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Success of
An appraisal on the business entrepreneurial
success of entrepreneurial asnaf asnaf
An empirical study on the state zakat
organization (the Selangor Zakat Board or 51
Lembaga Zakat Selangor) in Malaysia
Amirul Afif Muhamat and Norlida Jaafar
Center of Finance, Economics, Insurance and Islamic Banking Studies,
Universiti Teknologi MARA, Shah Alam, Selangor, Malaysia
Hardi Emrie Rosly
MASMED, Universiti Teknologi MARA, Shah Alam, Selangor, Malaysia, and
Hasman Abdul Manan
Center of Marketing, Retailing and Entrepreneurship,
Universiti Teknologi MARA, Shah Alam, Selangor, Malaysia

Abstract
Purpose – The purpose of this paper is to evaluate and measure the business model of the state welfare
organization in assisting and ensuring the business success of its entrepreneurs or zakat recipients.
Design/methodology/approach – A survey was employed to obtain feedback from the recipients
of zakat for small businesses under the scheme of entrepreneurial asnaf zakat.
Findings – The respondents, in general, agree that the variables for the study – capital, courses or
training and knowledge or know-how – are important to them in helping the zakat recipients to
succeed in their businesses, which then translates into a better standard of living. Positive correlation
is shown for the three variables in determining the success rate of the programme and regression
analysis shows that only capital and an asnaf’s knowledge is significant in determining an asnaf’s
entrepreneurial success, which leaves training as insignificant.
Research limitations/implications – This paper explores the other side of zakat distribution, in the
sense that many studies focus on the distribution of zakat collection from the zakat payers to the asnaf
whereby the distinction of this study is that it evaluates the asnaf that want to transform their condition
through the entrepreneurial asnaf programme. This is rarely investigated due to the lack of a similar
programme in other places, even within Malaysia. The limitation for the study is in terms of solid support
from the respective parties. This includes the management of Lembaga Zakat Selangor, due to the
bureaucratic process, albeit understandable, to protect certain confidential information, and also
unfavourable respondents’ attitude when being questioned, which is a normal phenomenon in survey study.
Practical implications – This paper provides insights into the implementation of entrepreneurial
zakat, which can be emulated by other zakat collection agencies to develop similar or better innovative
programmes for the benefit of the community.
Originality/value – This paper is unique since the feedback is given by the entrepreneurs who
receive financial assistance from the state zakat organization in Malaysia, which means the
information is derived from the original source. The findings provide good information for
Journal of Financial Reporting and
practitioners as well as for academicians and students. Accounting
Keywords LZS, Asnaf, Usahawan asnaf, Zakat, Tithe, Malaysia, Entrepreneurs Vol. 11 No. 1, 2013
pp. 51-63
Paper type Research paper q Emerald Group Publishing Limited
1985-2517
DOI 10.1108/JFRA-03-2013-0012
JFRA 1. Introduction
11,1 The practice of zakat (Arabic: zakāt or zakāh) is one of the main tenets in Islam and it is
compulsory for every Muslim to commit towards performing zakat. Linguistically, the
word zakat refers to an act to cleanse or purify something that is dirty while, theologically,
it refers to spiritually purifying one’s soul through the act of zakat. In legal terms, zakat is
referred to as the act of giving away a portion of your wealth to certain groups of people
52 under certain circumstances (Abdul Wahab and Abdul Rahim, 2011). Muslims generally
take all three views in reference to zakat; that is, an act where one would give away part of
his or her wealth to a certain segment of the population as a means to purify one’s wealth
and soul. The rate of charge for zakat is generally 2.5 per cent on items that are qualified to
be charged for zakat as mentioned in the Holy Quran (Al-Quran, 21:73; 17:26-29). However,
the 2.5 per cent is not absolute as the rate could be different depending on the form of
property being paid as zakat. It is also interesting to note that this religious commandment
also exists in other religions than Islam, including Christianity and Judaism. For example,
in the Bible[1] (Luke 18:12) concerning tithe “I fast twice a week and give a tenth of all I get.”
The similarity is in term of transferring some amount of money from the rich to the needy,
although it is important to note that in Islam, the objectives or maqasid encompasses
a wider spectrum compared to others.
However, unlike the practise of tithing, zakat collection is distributed to very
specific groups of people called asnaf and may not be distributed to anyone else. Due to
the complexity in collection and specific nature in the distribution of zakat, it is often
found that there is a need for a specific body to properly manage its distribution and
collection. Normally, such a task would fall upon the shoulders of the government of an
