Productive zakat, business growth, and mustahiq welfare: Evidence from BAZNAS Malang

Purpose – This study examines the effects of productive zakat and business assistance on mustahiq welfare, with business growth as a mediating variable.Methodology – This study adopts a quantitative explanatory approach using Partial Least Squares Structural Equation Modeling (SEM-PLS). Data were collected from 100 beneficiaries of the productive zakat program administered by BAZNAS Malang City via structured questionnaires, supplemented by in-depth interviews to provide deeper analytical insights.Findings – The results indicate that business assistance positively and significantly affects business growth, whereas productive zakat does not. However, productive zakat has a significant indirect effect on mustahiq welfare through the growth of businesses. In contrast, business assistance does not have a significant indirect effect on welfare via business growth. These findings underscore the pivotal role of business growth as a mediating mechanism linking productive zakat to improved mustahiq welfare.Implications – This study suggests that the effectiveness of mustahiq empowerment programs largely depends on the quality and sustainability of business mentoring, as well as the alignment of zakat-based support with beneficiaries’ actual needs. Accordingly, zakat management institutions are encouraged to strengthen continuous guidance, monitoring, and evaluation mechanisms to ensure sustainable welfare outcomes.Originality – This study contributes to the zakat literature by empirically integrating productive zakat, business assistance, and business growth within a mediation framework, providing new insights into how zakat-based empowerment programs can effectively enhance mustahiq welfare.