scholarly journals Innovation of Risk Mitigation Model for Islamic Equaty-Based Financing in Islamic Microfinance Institutions in Indonesia

2021 ◽  
Vol 124 ◽  
pp. 10004
Author(s):  
Muhammad Pisol Bin Mat Isa ◽  
Naelati Tubastuvi ◽  
Sri Wahyuni ◽  
Maran Marimuthu ◽  
Ridhuan Tony ◽  
...  
Keyword(s):  
Business Strategy ◽  
Financial Institution ◽  
Risk Mitigation ◽  
Structured Interview ◽  
Payment System ◽  
Business Failure ◽  
Microfinance Institutions ◽  
Microfinance Institution ◽  
Islamic Microfinance ◽  
Selection Of

Islamic Microfinance institution (MFI) funded either by government or private financial institutions are playing an instrumental role in discharging business fund to the eligible micro entrepreneurs (ME). The potential of micro entrepreneurs to succeed in their business is always becoming a central issue, this is due to the ability to manage the business strategy in a sustainable manner. The fund transacted in micro financing industry is small in term of quantity, therefore it also generates small profit to both parties MFI and ME, it may not be profitable in the eye of financial institution such as bank or Microfinance institution such as Baitul Mal wa Tamwil, moreover the financing risk is always high because some of the financing given without proper risk mitigation could lead into financial failure. The above reasons have influenced most of the MFIs’s decision to abstain from providing equity-based financing, where the concept very much suitable and workable to bring out the groups of MEs from poverty list in comparison to debt-based financing. Equity-based financing require bigger commitment and intervention from MFI in business in term of coaching, training and managing cash flow of the business. Islamic equity-based financing is about profit and loss sharing (PLS) financing. Where both parties have to bear financial consequences in the event of business failure. The failure in business would cause non-performing financing (NPF) to the financial institution and could effect the financial position for that particular year of report. The continuous NPF to the MFI can risk the company future plan. Thus, this study aimed to explore the mechanism of risk mitigation for equity-based financing which can be adopted by Islamic microfinance institutions around the would. The mechanism used to suggest in area of governance, selection of entreprenuer, financing arrangement, payment system and business business sectors. The study applied content analysis to collect the history data of equity-based financing as offered by BMT and MFIs in Indonesia, the data informed researcher on the success and failure story, the study also applied structured interview with managers who are responsible on risk mitigation. The study found that BMT and MFIs in Indonesia are well-organized, the governance and selection of entreprenuer are palying significant role while the payment system which includes the collatoral against any negligence posits an effective way in mircofinance mitigation model.

scholarly journals Total Quality Management Development and Sharia Governance Efforts in Sharia Micro Financial Institutions to Improve Market Share

2019 ◽  
Vol 2 (1) ◽  
pp. 27-35
Author(s):  
Ervicaninda Herry ◽  
Pramudia Yuli Eka Permana ◽  
Wisnu Bayu Aji ◽  
Ridan Muhtadi
Keyword(s):  
Quality Management ◽  
Total Quality Management ◽  
Market Share ◽  
Good Governance ◽  
Financial Institution ◽  
Supervisory Board ◽  
Microfinance Institutions ◽  
Total Quality ◽  
Microfinance Institution ◽  
Islamic Microfinance

An important pillar in the development of Islamic microfinance institutions is Total Quality Management and Sharia Governance. This pillar is the main differentiator between conventional Islamic finance institutions. Institutional efforts to provide satisfaction to customers. The concept of quality (quality) for service and non-service basically includes various things that are focused on the customer. Shari'ah supervision is needed to ensure the implementation of Shari'ah principles in the financial institution, which is played by the Shari'ah Supervisory Board. Implicitly this shows that the practice of shari'ah microfinance institutions has not been concerned with shari'ah principles and the quality of good governance, one of the causes of reputation and public trust in Islamic microfinance institutions will also have an impact on community loyalty use the services of a Shari'ah microfinance institution. Improved reputation and customer trust can be used as an indicator of the success of the development of Islamic microfinance institutions and at the same time predicting their future success in order to increase market share.