Islamic state, as in the case of Malaysia, where the management of zakat has always
been under the privy of the local state governments under the direct jurisdiction of the
Sultan or the head of state. These state governments would then establish specialized
bodies or zakat agencies to collect and manage zakat funds while also organizing
events or activities to channel these funds to those who are in need.
In channeling zakat funds, the state zakat authorities would organize various
programmes targeted towards the various Shariah ordained zakat recipients – the
asnaf. The Entrepreneurial Asnaf or Usahawan Asnaf programme is one such
programme that is specifically intended to help the asnaf to be involved in business so
that they will be able to extricate themselves from their current predicament and
possibly become zakat contributors themselves. However, whenever a new programme
with respect to zakat distribution is created, there is always question concerning
whether the programme created is actually beneficial to the target recipient. Usually,
any programme organized by a government backed organization is planned top-down
and could possibly be formulated without actually knowing the needs and wants of the
targeted group. As a result, these programmes may end up being elaborately designed
but, unfortunately, provide no or little benefit to the asnaf at all.
Therefore, it is imperative to get some feedback from the asnaf themselves concerning
what is actually helpful to their success. Notwithstanding that past research has indicated
that capital, knowledge and training does provide some measure of success, given a
different contextual setting, such as the situation of the asnaf, the outcome may be different.
The information gained from such feedback would be invaluable to Selangor Zakat Board
and the zakat payers in general, in which they can see to a certain degree how efficiently and
effectively the fund they contributed is used in fulfilling their Shariah obligations.
The zakat funds are limited and it is imperative to ensure that the most mileage (in terms of Success of
developing successful entrepreneurs) is gained from the utilization thereof. entrepreneurial
The most visible issue, among others, when it comes to starting up a business is
capital, and the issue becomes more complicated when the potential entrepreneur does asnaf
not have collateral that can be pledged to the bank for obtaining credit (Abd Rahman and
Ahmad, 2011; Widiyanto and Ismail, 2010; Abdul Wahab and Abdul Rahim, 2011;
Muhamat and Rosly, 2011; Kasim, 1990), lack of proper education (Robinson, 1994), no or 53
little experience in business activities (Abd Rahman and Ahmad, 2011; Ibrahim, 2005
(cited in Abd Rahman and Ahmad (2011)); Muhamat and Rosly, 2010; Wickramansinghe
and Sharma, 2005) and in terms of personality far from the image of a convincing
entrepreneur (Abd Rahman and Ahmad, 2011; Rauch and Frese, 2007). These traits are
all possessed by the asnaf who want to be involved in the asnaf entrepreneurial
programme. As such, the only criterion that they can build up by themselves is
motivation, which is their desire to become a successful entrepreneur and to transform
their lives. One has to note that desire alone will not bring success albeit desire will be the
last bastion when it comes to emotional distress. The study employs three variables to be
examined – capital, training and knowledge – because these are the three main
components that will be emphasised by the Lembaga Zakat Selangor (LZS) and any
government agency (which is involved in nurturing new SME entrepreneurs) in order to
equip the potential entrepreneur with the basic skills in business. One notes that these
important factors are stressed when perusing the web sites of LZS and SME Corp[2].
Although Abd Rahman and Ahmad (2011) have evidenced that capital is not the sole
factor that will influence the success of the entrepreneurial asnaf programme (which we
agree to some extent) but we believe that these three variables; capital, knowledge and
training are the main pillars to start and to sustain the business until it grows and
matures. This is supported by the information from the LZS and SME Corp web sites.
The element of improvement and innovation will only take place when the business
proceeds to the later stage, which means other variables must be considered.
In light of the above, it is the objective of this research is to study the factors that
contribute to the success of the asnaf entrepreneurs’ programme from the point of view
of the asnaf. Although we acknowledge that the factors that contribute towards the
success of an entrepreneur are many, in the interest of making this research
manageable, we only focus on the three main factors mentioned above and will leave
the other factors to a later study. This study also makes special reference to the study
done by Abd Rahman and Ahmad (2011), which was conducted in Bahasa Malaysia
that touched on a similar topic and was independently done at about the same time as
this study. It is the desire of the researchers to have this study complement
Abd Rahman and Ahmad (2011) for the betterment of the overall zakat system.

