Strategic Alliances between Sharia Microfinance Institutions and Financial Technology in Strengthening Small Micro Enterprises for Socio Economic Justice

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, interviews 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 (fatwa). 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.

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Performance of Multiple Borrowing Clients in Gandaki Province of Nepal

Prithvi Academic Journal ◽

10.3126/paj.v2i0.31503 ◽

2019 ◽

Vol 2 ◽

pp. 18-31

Author(s):

Bharat Ram Dhungana ◽

Ramkrishna Chapagain

Keyword(s):

Economic Performance ◽

Regulatory Authority ◽

Capital Expenditure ◽

Women Empowerment ◽

Income Generation ◽

Consumption Expenditure ◽

Microfinance Institutions ◽

Inferential Statistics ◽

Significant Difference ◽

Micro Enterprises

The multiple borrowing problems are more common in microfinance institutions in Nepal. The study aims to evaluate the performance of multiple borrowing clients in Gandaki province of Nepal with reference to Muktinath Bikas Bank Limited (MBBL). The performance of multiple borrowing clients, in terms of women empowerment, consumption expenditure, capital expenditure, micro-enterprises creation, saving, investment, and profit, has been examined with the help of descriptive and inferential statistics. The study has been confined to five districts of Gandaki province and the data have been collected from MBBL clients who are involved in microfinance intervention at least from the last five or more years. The performance of most of the observed clients was empowered by microfinance activities but no significant difference in terms of changes in the livelihood parameters. Although microfinance programmes empower clients, the results of the investment, saving, micro-enterprises creation, capital and consumption expenditure, and income generation of clients are not convincing. The regulatory authority should identify the problems of multiple borrowing whether the financing from microfinance institutions is just for their profit or for productive application of loan. The socio-economic performance of clients is connected with the effective monitoring of clients made by microfinance institutions whether the loan has been properly utilized or not.

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Evaluating the Impact of Microfinance for Women in Albania

Journal of Business Theory and Practice ◽

10.22158/jbtp.v4n2p233 ◽

2016 ◽

Vol 4 (2) ◽

pp. 233

Author(s):

Oltiana Muharremi ◽

Filloreta Madani ◽

Erald Pelari

Keyword(s):

Social Influence ◽

Low Income ◽

Financial Services ◽

Poverty Alleviation ◽

Empirical Investigation ◽

Social Value ◽

Microfinance Institutions ◽

The Poor ◽

The Impact ◽

Micro Enterprises

Microfinance is defined as any activity involving the offering of financial services such as loans, savings and insurance to individuals with low income. Creating social value includes reducing poverty and having a better impact to improve living conditions through capital for micro-enterprises; insurance and savings deposits for reducing risk and boosting consumption. Worldwide microfinance actors promote access to basic financial services by developing new tools, a variety of products and the adoption of an integrated banking access.Initially, microfinance was largely gender neutral: it sought to provide credit to the poor who had no assets to pledge as collateral. It quickly emerged, however, that women invested their business profits in ways that would have a longer-lasting impact on their families and communities. Consequently women became fundamental to the success of the microfinance model as a poverty alleviation tool. The purpose of this article is to examine the impact of microfinance loans in improving the lives of women borrowers, as well as in strengthening their social influence and the microcredit impact in promoting savings. This study is based on an empirical investigation of 384 structured questionnaires and surveys directed at microfinance institutions and their clients in the regions of Vlore and Fier, Albania.

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Baitul Maal wat-Tamwil Services for SMEs

Handbook of Research on Theory and Practice of Global Islamic Finance - Advances in Finance, Accounting, and Economics ◽

10.4018/978-1-7998-0218-1.ch014 ◽

2020 ◽

pp. 259-276

Author(s):

Muhamad Abduh ◽

Nur Jamaludin

Keyword(s):

Service Quality ◽

Structural Equation ◽

Equation Model ◽

Primary Data ◽

Perceived Benefits ◽

Microfinance Institutions ◽

The Relationship ◽

Carter Model ◽

Micro Enterprises

This chapter investigates the relationship between service quality of Baitul Maal wat-Tamwil (BMT) and the satisfaction of small and micro-enterprises in Indonesia with perceived benefits as the mediating variable. Primary data is collected from 454 small and micro-enterprises located in the western part of Jawa Island of Indonesia and the CARTER model is adopted to test the satisfaction of small and micro-enterprises upon the services provided by their patronized BMT as Islamic microfinance institutions. By using the structural equation model, the finding confirms that perceived benefits fully mediate the relationship between service quality of BMT and small and micro-enterprises' satisfaction.

