ZAKAT: AN EFFECTIVE TOOL TO ALLEVIATE HUNGER AND POVERTY IN ISLAMIC WORLDSTUDENTS NAME: ABDIHAKIM SHARIF ABDIKADIRSTUDENT ID: 10091240COURSE NAME/CODE: THS 401A proposal submitted in partial fulfillment for the requirement of the award of bachelor degree of Islamic Banking, Economics and Finance at Islamic Online University.April, 2019Zakat: An effective tool to alleviate hunger and poverty in Islamic WorldAbstractHunger and Poverty are among the major challenges confronted by the Islamic world. Eradication of extreme hunger and poverty is the number one Millennium Development Goals (MDGs) in the world every year.Yet, no substantial progress was made. Zakat, an Islamic economic institution established in 9AH is an effective tool to alleviate hunger and poverty in Islamic World. This paper intends to explore, how Zakat if used effectively can help alleviate hunger and poverty in Islamic World. Key words: Zakat Institution, Effectiveness, Hunger and Poverty Alleviation, Islamic Economic System.1.0 Introduction Hunger and poverty is deepening the crises in the world. Governments and Aid organizations are yet to end this economic crisis not due to inadequate resources but also absence of moral uplift and unsustainability of their programs.This crisis is not spared in the Islamic world. More than half of OIC member states are categorized as less developed countries. Civil strife and terrorism war in Islamic world has displaced more people resulting in famine. States and Aid agencies could not cater for the wellbeing of all the displaced people. Hunger and poverty continues affecting more.Zakat, an Islamic institution has historically proved to solve the problem of poverty in Islamic world.During the periods of Umar bin Khattab and Umar bin Abdiaziz, poverty was completely eradicated to such an extent that there was no one to receive Zakat. The ultimate goal of all Islamic teachings is to be a blessing for mankind. This is the primary purpose for which the Prophet (peace and blessings of Allah be upon him) was sent to this world (Al-Qur’an 21:107). The five basic Maqaasid of the Shariah clearly states what constitutes a blessing for mankind. They are preservation of faith, soul, wealth, dignity and progeny (Auda, 2008).In Islam, poverty is defined as an individual failure to fulfill any of the five basic Shariah Objectives (Maqaasid). of life that is based on Maqasid SyariahZakat falls under wealth as a blessing institution to address income inequality and unjust allocation of resources. This is to ensure man lives in a blessed life free from poverty and hunger. In the Islamic world, significant progress has been made in poverty alleviation. Yet poverty level is high for a considerable number of countries. The number of people who live under $1.25 a day in the OIC member countries is nearly 150 million as of 2002-2010 data. 19 out of the 57 OIC member countries are in the low-income country group with a total population of nearly one-fourth of OIC region. Their combined total GDP is only 4.5 percent of the total GDP of OIC countries. (COMCEC, 2013)1.1 Problem StatementAllah created the world to worship Him alone. I did not create the Jinn and the Mankind except to worship Me. Poverty and Hunger lead man to go astray and worship affluent people. This financial worship degrades man and deteriorates his poverty. Zakat Institution is established to free man from the bondage of worshipping his fellow human to Allah, the creator of all. It has historically proved to solve the problem of poverty and hunger during the periods of Umar bin Khattab and Umar bin Abdiaziz. This paper points out the role of Zakat in alleviating Hunger and Poverty in Islamic world. It describes; Conceptual understanding of Zakat as an Institution of hunger and poverty alleviation. Conceptual understanding of hunger and poverty. OIC states approach to Zakat Grass root Approaches to Zakat1.2 Objectives This paper aims to present a clear understanding of the role of Zakat institution in hunger and poverty alleviation in Islamic world. 1.2.1 Specific Objectives To examine scope of Zakat as an economic pillar of Islam. To describe opportunities of establishing Zakat To find out challenges of establishing Zakat1.3 MethodologyDescriptive approach will be used in this paper to describe concepts and find out the variables determining the relationship between Zakat institution and hunger and poverty problem. The main sources of this study are Islamic Muamalat and Islamic economics. 2.0 Literature Review2.1 Concept of ZakatLinguistically, Zakat means to grow. It also means to purify. The first meaning is construed as to cause growth in wealth or increase in reward. This is supported by the hadith of the prophet (peace and blessings be upon him), No wealth decreases because of Sadaqa (Zakat). This implies increase in wealth and multiplication of reward. The second meaning to purify implies purifying the human soul from sins as well the vice of avarice. According to Shariah, Zakat refers to a determined share of wealth prescribed by Allah to be distributed to 8 deserving categories, poor and needy among them. (Hussein, 2017)