Alliance Islamic Bank Zakat Microfinancing Programme (“AZAM”)
Microfinancing Programme For Asnaf Micro-Entrepreneurs
Malaysia’s first Shariah-compliant microfinancing programme
that utilises zakat wakalah
About AZAM
Transforming Zakat into Sustainable Livelihoods
Alliance Islamic Bank Zakat Microfinancing Program (AZAM) is Malaysia’s first Islamic social funding programme that utilises zakat wakalah* to provide Shariah-compliant business financing at no cost to asnaf (underprivileged) micro-entrepreneurs. More than providing financial assistance, AZAM empowers aspiring entrepreneurs with capital, business guidance and continuous support they need to build sustainable businesses and achieve long-term financial independence.
Having funded AZAM through its own zakat wakalah since 2023, Alliance Islamic Bank now invites individuals and corporations to be part of this endeavour.
Contributors in Selangor can now entrust their zakat wakalah to AZAM with confidence. This has been made possible with the approval from Lembaga Zakat Selangor, and this milestone positions Alliance Islamic Bank as the first Islamic Bank in Malaysia to implement such a funding model for social financing.
Together with our trusted implementation partners, Amanah Ikhtiar Malaysia, and Lembaga Zakat Selangor, every contribution is channelled directly to eligible asnaf micro-entrepreneurs, creating measurable and lasting impact.
*Zakat wakalah is an arrangement where a zakat payer appoints an agent approved by the relevant state zakat authority to distribute zakat on their behalf.
AZAM delivers measurable results through structured, Shariah-compliant support for underserved micro-entrepreneurs
“Repayment data was provided by Amanah Ikhtiar Malaysia, the implementation partner for AZAM”
Objectives of Alliance Islamic Bank Zakat Microfinancing Programme (“AZAM”)
- Transform zakat into sustainable economic opportunities for asnaf micro-entrepreneurs
- Expand financial inclusion and provide affordable financing
- Strengthen Malaysia’s social finance ecosystem through productive zakat
Benefits of Alliance Islamic Bank Zakat Microfinancing Programme (“AZAM”)
- Improve the economic well-being of the asnaf community through entrepreneurship and business
- Empower asnaf micro-entrepreneurs to grow into successful SMEs, creating jobs and contributing to economic growth
- Advance a social finance model that delivers long-term economic and social impact for the asnaf community
Who can apply for AZAM?
- Asnaf micro-entrepreneurs in Selangor who are registered with Amanah Ikhtiar Malaysia (AIM) (currently applicable only to participants)
FAQs on Our Zakat Microfinancing Programme
Alliance Islamic Bank Zakat Microfinancing Programme (“AZAM”) is a first-of-its kind Islamic social microfinancing programme in Malaysia that utilises Zakat Wakalah Distribution funds to help asnaf micro-entrepreneurs. The programme will enable recipients to expand their businesses and improve their livelihoods by providing them access to affordable financing opportunity. The fund will be distributed according to the Qard concept (repayment without profit).
In March 2023, the Selangor Fatwa Committee granted a permission to allow the implementation of the microfinancing programme by Alliance Islamic Bank that is given Wakalah funds by Lembaga Zakat Selangor based on Shariah law.
The underlying Shariah concept used is Qard (interest-free financing), where the asnaf micro-entrepreneurs are only required to pay the equivalent amount borrowed throughout the tenure.
- Applicants must have the status of ‘asnaf’ (asnaf fakir atau miskin’), as determined by the State Islamic Religious Council.
- Applicants must be registered with Lembaga Zakat Selangor.
- Applicants must also be registered with Amanah Ikhtiar Malaysia.
- Applicants must seek funds for their businesses, not for consumption of basic needs such as food, medication or education.
- Alliance Islamic Bank allocates Zakat Wakalah funds for the microfinancing programme.
- Funds are channelled to eligible asnaf micro-entrepreneurs in the form of microfinancing using the Shariah concept of Qard. (Qard is a form of financing with no interest and no additional charges).
- This programme also offers training sessions to equip asnaf micro-entrepreneurs with entrepreneurial skills such as financial and business management, and marketing to improve their business performance.