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DAYA TAHAN BAITUL MAL WAT TAMWIL DALAM ARUS REVOLUSI INDUSTRI 4.0

Ekono Insentif ◽

10.36787/jei.v14i2.218 ◽

2020 ◽

Vol 14 (2) ◽

pp. 77-90

Author(s):

Eja Armaz Hardi

Keyword(s):

Industrial Revolution ◽

Financial Institution ◽

Descriptive Analysis ◽

Microfinance Institutions ◽

Financial Industry ◽

Middle Income ◽

Transaction Process ◽

Qualitative Descriptive ◽

Financial Transactions ◽

Financial Technology

Abstrak - Artikel ini bertujuan untuk menganalisa ketahanan Baitul Mal wat Tamwil (BMT) di dalam arus revolusi industri 4.0 pada bidang financial technology (fintech). BMT merupakan salah satu Lembaga Keuangan Mikro Syariah (LKMS) di Indonesia yang memiliki segmentasi konsumen spesifik yaitu masyarakat low-middle income dan tidak memiliki akses kepada perbankan (unbankable). BMT terbukti memiliki peran signifikan dalam membantu mengurangi tingkat kemiskinan di Indonesia dengan program pemberdayaan yang dimilikinya. Di saat bersamaan, proses manajemen yang berlaku pada BMT masih relatif berbelit dan panjang, seperti pendampingan pra-pembiayaan, proses pembiayaan dan pasca pembiayaan. Akan tetapi, satu dekade terakhir, perkembangan teknologi finansial (fintech) melakukan inovasi yang signifikan dalam bidang industri keuangan. Salah satu signifikansi dari inovasi fintech adalah mendistrupsi atau memotong jalur panjang administrasi yang berlaku selama di lembaga keuangan. Di samping itu ia juga menawarkan kecepatan, mobilitas dan akurasi proses transaksi keuangan masyarakat. Dengan menggunakan analisis deskriptif kualitatif, artikel ini menemukan bahwa, walaupun fintech menawarkan inovasi yang distrubtif dalam transaksi keuangan saat ini, BMT cenderung akan tetap bertahan dengan distingsi dan segmentasi yang dimilikinya. Akan tetapi, resistensi tersebut menjadi berbeda ketika penduduk Indonesia yang berusia di atas 65 tahun saat ini disubstitusi oleh generasi milenial pada tahun 2035. Oleh karena itu, artikel ini merekomendasikan bahwa untuk menghindari penurunan peran dalam membantu masyarakat menengah ke bawah dalam hal finansial, BMT harus menyesuaikan diri dengan melakukan inovasi, integrasi, interkoneksi dengan perusahaan fintech. Abstract - This article aims to analyze the resilience of the Baitul Mal wat Tamwil (BMT) in the era of industrial revolution 4.0 in the field of financial technology (fin-tech). BMT is one of the Sharia Microfinance Institutions (LKMS) in Indonesia has specific consumer segmentation, namely low-middle income people and no access to banks (un-bankable). BMT has proven to have a significant role in helping to reduce poverty levels in Indonesia with its empowerment program. At the same time, the management processes that apply to BMTs are still relatively complicated and long, such as pre-financing assistance, financing processes and post-financing. However, in the last decade, the development of fin-tech has made significant innovations in the financial industry. One significance of fin-tech innovation is the distribution or cutting of the long administrative path that applies while at a financial institution. In addition, he also offers the speed, mobility and accuracy of the public financial transaction process. Using a qualitative descriptive analysis, this article finds that, although fin-tech offers constructive innovation in current financial transactions, BMTs will tend to survive with their distinction and segmentation. However, this resistance becomes different when the Indonesian population aged over 65 years would substituted by millennial generation in 2035. Therefore, this article recommends that in order to avoid reducing its role in helping the middle to lower financially, the BMT must adjust to innovation, integration, interconnection with fin-tech companies.

