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This paper presents a theoretical approach and an empirical study that demonstrate how the Islamic economic principle, Zakat, can achieving an ideal distribution of wealth. Indeed, if some researches allowed to develop the theory of distribution of wealth in Capitalism or Marxism context, the present research has a new contextual perspective, which is to introduce and implement the Islamic economic model from where emerges the notion of Zakat that plays an imminent role in decentralizing wealth as well as in resolving socioeconomic issues, such as poverty and economic inequalities among people. This statement will be confirmed throughout this paper and will be illustrated by the fact that Zakat have had a significant impact on balancing the economic wealth within society during the precolonial.

Previous studies on Zakāh administration have addressed the issue of distribution of Zakāh funds to reduce the sufferings of the poor. The purpose of this work, however, is to argue for a change from Zakāh distribution to capacity building approach so as to change the condition of the poor and the needy from being Zakāh recipients to Zakāh payers. The fact remains that Nigeria is a rich nation but its people are poor. Many factors have been adduced to be the causes of poverty and perennial insurgency in Nigeria. It is observed that Zakāh is not administered as it ought in Nigeria. The study proffered efficient Zakāh institution as an effective antidote to curb the menace of poverty and insecurity. The paper argues through poverty alleviation model that if Zakāh is properly managed and disbursed judiciously, many destitute would be saved from the cloak of unscrupulous politicians and half-baked scholars who use them to destabilize the country. The study also believed that if Zakāh authority could be sending the poor to training centers to gain certain skills or financing their children’s education; this would improve their living condition. The study utilized historical and ideological framework, while relying on secondary sources.

One of Zakat’s main objectives is to help eliminate poverty and famine. And in Shari’ah, the obligation of zakat payment is elaborated which if not maintained holds severe consequences. Zakat has its unique features of supporting the poor in providing a collateral free financial stability. The main socioeconomic factors in all the developing Muslim countries are poverty, unemployment and economic inequality which results in not meeting the basic needs of the poor. In a country like Bangladesh consisting of Muslim Majority, although governmental and nongovernmental institutions collect and distribute zakat yet the ultimate goal of zakat is not attained completely. At present, modern Islamic jurists reinforce the notion of microfinance investment through the collection and usage of zakat money. This paper consists of a static ground for the poverty removal creating a financial institution which is equally responsible as those present in Bangladesh but with a different route in eliminating poverty where schemes can be initiated along with opening opportunities of employment. Finally, it also surfaces the model in investment of zakat fund through IBZH with opinions of Islamic jurists. This Islamic Banks Zakah House (IBZH) is an amalgamated forum of the present eight established private Islamic banks of Bangladesh