2. Literature review
The literature review will attempt to briefly introduce the Selangor Zakat Board, address
the concept of zakat and the dependent variables that have an impact on the asnaf ’s opinions
on what would enable them to be successful based on the findings of past researchers.

2.1 Selangor Zakat Board

LZS or the Selangor Zakat Board is one of the leading zakat collection agencies in Malaysia
and specifically serves the State of Selangor. It first began its operations in 1994 as an
JFRA independent and privately owned company using the name MAIS Zakat Sendirian Berhad
11,1 (MAIS Zakat Pte. Ltd), which was owned by Majlis Agama Islam Selangor or the
Selangor State Islamic Council (MAIS). In 1996, MAIS Zakat was renamed as
Pusat Zakat Selangor (Selangor Zakat Centre) and in the following year, it was given
the mandate to collect all forms of zakat including zakat fitrah – a type of zakat that is
obligatory to all Muslims and is specifically collected during the fasting month of
54 Ramadhan – on top of its existing zakat collection functions. The centre recently
upgraded its status from a privately owned company to an incorporated body under the
Trustee (Incorporation) Act 1952, and was again renamed as LZS (Selangor Zakat Board).
The elevation of status from a mere “centre” to a “board” reflects its broader functions,
capability and trust given towards the institution in administering the process of zakat
throughout the State of Selangor.
The state zakat agencies have been continuously developing innovative programmes
in order to raise the standard of living of its asnaf or the eight groups of people that qualify
to be given zakat distribution. The main objective is to extricate the recipients from
poverty so that one day they would be able to pay zakat by themselves. For example, one of
the innovative programmes introduced by the Selangor Zakat Board is usahawan asnaf or
entrepreneurial asnaf, a programme where zakat funds are distributed to the needy in the
form of funding to assist business formation and training. Interestingly, Mohd Balwi and
Abd Halim (2008) pointed out that the Selangor Zakat Board has sort of pioneered the
entrepreneurial asnaf concept before it was followed by other Islamic state councils, such
as Kuala Lumpur and Negeri Sembilan. Today, all state zakat management boards have,
in some form or another, an entrepreneurial asnaf programme in place.
In selecting the candidates for this programme, the Selangor Zakat Board claims to be
following a stringent procedure in selecting the right individuals to participate. One is
considered eligible when he or she has proven to have the capability, strong passion for
business, and is also physically fit. Financial assistance will be dependent on the type of
business and can be categorized into two: less than RM5k and more than RM5k to RM50k.
In addition to financial assistance, those who are selected will be trained concerning the
concepts of marketing, personal development and entrepreneurship (www.e-zakat.com.
my) to ensure that they are also mentally prepared to indulge in entrepreneurship. The
progress of these participants is also closely monitored by the staff of the Selangor Zakat
Board (www.e-zakat.com.my/program-asnaf/ (accessed 17 May 2012)).