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Opportunity Strategies related to Business Competitiveness in Restaurants in Mexico. Case: Micro-enterprises in the Municipality of Othon P. Blanco, State of Quintana Roo

Cuadernos de Administración ◽

10.25100/cdea.v34i60.5928 ◽

2018 ◽

Vol 34 (60) ◽

Cited By ~ 1

Author(s):

María Teresa Arana Soberanes ◽

Rosa Amalia Gómez Ortiz ◽

María Antonieta Andrade Vallejo

Keyword(s):

Organizational Culture ◽

Sample Size ◽

Strategic Alliances ◽

Research Method ◽

Organizational Management ◽

Quintana Roo ◽

Nominal Level ◽

Business Competitiveness ◽

The Relationship ◽

Micro Enterprises

The purpose was to analyze the relationship between organizational management and business competitiveness of microenterprises of restaurant sector in the municipality of Othón Payo Blanco, Quintana Roo. This research method relied on analysis and deduction with a non-experimental quantitative approach. The survey scope was a correlational. The instrument was a Likert-type questionnaire with 20 nominal level items that was applied in restaurants with less than 10 employees. A sample size was 17 microenterprises. Among the results, it was found that microenterprises implement organizing and controlling functions. Their business competitiveness is oriented to technology and organizational culture. The main conclusion was that the opportunity strategy to generate competitiveness is strategic alliances, furthermore, the need of implementing a strategic-focused planning and leading.

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DO MICRO ENTERPRISES CHOOSE MICROFINANCE INSTITUTIONS TO MEET THEIR FINANCIAL NEEDS? EVIDENCE FROM MUMBAI SLUMS

Journal of Developmental Entrepreneurship ◽

10.1142/s1084946714500204 ◽

2014 ◽

Vol 19 (03) ◽

pp. 1450020 ◽

Cited By ~ 1

Author(s):

CHANDRALEKHA GHOSH ◽

SAMAPTI GUHA

Keyword(s):

The Other ◽

Microfinance Institutions ◽

Primary Survey ◽

Empirical Results ◽

Different Types ◽

Micro Enterprises

The study empirically investigates types of microenterprises (MEs) resorting to microfinance institutions (MFIs) for their financial needs in the slums of Mumbai, India. The study is based on a primary survey of MEs, located in two different types of slums, namely "declared" and "undeclared," in Mumbai including the largest slum, "Dharavi," in India, Asia. Empirical results show that the MEs from the undeclared slums mainly depend on the MFIs. Apart from this fact, it has also been observed that MEs operating from private places and started their operation less than five years ago depend on the MFIs to meet their financial requirements. The other MEs are either depending on informal money lenders or their own resources for running their enterprises.

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The Role of Network Quality as Moderating Variable on the Performance Enhancement of Islamic Microfinance Institutions (Cases of Baitul Mal Wat Tamwil)

IQTISHADIA Jurnal Kajian Ekonomi dan Bisnis Islam ◽

10.21043/iqtishadia.v11i2.3198 ◽

2018 ◽

Vol 11 (2) ◽

pp. 307 ◽

Cited By ~ 1

Author(s):

Muhamad Mutaqin ◽

Widiyanto Bin Mislan Cokrohadisumarto

Keyword(s):