scholarly journals The Role of Islamic Microfinance For Poverty Alleviation in Bandung, Indonesia

2019 ◽  
Vol 2 (1) ◽  
pp. 55
Author(s):  
Irawan Febianto ◽  
Fuadah Binti Johari ◽  
Zurina Binti Kefeli @Zulkefli
Keyword(s):  
Poverty Alleviation ◽  
Financial Institution ◽  
Capital City ◽  
Primary Data ◽  
Microfinance Institutions ◽  
Poverty Level ◽  
Level Indicator ◽  
Microfinance Institution ◽  
Islamic Microfinance ◽  
The Impact

The emergence of Islamic micro financial institution becomes the alternative solution for the micro-entrepreneurs who need working capital assistance. However, the impact of Islamic microfinance institution in reducing poverty level is somewhat still debatable. In Indonesia, Islamic microfinance established through the presence of Baitul Mal wa Tamwil (BMT), the most popular type of Islamic microfinance institutions. BMT providing financing for the micro-entrepreneurs, as their potential clients, that operates their activities mostly at the traditional markets. The purpose of this study is to measure the impact of BMT for poverty alleviation in Bandung as the capital city of West Java as the biggest population province in Indonesia, not only based on material level but also on spiritual level. This study is looking at income variables of micro-entrepreneur’s household, as well as the spiritual level indicator of micro-entrepreneur before and after they received financing from BMT. The primary data obtained through in-depth questionnaires in Bandung, Indonesia.

scholarly journals Akad Tijarah Dalam Praktek Di Lembaga Keuangan Mikro Syariah - BMT

2020 ◽  
Vol 2 (1) ◽  
pp. 15-28
Author(s):  
Nandang Ihwanudin ◽  
Handri Handri ◽  
Deden Gandana Madjakusumah ◽  
M Munir Asrori
Keyword(s):  
Case Studies ◽  
Trade Agreement ◽  
Profit Sharing ◽  
Business Practices ◽  
Microfinance Institutions ◽  
Literature Reviews ◽  
Microfinance Institution ◽  
Islamic Microfinance

Purpose- Akad tijarah as a form of trade agreement has several types, in which needs to be adjusted to each necessity. It is important for related parties to understand what and how akad ijarah works. This article analyses how far the contribution of an Islamic microfinance institution (LKMS) nowadays, considering there are nash (Al-Qur’an and Al-Hadits) and also fatwa the national sharia council (DSN) MUI. Methods- Case studies and literature reviews are used to evaluate sharia business practices in BMT. Findings- Sharia microfinance institutions, in this case, BMT TUMANG, have carried out sharia principles in practice, especially for tijarah agreements with documents in the form of SOM and SOP as well as financing contracts (agreements), both in the principle of sale and profit-sharing. Implications/Limitations- This study is limited to one branch of the BMT so it cannot describe the overall practice carried out in other regions.

scholarly journals Peranan LEmbaga Keuangan Mikro Syariah Dalam Mendorong USaha Kaum Perempuan

2020 ◽  
Vol 1 (1) ◽  
pp. 84-99
Author(s):  
Rianti Pratiwi
Keyword(s):  
Financial Institution ◽  
Microfinance Institutions ◽  
Social Business ◽  
Financial Factors ◽  
Financial Products ◽  
Business Women ◽  
The World ◽  
Islamic Microfinance ◽  
Financial Administration ◽  
Main Factor