2.2 The concept of Zakat

As mentioned earlier, zakat is one of the five tenets of Islam and is a cornerstone or a key
aspect of the Muslim economy, as propagated by Metwally (1997), as cited in Kusuma
and Sukmana (2010). In Islam, the accumulation of wealth is encouraged but under the
premise that a part of such wealth should be shared with those who are in need. Ideally,
the accumulation of wealth and the practise of zakat should eradicate one of the most
perennial problems within any society – poverty (Adnan and Abu Bakar, 2009).
Sharia states that funds collected from zakat can only be distributed to a particular
group of people called asnaf. The Quran states that there are eight groups of people that
fall under the asnaf. The first group of people are called fakir (the destitute) where
an individual is known to have no means of income or wealth to support his or her self
and family daily needs. Next, are the poor, individuals that have some form of
income but whose income is unable to sufficiently support their basic needs, such as
clothing or food. The third group is the Amil, or those who are entrusted by the Success of
government to collect zakat on its behalf. The fourth group are the Muallaf – people who entrepreneurial
have just embraced Islam as a religion, while the fifth group are the Riqab or those who
are trying to free themselves from the shackles of slavery. The sixth group are the asnaf
Gharimin. These are the people who are in debt and need help in sustaining their basic
needs. This is followed by the Ibnusabil or people who are travelling and are stranded at
a particular place with no money to continue their travel. Finally, the money can also be 55
used by those who are striving to work in the path of Islam (Fisabilillah). The quantum of
how much a recipient should receive from zakat is not specifically mentioned.
Traditionally, zakat is compulsory for every qualified Muslim and Muslim owned
business. In recent years, the scope has broadened to include institutional payers like
companies and corporations as well (Adnan and Abu Bakar, 2009). Zakat is calculated
differently from income tax or corporate tax. Generally, from an accounting treatment
point of view, the calculation of zakat is derived from the information on the balance
sheet by looking at the position of an individual or company’s assets and liabilities,
whereas, in a normal taxation scheme, tax is calculated based on items found in the
income statements, such as net profit or income generated (Hamat, 2009). In other
words, zakat focuses on one’s wealth whereas tax focuses on one’s income.

2.3 Capital
Sourcing and obtaining a start-up business capital has always been one of the most
challenging issues for potential entrepreneurs. This is mainly because many financial
institutions are quite reluctant to deal with small enterprises due to their perception that
loans given to this group of entrepreneur present a high risk of non-performing. Business
start-up capital is the money required to initiate a new business venture. The provision of
money is generally regarded as an initiative to micro-enterprises (SMEs) to start or to
reinforce existing businesses and any early success achieved by these entrepreneurs
would greatly improve the operational efficiency and effectiveness, and, subsequently,
lead to improvement in the organization’s performance, hence, alleviating poverty among
them (Widiyanto and Ismail, 2010). Widiyanto and Ismail (2010) further explained that
capital is a succession of critical elements for any business to be successful, apart from
labour expertise, technology and other inputs; the resulting growth in income, would, in
turn, allow the poor to acquire the basic necessities in life, such as food, education and
health. Abdul Wahab and Abdul Rahim (2011, p. 43) state that, “zakat or the transfer of
ownership of specific property to specific individuals under specific conditions” is the sole
funding for business creation and development for LZS, and is distributed to support
entrepreneurial programmes through joint ventures between the board and with qualified
asnafs (the poor, the needy and muallaf ) in the state. According to Ahmad and Ahmad
(2009), there is a demand for Islamic financial products and services due to their overriding
objective of social benefit maximization as opposed to profit maximization. To the poor,
the capital provided by LZS is viewed as a motivational injection and opportunity for them
to venture into business amid the restriction of securing loans from banks.

