Optimizing Productive Zakat Funds in Overcoming Unemployment of the Young Generation of Muslims through the Creation of New Entrepreneurs

Abstract

Indonesia is currently experiencing a demographic bonus characterized by a high proportion of productive-age population, which presents both opportunities and challenges, particularly related to youth unemployment. Among Muslim youth, limited access to employment opportunities and capital has become a critical issue that requires innovative and sustainable solutions. In this context, productive zakat emerges as a strategic instrument of Islamic social finance aimed at empowering mustahik through economic activities rather than consumptive assistance. This study aims to analyze the optimization of productive zakat funds in addressing youth unemployment through the creation of new entrepreneurs. The research employs a literature review method by examining national and international scholarly articles published within the last five years related to productive zakat, youth entrepreneurship, Islamic microfinance, and economic empowerment. The findings indicate that productive zakat distributed in the form of business capital, training, and continuous mentoring significantly contributes to increasing entrepreneurial capacity, strengthening micro and small enterprises, and generating new employment opportunities. Moreover, the integration of Islamic financial institutions, digital technology, and stakeholder collaboration enhances the effectiveness and sustainability of productive zakat programs. This study concludes that optimizing productive zakat through structured management, capacity building, and technological integration can serve as an effective strategy for reducing Muslim youth unemployment and fostering inclusive and sustainable economic development.