The purpose of this paper is to investigate the impact of service quality on zakat stakeholders’ satisfaction using an enhanced model appropriate for zakat institutions. A new and enhanced model (a combination of SERVQUAL and CARTER) was used to examine the impact of service quality towards satisfaction from the perspective of zakat stakeholders. Data were collected from 799 respondents amongst zakat payers and recipients. The paper utilizes the Structural Equation Modelling (SEM) in examining the impact of service quality towards satisfactions. The result show that Responsiveness & Compliance are the strongest indicators influencing the satisfaction of the payers while Reliability is the strongest indicator influencing the satisfactions of the zakat recipients. The result of this study will be useful for zakat authority responsible for ensuring service delivery by the institutions.
Keywords: service quality, structural equation modelling (SEM), zakat institution