2.4 Knowledge
Knowledge is a key feature for small and medium entrepreneurs that are competing
in the global market, especially for new entrants (Omerzel and Antoncic, 2008). Jusoh et al.
(2010) pointed out that it has played an important role in economic growth, while Omerzel
JFRA and Antoncic (2008) denoted it as a basis for sustainable competitive advantage, and
11,1 Burns et al. (2011) regarded it as a very important asset for entrepreneurs. Omerzel and
Antoncic (2008) stated that knowledge is the defining factor to distinguish entrepreneurs
from their competitors and that those with better knowledge would be more efficient and
able to learn and grasp the changes in the market faster. Organizations that possess
high knowledge quality would perform the job better and produce new and valuable
56 products and services, reduce expenditure, enhance sales, increase analytical ability,
elevate method efficiency and escalate performance (Yoo et al., 2011). The capability to
build, transmit and administer knowledge form the core of product development and
manufacturing processes that serve as a foundation for entrepreneurs to compete in the
new market economy (Burns et al., 2011). Acquiring job-related proficiency and practical
know-how through repeated work processes, which, subsequently, lead to efficiency
enhancement of the firm, are vital elements to achieve profitability, whilst self-confidence
and education are crucial for the development of the firm (Omerzel and Antoncic, 2008).
Jusoh et al. (2010) explained that there are four mechanisms that constitute knowledge
for firms – knowledge concerning organizational practices, knowledge concerning
assortment of products, knowledge pertaining to the willingness of the markets and
customers to pay for dissimilar merchandise characteristics and knowledge relating
to R&D processes. Entrepreneurs require a specific method to obtain knowledge and
they would normally learn from what they know best instead of something new or
undiscovered, thus knowledge limitations and the belief in one’s problem-solving skills
often denote a major barrier to success (Omerzel and Antoncic, 2008).

2.5 Training
Training is an activity that changes people’s behaviour; with training and development,
a company is able to utilize its human resources to accomplish the organization’s
objectives as well the employees’ individual objectives (Ghosh et al., 2011). They then
further mentioned that the aim of training is to inspire people to master the know-how,
skills and behaviours that are highlighted in training modules and to apply them in their
daily activities. Education and learning are essential in economic development; both are
critical elements in averting the prospect of high levels of long-term unemployment and in
preserving the absorptive ability of innovative organizations (De Faoite et al., 2003).
Learning is a process to enhance one’s skills in performing a specific function (Ghosh et al.,
2011), while Higgins and Elliot (2011) consider it as an influential element in opportunity
identification that is closely related to entrepreneurial success. Sarri et al. (2010) mentioned
that the dynamic development of learning would facilitate the enactment of
entrepreneurial activities. Higgins and Elliot (2011) described learning as the varying
abilities that entrepreneurs need to effectively retrieve the latest information and attribute
meaning and context. The significance of education and training in respect of economic
growth is well documented in the literature whereby training is now viewed as an
important element in intellectual capital development; employees are no longer considered
as an economical burden but as income generators to the company (De Faoite et al., 2003).
Lourenco and Jayawarna (2011) added that creativity and imagination are essential in
entrepreneurial development, which is exemplified by inadequate resources and high
levels of ambiguity. Higgins and Elliot (2011) emphasized that small entrepreneurial
companies are always referred to as the dynamic force of economic growth due to their
diversity and flexibility, while Lourenco and Jayawarna (2011) added that fostering
enterprising skills through entrepreneurship education and formulating training courses Success of
with the purpose of nurturing the creative ability of nascent entrepreneurs, influences the entrepreneurial
intention to start-up businesses directly and indirectly.
asnaf
3. Methodology
The research was conducted using a structured questionnaire designed to answer the
research objectives. The questions were divided into two parts, with the first part 57
consisting of five questions that focused on the demographic profile of the respondent. The
second part of the questionnaire focused on all four variables mentioned by the objectives
(three independent variables and one dependent variable) and employed a five-point Likert
scale to measure the response of the asnaf concerning the variables mentioned. A score of
1 would indicate that the respondent absolutely disagree with the statement given while a
score of 5 would indicate that the asnaf absolutely agree with the statement. Anything in
between would be scored either 2, 3 or 4 depending on the respondent’s level of agreement
with statement. The higher the score the higher the level of agreement. Each variable
would have four questions making a total of 16 questions for all the independent and
dependent variables. Each of the variables will have its scores added up and averaged to
give an overall indication of how a respondent feels concerning a particular variable.
The questionnaire was distributed by area sampling, as the targeted area for this
study is in the Klang Valley, to be specific, the Districts of Klang and Petaling. The units
of analysis are the recipients of the capital assistance from the state alms organization.
The total number of recipients of alms in these two districts for the year 2011 comprised
5,438 family units. Capital assistance is one of the several types of assistance that the
recipients received from the LZS. Therefore, to ensure that the sample size was relevant,
the number of questionnaires distributed totalled 100 following the rule of thumb
proposed by Roscoe (1975), which indicates that it is appropriate to have a sample size of
larger than 30 and less than 500 to minimize committing Type II errors. In addition,
based on the online sample size calculator developed by Creative Research Systems,
a sample size of 100 and a population of 5,438 would entail a confidence interval of 9.71
at the 95 per cent confidence level (www.surveysystem.com/sscalc.htm).
The questionnaire was designed using past literature that is related to the objective
of the study. Each questionnaire was assigned a serial number to avoid redundancy,
which could affect the result. The questionnaire was set up in a bilingual format and
the translation process of the questionnaire from Bahasa Melayu to English and vice
versa was executed in order to ensure consistency. Even though there was no urgent
need to have a bilingual questionnaire since most of the respondents are from a low
academic background, the bilingual format was adopted for easy reference by other
interested parties. The results were then analysed with SPSS version 16 software to
test the reliability, correlation and descriptive analysis. An analysis of covariance
(ANCOVA) of all information gained was also done to provide a clearer picture
concerning all the relationships uncovered through this research.