- Asnaf micro-entrepreneurs use the funds from microfinancing to start or expand their existing businesses.
- Asnaf micro-entrepreneurs then make repayments for the financing amount in instalments.
- Zakat funds paid by the asnaf micro-entrepreneurs can be used and distributed to the subsequent asnaf micro-entrepreneurs who are qualified in the form of microfinancing. Through this method, zakat micro-financing is used repeatedly while providing multiple and continuous benefits to the asnaf micro-entrepreneur community.
The applicant of the Zakat Wakalah Distribution funds (in this case, Alliance Islamic Bank) is responsible for determining and identifying the recipients. The confirmation of the eligibility of the recipients will be done by Lembaga Zakat Selangor.
RM5,000 for first-time eligible asnaf micro-entrepreneur. The Bank may decide to increase the subsequent financing amount, subject to the availability of the Zakat Wakalah distribution fund.
One year from the disbursement date.
The programme uses the concept of Qard, so it is an interest-free financing.
The asnaf micro-entrepreneur will no longer be eligible for a second round of funding.
The zakat fund will be re-distributed to other eligible asnaf micro-entrepreneurs and shall be distributed in the form of consumptive zakat within 3 years of the programme execution.
For this pilot phase, Alliance Islamic Bank is targeting to allocate RM225,000 to help 45 asnaf micro-entrepreneurs.
No, the Bank will not receive any profit or dividend. No interest (0%) or management fees charged in relation to the micro-financing based on the concept of Qard.
Amanah Ikhtiar Malaysia, the strategic partner for this programme is responsible for screening of recipients and providing infrastructure for fund disbursement and collections.
Financial inclusion is key to uplift the livelihoods of the asnaf community. AIS understands the challenges faced by the asnaf micro-entrepreneurs who are in need of funding opportunity. This programme is able to create a financial ecosystem that is more inclusive for the underserved segments that do not receive attention from financial institutions. It will ensure a wider access to financing and capital support to the asnaf community to improve their economic standing and become the next generation of SMEs in the country.
See how the AZAM Programme is transforming lives and driving economic inclusion
Real voices. Real impact. Stories from those whose lives have changed.
Our Award & Recognition
Best Islamic Financial Inclusion Initiative
Alliance Islamic Bank’s Zakat Microfinancing Programme (AZAM) wins Global Islamic Finance Award 2024.
FAQs on Individual or Corporate Zakat Wakalah Contributions
Wakalah is a mechanism by the State Islamic Religious Councils (SIRCs) that allows eligible zakat payers (Muzakki) to participate directly in distributing a portion of their zakat to approved asnaf beneficiaries, subject to the guidelines of the respective SIRCs.
Individuals and organisations that have fulfilled the required zakat payment to the respective State Islamic Religious Councils (SIRCs) for the calendar year. Currently this programme is open only to zakat payers in Selangor
The amount approved for contribution depends on the applicant’s total zakat payment for the relevant calendar year, in accordance with the guidelines of the respective SIRC.
- Email us your interest to participate at islamicsocialfinance@alliancefg.com. Our team will assist you with your application to Lembaga Zakat Selangor and contact you within 48 hours.
- Complete the required application form and provide the supporting documents.
- Submit the completed form and supporting documents to: islamicsocialfinance@alliancefg.com
100% of your approved Zakat Wakalah contribution will be channeled as zero-profit microfinancing to eligible asnaf micro-entrepreneurs. No portion of your contribution will be used to cover the Bank’s management or administrative costs.
Eligible recipients are identified and verified by Lembaga Zakat Selangor based on their asnaf status. Amanah Ikhtiar Malaysia, the Bank’s implementation partner, manages participant screening, programme delivery and financing administration to ensure funds are utilized effectively.
The Bank will publish an annual impact report detailing how Zakat Wakalah contributions have been utilized and the measurable social and economic outcomes achieved by the AZAM programme. This ensures transparency, accountability and confidence that every contribution creates meaningful impact.
Individuals or corporations in Selangor contributing over RM40,000 in zakat are welcome to apply.
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