Productive Zakat and Halal Industry Competitiveness: Building Economic Resilience for MSMEs

Abstract

Purpose

This study examines how productive zakat, digital empowerment, and institutional synergy contribute to halal industry competitiveness and Micro, Small, and Medium Enterprise (MSME) welfare, with a focus on halal-certified enterprises in South Kalimantan. The research aims to provide empirical evidence on the effectiveness of zakat-based empowerment models in strengthening the halal economy and supporting inclusive growth.

Methodology

A quantitative approach using Partial Least Squares Structural Equation Modeling (PLS-SEM) was applied with 500 bootstrapping resamples. Data were collected from 137 halal-certified MSMEs supported by BAZNAS. The model incorporates four independent variables—productive zakat, understanding of productive zakat, synergy between zakat institutions and the halal industry, and business digitalization—and three mediation constructs: zakat program effectiveness, halal ecosystem sustainability, and effectiveness of zakat utilization. Halal product competitiveness functions as the primary endogenous variable, with MSME welfare as the ultimate outcome.

Findings

Synergy between zakat institutions and the halal industry, sustainability of the halal ecosystem, and program effectiveness significantly enhance halal product competitiveness. In turn, halal competitiveness positively influences MSME welfare. Meanwhile, productive zakat, understanding of productive zakat, and business digitalization do not directly strengthen competitiveness, but digitalization and synergy exert indirect effects through institutional and program-based mechanisms.

Research Limitations/Implications

This study is limited to halal-certified MSMEs in South Kalimantan, Indonesia, specifically those supported by BAZNAS. As such, the findings may not be generalized to other regions or zakat institutions with different operational structures. The cross-sectional design also limits causal inference. Future research could employ a longitudinal approach and include comparative analysis across regions or different Islamic social finance instruments, such as waqf-based financing, to validate and extend the proposed model.

Practical Implications

The findings suggest that zakat institutions should strengthen digital integration and program effectiveness to optimize the impact of productive zakat on MSME competitiveness. Policymakers and halal industry stakeholders can use these insights to design targeted interventions that combine financial assistance, halal certification support, and business digitalization strategies. Such synergy can enhance the performance of MSMEs and promote the sustainability of the halal economy.

Social Implications

The study highlights the transformative potential of productive zakat as a tool for inclusive economic growth. By empowering MSMEs and promoting halal product competitiveness, zakat can contribute to job creation, income equality, and community welfare. The integration of digital platforms and ecosystem collaboration also reinforces social trust and transparency within the halal economy, supporting the broader goal of sustainable and equitable development in Indonesia.

Novelty

This study offers one of the first empirical models linking productive zakat, digitalization, institutional synergy, and halal ecosystem sustainability to halal competitiveness and MSME welfare, highlighting that the impact of digital zakat and social finance depends on institutional capacity and structured program implementation rather than financial assistance alone.