4. Findings
This section seeks to provide insights into the responses given by the asnaf
entrepreneurs pertaining to factors that impact their success. Analysis begins with a
descriptive analysis of the respondents followed by reliability analysis of the questions
posed in the independent variables. We will then look at the correlations between the
JFRA independent and dependent variables before ending with regression analysis and
ANCOVA using all the information available from the study.
11,1
4.1 Descriptive analysis
From Table I we find that there are more male respondents compared to female with
58 male zakat recipients and 42 female. The majority of them are rather young being in
58 the age group of 26-35 years followed by the 36-45 years age group at 28 per cent and
the 18-25 year olds. In terms of education background, only 18 per cent managed to
complete their study at the tertiary level.

4.2 Reliability test

The overall reliability test on all the questions within the dependent variable resulted
in a Cronbach’s a of 0.803. Generally, the closer the reliability is to 1.0, the better. This
indicates that the questionnaire formulated has a rather good internal consistency and
the respondents have a fairly similar understanding of the statements and terminology
used in the questionnaire distributed. The results of the same test done on each
individual dependent variable can also be seen in Table III. Although the result varies
between 0.648 and 0.844, the reliability level of all of the dependent variables remains
acceptable for the study (Table II).

4.3 Correlation analysis

A Pearson product moment correlation describes the relationship between variables. The
main result of a correlation is called the correlation (or “r”). It ranges from 2 1.0 to þ 1.0.
The closer r is to þ1 or 2 1, the more closely the two variables are related. If r is positive, it

Freq. % Valid % Cumulative %

Sex
Male 58 58 58 58
Female 42 42 42 100
Total 100 100 100
Age
18-25 years 23 23 23 23
26-35 years 30 30 30 53
36-45 years 28 28 28 81
46 years and above 19 19 19 100
Total 100 100 100
Academic qualification
Degree 3 3 3 3
Diploma 15 15 15 18
SPM 59 59 59 77
PMR 20 20 20 97
UPSR and others 3 3 3 100
Total 100 100 100
Income
RM100-RM500 22 22 22 22
RM501-RM1,000 58 58 58 80
RM1,001-RM1,500 17 17 17 97
Table I. RM1,501 and above 3 3 3 100
Descriptive analysis Total 100 100 100
means that as one variable gets larger, the other will also get larger. If r is negative it Success of
means that as one gets larger, the other gets smaller (often called an “inverse” correlation). entrepreneurial
As seen in Table III, the correlation coefficient between capital and successful asnaf
entrepreneur is 0.549 with a two-tailed significance score below 0.05 at the 95 per cent asnaf
level of confidence. The score obtained generally indicates that the relationship
between capital and successful entrepreneurs is positively related, which means that
an increase in capital would have an increase in the success of an asnaf entrepreneur. 59
A correlation coefficient score of 0.549 indicates that the strength of this relationship is
moderately strong.
Next, we look at the relationship between training and asnaf entrepreneur success.
From Table III, we find that the correlation coefficient between training and successful
asnaf entrepreneur is 0.229. Since the number obtained is positive, we can safely
conclude that there is a positive relationship between training with developing
a successful asnaf entrepreneur. However, since the correlation coefficient score is
0.229, which is rather low, it indicates that the strength of the relationship is weak. In
addition, Table III also shows that the significance level of this relationship is 0.022;
which is less than the cut-off point of 0.05. Since the researcher was using a 95 per cent
level of confidence, we conclude that the correlation is significantly related.
The final correlation coefficient score in Table III is between knowledge and
developing a successful asnaf entrepreneur. Based on the respondent’s feedback, we
obtained a score of 0.415 with a significance score of 0.00 at the 95 per cent confidence
level. From the score, we can deduce that there is a positive relationship between the
asnaf knowledge and his/her success but that the strength of the relationship is
moderately strong while the relationship is significant.