Human Capital ◽

Business Ethics ◽

Performance Improvement ◽

Performance Enhancement ◽

Microfinance Institutions ◽

Islamic Business Ethics ◽

Network Quality ◽

Islamic Microfinance ◽

Micro Enterprises

Islamic microfinance institutions (IMFI) -such as Baitul Mal Wat Tamwil (BMT)– have an important role in the development of micro-enterprises in Indonesia. Therefore, performance improvement BMT institutions should be carried out continuously in order to enhance its role in contributing to the development of the national economy, namely through the development of micro enterprises. The purpose of this study is to develop animprovement model the performance of BMT by involving the variables of human capital, Islamic business ethics, and moderation variable of network quality. Results of the study showed that the human capital and Islamic business ethics have a significant effect on the performance of BMT, and the network quality is able to strengthen the effect of human capital and Islamic business ethics in improving the performance of BMT. This result indicates that the network quality as moderation variable has an important role in improving the performance of BMT.

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Microfinance towards micro-enterprises development in rural Malaysia through digital finance

Discover Sustainability ◽

10.1007/s43621-021-00066-3 ◽

2021 ◽

Vol 2 (1) ◽

Author(s):

Muhammad Farhan Jalil

Keyword(s):

Sustainable Development ◽

Transaction Costs ◽

Substantial Influence ◽

Microfinance Institutions ◽

The Sustainable Development ◽

Widespread Acceptance ◽

Impact Data ◽

The Relationship ◽

Micro Enterprises

AbstractMicrofinance is critical for the development of micro-enterprises and alleviating poverty. However, micro-enterprises are able to get microfinance services, they would face a variety of obstacles, due to the misunderstandings among many stakeholders, microfinance has not acquired widespread acceptance. Therefore, the purpose of this study is to investigate microfinance's impact on the sustainable development of Malaysia’s rural micro-enterprises. Besides, digital finance is integrated into the conceptual model to further investigate their mediating impact. Data was collected from 563 rural micro-enterprises using structured questionnaires, which were then statistically analyzed using AMOS-21. The findings of the study reveal that microfinance has a positive substantial influence on rural micro-enterprises development. Moreover, digital finance partially mediates the relationship. Thus, the study concludes that microfinance institutions are needed to adopt digital finance to enhance micro enterprises’ productivity through low transaction costs. The findings of the study can be useful to policymakers in the micro-enterprise sector who have a long-term vision and expect the sector to develop steadily. The study also provides scope and space for future academics and scholars to conduct further research.

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Effectiveness of Musharakah Financing in Empowering Small Micro Enterprises

Studies of Applied Economics ◽

10.25115/eea.v39i10.5847 ◽

2021 ◽

Vol 39 (10) ◽

Author(s):

Khusnul Hidayah ◽

Dalila Daud ◽

Nurazilah Zainal ◽

Siti Sara Ibrahim

Keyword(s):

Small Business ◽

Critical Analysis ◽

Easy Access ◽

Microfinance Institutions ◽

Analysis Method ◽

Research Findings ◽

Islamic Microfinance ◽

New Perspective ◽

Micro Enterprises ◽

Special Region

The present study aims to analyse the effectiveness of musharakah financing for empowering micro-businesses in the perspective of entrepreneurs. This research is qualitative research using a critical analysis method. This study uses interviews as a research instrument to find out what factors affect the effectiveness of musharakah financing in empowering micro small business of BMT entrepreneurs in the Special Region of Yogyakarta. Entrepreneurs from two BMT in Yogyakarta had been interviewed. The results showed that BMT musharakah financing played an important role in the business development of Micro and Small Business, especially in terms of increasing business capital, easy access to take financing and a small amount of instalments. In addition, musharakah financing is effective in encouraging MSE empowerment, to increase the amount of merchandise inventory, add new types of products, expand businesses and add new equipment for business facilities. This study limits the ability to generate findings to a larger population of small-micro enterprises which obtain shariah financing from Islamic microfinance institutions (Baitul Maal Wat Tamwil) in Indonesia. The research findings can be used on how to empower small-micro enterprises with the Islamic financing and the development of Islamic microfinance institutions. This paper has contributed to the approach of empowering small micro-businesses with musharakah financing, which is considered to have a less contribution to BMT income. In addition, this study uses a critical analysis method to get a new perspective on the use of musharakah financing from the view of small entrepreneurs.

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