Program pembiayaan mikro yang ditujukan untuk kaum perempuan, ataupun program pembiayaan mikro secara umum, yang diharapkan dunia menjadi kunci pengentasan kemiskinan, sesungguhnya masih menyimpan masalah. Namun demikian nyatanya, tidak dipungkiri sebagian besar usaha yang dikelola oleh kaum perempuan, dimana mayoritas berskala mikro, masih menjadikan faktor finansial atau modal usaha menjadi kendala utama. Dalam hal ini kehadiran Lembaga Keuangan Mikro Syariah (LKMS) sangat diperlukan, mengingat LKMS setidaknya memiliki keunggulan antara lain, tidak menerapkan sistem ribawi -yakni faktor utama atas kegagalan suatu sistem keuangan termasuk microfinance-, bersifat sosial bisnis, dapat menciptakan produk keuangan yang inovatif untuk keperluan usaha kaum perempuan dan juga faktor kedekatan wilayah LKMS dengan para nasabahnya. Dalam kajian ini juga disimpulkan bahwa LKMS harus dapat berperan sebagai pusat pembelajaran bagi nasabahnya, yakni dengan memberikan pendampingan, baik dalam hal administrasi keuangan usaha, maupun mensosialisasikan pemahaman tentang ekonomi Islam. Hal-hal tersebut merupakan kesatuan perangkat agar tujuan dari adanya pembiayaan mikro yang ditujukan kepada kaum perempuan tidak menyimpang, yaitu mewujudkan kemaslahatan.Kata kunci: Pembiayaan mikro, Usaha mikro, Perempuan, Peran LKMS, Kemaslahatan.AbstractMicrofinance programs aimed for women, or microfinance program in general, which is expected to be a key for the world poverty, actually still have problems. However, in reality, there is no doubt that most of the businesses run by women, which the majority are micro-scale, still make financial factors or venture capital is the main constraint. In this case the presence of Islamic Microfinance Institutions (LKMS) is necessary, given that LKMS at least have some advantages, among others financial institution such, do not apply the usury/interest system (which is the main factor for the failure of the financial system, including microfinance), has a social business characteristic, can create innovative financial products to women business purposes and also its proximity to the region LKMS customers. In this study also concluded that LKMS should be able to act as a center of learning for its customers, by providing assistance, both in terms of financial administration efforts, and disseminate an understanding of Islamic economics. Those things are a unity of devices, so that the purpose of the microfinancing aimed for women are not deviated, namely to realize the mashlahah.Keywords: Microfinance, Micro Business, Women, LKMS Role, Mashlahah.

scholarly journals Sharia Hybrid Contract Compliance of Islamic Microfinance Institutions in Jepara Regency

2020 ◽  
Vol 4 (2) ◽  
pp. 441
Author(s):  
Mahmudatus Sa’diyah ◽  
Asep Gugun Gumilar ◽  
Edi Susilo
Keyword(s):  
Content Analysis ◽  
Field Research ◽  
Analysis Approach ◽  
Microfinance Institutions ◽  
Hybrid Products ◽  
Contract Compliance ◽  
Microfinance Institution ◽  
Islamic Microfinance

The purpose of this study was to examine the sharia compliance of the Hybrid Contract of the Syriah Microfinance Institution (LKMS) in Jepara Regency. This type of research is a Field Research, using a content analysis approach; to interpret data not as a series of physical events, but as symbolic symptoms to reveal the meaning contained in a text, and the understanding of the message presented. The research object selected was BMT in Jepara Regency which applies contract and unique hybrid products, namely BMT Mitra Muamalah (Mitramu) which has the product "Gold Pawn" and BMT Harapan Bersama (HARBER) which has a Musyarakah Mutanaqishah (MMq) product. The results showed that the Musyarakah Mutanaqishah (MMq) financing agreement at BMT Harapan Bersama (HARBER) Jepara was in accordance with the DSN-MUI fatwa NO: 73 / DSN-MUI / XI / 2008. Rahn's contract which is run by BMT Mitra Muamalah Jepara is in accordance with the DSN-MUI Fatwa Number: 25 / DSN-MUI / III / 2002, and Fatwa DSN-MUI Number: 26 / DSN-MUI / III / 2002.. Weak internal and external supervision at Cooperative entities, the implementation of hybrid contracts in the field is prone to deviations and falling to "Riba".

