Conditional Cash Transfer in Zakat Distribution: Model Development and Empirical Validation

Abstract

Behavioural issues among asnaf contribute to persistent poverty and limit the effectiveness of zakat distribution. Adapting the globally proven Conditional Cash Transfer (CCT) model offers a structured approach to enhance its impact. This study developed, validated, and empirically tested a CCT model for zakat distribution that integrates a newly developed religious conditionality with adapted educational, health, and employment conditionalities. The instrument, comprising 66 items across six constructs, was validated through expert assessment and empirical testing involving 16 experts and 447 respondents. Content validity was strong, with a Content Validity Index (CVI) of 0.98, Kappa scores (0.87–1.00), and a Face Validity Index (FVI) of 0.97. The measurement model assessment confirmed excellent reliability and validity, with all factor loadings and Cronbach’s alpha values above 0.6, Average Variance Extracted (AVE) exceeding 0.5, and Composite Reliability (CR) above 0.7. The structural model further demonstrated the empirical robustness of the instrument, testing eight direct hypotheses—four of which were supported and
two partially supported. Results revealed that the newly introduced religious conditionality had significant positive effects on human capital development in education (β = 0.124, p = 0.015) and health (β = 0.113, p = 0.021), through its direct effect on poverty reduction was not significant. Overall, this study establishes a comprehensive and empirically validated framework for conditional zakat distribution, demonstrating how integrating behavioural and religious conditionalities can promote positive behavioural change, enhance accountability, and foster sustainable empowerment—ultimately supporting poverty reduction and human capital development in line with the Sustainable Development Goals (SDGs).