4.4 Regression analysis

The Pearson product moment correlation used for the analysis above is good for
providing an indication of the relationship and the strength of such a relationship
between two variables. It could not, however, tell us how much of a change we would see
in a dependent variable should we increase the independent variable by a certain figure.

Variable No. of items Cronbach’s a

Capital 4 0.648 (acceptable)

Training 4 0.714 (acceptable) Table II.
Knowledge 4 0.844 (good) Reliability test for capital,
Entrepreneur success 4 0.770 (acceptable) courses and knowledge

Asnaf success Capital Training Knowledge

Asnaf success 1
Capital 0.549 * * 1 Table III.
Training 0.229 * 0.301 * * 1 Relationship between
Knowledge 0.415 * * 0.444 * * 0.262 * * 1 capital, training,
knowledge and asnaf
Note: Correlation is significant at: *0.05 and * *0.01 levels (two-tailed) entrepreneur success
JFRA For example, if the score for capital is increased by 1 per cent we would not be able to
11,1 determine the percentage increase in the corresponding successful asnaf entrepreneur
score.
Therefore, in order to see the impact of such interaction and to also explore the
relationships between the independent and dependent variable further, a regression
analysis is done on the data obtained (Table IV). For the purpose of this research,
60 regression is done using the stepwise method. The stepwise method ensures that only
the variables that actually have a significant impact on the variations seen in the
dependent variables are taken into account in addition to minimizing any collinearity
incidences within the regression model. Although from the previous section we could see
that all three dependent variables are significantly related to the independent variable,
this does not necessarily mean than all three need to be in the regression equation in
order to get some form of information concerning the relationships between these
variables. To help us select which variable is totally and absolutely relevant, the
stepwise method is found to be appropriate.
From Table V we can see that two models can be used to explain the variations
found in asnaf’s entrepreneurial success. Model 1 states that capital is the only variable
that is relevant in explaining the success of an asnaf while Model 2 indicates that
capital in addition to the existing knowledge of the asnaf is included in the regression
model. In both models, training is excluded from the regression model. We decide to use
the second model on the basis that the model has a higher adjusted R 2 score at 0.324.
This indicates that the two main variables that significantly predict asnaf’s
entrepreneurial success are capital and the asnaf’s knowledge, which together explain
32.4 per cent of the variations found in the said independent variable.

R R2 Adjusted R 2 SE of the estimate

Model 1 0.549a 0.301 0.294 0.49498

Table IV. Model 2 0.581b 0.338 0.324 0.48431
Regression analysis
results – model summary Notes: aPredictors: (constant), capital; bpredictors: (constant), capital, knowledge

Unstandardized Standardized
coefficients coefficients
B SE b t Sig.