Peran Lembaga Keuangan Mikro Syari’ah BMT dalam Meningkatkan BUMDES dan Akses Keuangan di Banten

2018 ◽  
Vol 1 (2) ◽  
pp. 191 ◽  
Author(s):  
Muljadi Muljadi
Keyword(s):  
Small Town ◽  
Financial Institution ◽  
Profit Sharing ◽  
Market Development ◽  
Microfinance Institutions ◽  
Village Community ◽  
Direct Participation ◽  
Microfinance Institution ◽  
The Village

Potential villages in Banten amounting to 1,273 and need to be empowered, Shari’ah Micro Financial Institution Baitul Maal Wat Tamwil (LKMS BMT) is a microfinance institution syari’ah targeted at people’s economy trying to develop productive businesses and investments with profit-sharing system. The main objective is to improve the economic quality of micro and small entrepreneurs, as part of efforts to alleviate poverty. Village Owned Enterprises (BUMDes) is a business entity which is completely or partially owned by the Village through direct participation derived from the wealth of the Village separated to manage assets, services and other businesses for the greatest benefit of the small town community. Potential BUMDes will be more prospective when synergized with Shari’ah microfinance institutions Baitul Maal Wat Tamwil (LKMS BMT). This syari’ah financial institution proved able to adapt with the village community. The concept of SDSB, one village one BMT. To achieve this it is necessary to have 5 pillars in support of the process, fostering behavior, fostering brotherhood, building synergy, building funds and market development, and excellent products.Keyword: Village, Shari’ah Micro Financial Institution, Village Owned Enterprises (BUMDes),

scholarly journals Wanprestasi dalam Pelaksanaan Perjanjian Pinjam Meminjam Pada Lembaga Keuangan Mikro Syariah Karawang

Wajah Hukum ◽  
2021 ◽  
Vol 5 (1) ◽  
pp. 101
Author(s):  
Aam Hernita Sriwulan ◽  
Puti Priyana
Keyword(s):  
Decision Making ◽  
Financial Institution ◽  
Business Development ◽  
Loan Terms ◽  
Microfinance Institution ◽  
Islamic Microfinance

The implementation of lending and borrowing money at the Karawang Islamic Microfinance Institution (LKMS) is based on an agreement between the two parties with the aim of providing capital for business development. However, in the implementation of these loans, problems are still encountered in the form of broken promises or defaults made by the debtor customer. The purpose of this research is to find out how the implementation of the loan and loan agreement at the Islamic Microfinance Institution (LKMS) X in Karawang, what are the forms and factors that cause defaults to occur at the X Sharia Microfinance Institution (LKMS) in Karawang, and how the efforts to resolve default carried out by the X Financial Institution (LKMS) in Karawang. This study uses a normative juridical method. Based on the results of research on the implementation of the lending and borrowing agreement at the Sharia Microfinance Institution (LKMS) X in Karawang, it is bound by a written agreement, the form of default that occurs is in the form of not performing achievements, performing achievements but partly, implementing achievements but too late. Factors occur in default, uncertainty in decision making, lack of coordination, misuse of loan funds, and business not running smoothly. Efforts to solve it include intensive collection, issuance of warning letters, customer summons, extension of loan terms and collateral seizure.

Integrating Zakat and Microfinance

2020 ◽  
pp. 277-289
Author(s):  
Mohammad Bintang Pamuncak ◽  
Bayu Taufiq Possumah ◽  
Zairihan Abdul Halim
Keyword(s):  
Content Analysis ◽  
Conceptual Framework ◽  
Structured Interview ◽  
Qualitative Approach ◽  
Clear Definition ◽  
Financial Intermediary ◽  
Microfinance Institution ◽  
Islamic Microfinance ◽  
Potential Strategy

