include analytics, donor engagement and multi-rail payment systems. However, there are some barriers, which include poor Shariah governance, poor fund separation and audit system, and institutional disintegration in financial ecosystem of Bangladesh. The new opportunities, including zakat on digital assets and diaspora-oriented crowd funding show the prospects of further increase but demand regulatory and jurisprudential preparedness. The paper concludes that an avenue is a federated digital zakat stack, which is a combination of banks, mobile financial services, accredited zakat institutions and verification of beneficiaries through interoperable systems. The secret of realizing the transformative effect of Zakat in alleviating poverty is to improve governance and interoperability.