Model 1
(Constant) 0.999 0.374 2.674 0.009
Capital 0.674 0.104 0.549 6.495 0.000
Model 2
(Constant) 0.649 0.396 1.640 0.104
Capital 0.558 0.113 0.454 4.919 0.000
Knowledge 0.210 0.091 0.214 2.317 0.023
Table V.
Regression coefficients Note: Dependent variable: developing_successful_asnafasnaf_entrepreneur
4.5 Analysis of covariance Success of
In an attempt to gain further insights, the demographic data obtained from this research entrepreneurial
is also used to shed further light on the factors that can predict the success of an asnaf
entrepreneur. Since the data that are available at hand are a mix of categorical and asnaf
continuous data (categorical being the demographic data while continuous data were
obtained from the questionnaire) an ANCOVA using the general linear model function in
SPSS 16 is found to be the best tool to accommodate the data available. All demographic 61
data are assigned as factors while continuous data are assigned as covariates along with
an assumption of no interaction between the factors (demographic variables). Therefore,
the analysis only focuses on the main effects while ignoring any interaction effects
within the analysis. The results of our analysis are in Table VI.
As found in the previous regression analysis, Table VI indicates that at the
0.05 significance level, even when viewed in light of demographic factors, capital and
asnaf’s knowledge are found to be significant factors in contributing to the success of
asnaf entrepreneurs. In addition, the inclusion of demographic factors does not impact
the ability to better explain the variations seen in the success of asnaf entrepreneurs
as we see a reduction in the adjusted R 2 score from 0.332 in the regression analysis while
an adjusted R 2 score of 0.319 is observed in the general linear model or ANCOVA.

5. Conclusion
The study indicates that, generally, the variables, such as knowledge, capital and
courses can influence the success rate of the asnaf business programme. While these
three variables do have a significant effect on the success of asnaf, special attention
should be given to the aspects of capital adequacy and asnaf’s knowledge in helping
these asnaf to be successful in their business. Only once these two issues have been
properly addressed, can focusing on relevant courses to help these asnaf be given
attention. Since the sample size is rather small there are undoubtedly weaknesses in
the design and sampling of the data, one must exercise caution in making
generalizations from this research. It is interesting to note that the findings have
confirmed the slightly earlier study conducted by Abd Rahman and Ahmad (2011)
concerning the need to focus on other aspects than capital assistance, such as training

Source Type III sum of squares df Mean square F Sig.

Corrected model 14.037a 13 1.080 4.572 0.000

Intercept 0.510 1 0.510 2.159 0.145
Sex 0.253 1 0.253 1.073 0.303
Age 0.765 3 0.255 1.080 0.362
Academic qualification 0.414 3 0.138 0.585 0.627
Income 0.134 2 0.067 0.283 0.754
Capital 3.220 1 3.220 13.633 0.000
Training 0.189 1 0.189 0.799 0.374
Asnaf’s knowledge 1.565 1 1.565 6.625 0.012
Error 20.311 86 0.236 5 6
Total 1,193.750 100 7 8 9 Table VI.
Corrected total 34.348 99 10 11 12 GLM or ANCOVA on all
available information
Notes: R 2 ¼ 0.409 (adjusted R 2 ¼ 0.319); dependent variable: asnaf entrepreneur success from the research
JFRA and relevant knowledge. Nevertheless, this study has hopefully given some interesting
11,1 insights to other interested parties and should provide a solid base for future studies to
pick up from. It is with sincere hope that one day we can have a model that can assist
LZS in efficiently expediting their efforts in helping the needy.

Notes
62 1. Bible (King James Version).
2. www.smecorp.gov.my/v4/

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entrepreneurs’ capabilities through entrepreneurial learning in an emerging market”,
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Mohd Balwi, M.A.W., Che Abdullah, A.S., Abd Halim, A.H. and Mohamad, N. (2008),
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Selangor: satu sorotan”, Seminar Keusahawanan Islam II, Peringkat Kebangsaan.
Singapore Government (n.d.), A Guide to Zakat Islamic Religious Council of Singapore, available
at: www.muis.gov.sg/cms/services/zkt.aspx?id¼2232

Corresponding author
Amirul Afif Muhamat can be contacted at: amirulafif@salam.uitm.edu.my

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