This chapter bridges the concepts of microfinance and Zakat, and proposes a conceptual framework as a potential strategy to solve poverty. This study employs qualitative approach. Specifically, it performs content analysis on related manuscripts, and conducts a structured interview with selected stakeholders of Zakat institutions. The study proposes that Zakat institution must have a clear definition about which Zakat fund portion should be used for the program. Authors propose the use of amil for the program and it must be given by amil voluntarily and there must be clear mechanism on which deserving categories (asnaf/mustahik) should be prioritised to be the part of the program. In practice, amil can be considered as investors (where Zakat institution distributes and becomes Islamic microfinance institution) or financial intermediary (where the amil distributes and becomes Islamic microfinance institution appointed by the authority).

Strategic Alliances between Sharia Microfinance Institutions and Financial Technology in Strengthening Small Micro Enterprises (MSEs)

2020 ◽  
Vol 13 (2) ◽  
pp. 240
Author(s):  
Euis Amalia ◽  
Indra Rahmatullah
Keyword(s):  
Business Model ◽  
Strategic Alliances ◽  
Financial Literacy ◽  
Risk Mitigation ◽  
Legal Aspects ◽  
Microfinance Institutions ◽  
Strong Basis ◽  
Microfinance Institution ◽  
Micro Enterprises ◽  
Financial Technology

<p class="Abstract">Sharia microfinance and financial technology have a very significant role as an effective solution for accessing finance for small and micro-enterprises (MSEs). The research aims to investigate the business model used, type of contracts employed, other legal aspects, and the risk mitigation dimension involved. By utilizing qualitative methods and critically analyzing a specific case study related a business model by the alliances between PT Ammana Fintech Sharia and a sharia microfinance institution, BMT Syahida Ikaluin. In generating the data, <em>interviews</em> with several experts and practitioners. The study found that the business model used was based on crowdfunding, compliant with sharia principles dan has a strong basis both in positive law and Islamic edict (<em>fatwa)</em>. The research showed that the strategic alliance between a sharia microfinance institution and financial technology is capable of strengthening access to capital sources for small and micro-enterprises. It also improves community financial literacy and financial inclusion. This research could contribute to the creation of innovative products concerning sharia microfinance and sharia financial technology. Furthermore, it could also become a benchmark in formulating policies to strengthen these strategic institutional alliances.<em></em></p><p class="Abstract"><br /><em></em></p><p class="Abstract"><br /><em></em></p>

scholarly journals Financial and Social Performances of Islamic Microfinance Service Provider With Mobile Banking

2019 ◽  
Vol 10 (5) ◽  
pp. 181
Author(s):  
Afifa Malina Amran ◽  
Intan Salwani Mohamed ◽  
Sharifah Norzehan Syed Yusuf ◽  
Nabilah Rozzani
Keyword(s):  
Social Performance ◽  
Accounting Information ◽  
Standard Of Living ◽  
Mobile Banking ◽  
Microfinance Institutions ◽  
Accounting Information System ◽  
Qualitative Approaches ◽  
Islamic Financial Institutions ◽  
Microfinance Institution ◽  
Islamic Microfinance

In Malaysia, Islamic microfinance institutions (IMFIs) are part of Islamic financial institutions and have been established to provide Islamic microfinance products (interest free loans). Their aim is to promote trade activities among Islamic microfinance recipients in improving their standard of living. Information and data gathered can be used as evidence to prove that Islamic microfinance has traits that provide a support system for the poorest of the poor. This study hence intends to investigate the application of technology by Islamic microfinance institutions within a context of its accounting information system through the usage of mobile banking. This study is conducted using qualitative approaches via interviews to obtain in depth understanding of mobile banking usage at an Islamic microfinance institution. Financial data, as well as data on the total number of loan recipients (sahabats) is referred by the study in investigating another aspect of social performance in terms of vicegerency and accountability of the IMFI. Extensive application of vicegerency concept in explaining the findings is parallel to Shari'ah Foundation for Accountants in outlining characteristics of Muslim accountants in preventing them from doing prohibited actions.

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