Issues and challenges in financing the poor: case of Baitul Maal Wa Tamwil in Indonesia

The purpose of this paper is to highlight the issues and challenges in providing financing to the poor people based on the experience of Baitul Maal Wa Tamwil (BMT) in Indonesia. A series of structured interviews were conducted with the chairman and staff of the Central BMT (Induk Koperasi Syariah)...

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Main Authors:	Wulandari, Permata, Kassim, Salina
Format:	Article
Language:	English English
Published:	Emerald Publisher 2016
Subjects:	H Social Sciences (General) HC Economic History and Conditions HC79 Special topics. Including air pollution, consumer demands,famines, flow of fund etc HG Finance HG1501 Banking
Online Access:	http://irep.iium.edu.my/51962/ http://irep.iium.edu.my/51962/ http://irep.iium.edu.my/51962/ http://irep.iium.edu.my/51962/1/003%20IJBM%20Wulan%20BMT.pdf http://irep.iium.edu.my/51962/7/51962-Issues%20and%20challenges%20in%20financing%20the%20poor_SCOPUS.pdf

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recordtype	eprints
spelling	iium-519622017-01-03T01:35:06Z http://irep.iium.edu.my/51962/ Issues and challenges in financing the poor: case of Baitul Maal Wa Tamwil in Indonesia Wulandari, Permata Kassim, Salina H Social Sciences (General) HC Economic History and Conditions HC79 Special topics. Including air pollution, consumer demands,famines, flow of fund etc HG Finance HG1501 Banking The purpose of this paper is to highlight the issues and challenges in providing financing to the poor people based on the experience of Baitul Maal Wa Tamwil (BMT) in Indonesia. A series of structured interviews were conducted with the chairman and staff of the Central BMT (Induk Koperasi Syariah) in Jakarta which is the head-quarter of 382 BMTs throughout Indonesia, with additional chairman and shari’ah supervisory in Central BMT (Pusat Koperasi Syariah) in Makasar. Subsequently, the results from the structured interviews were analyzed using qualitative analysis to arrive at the model of the peculiarities of financing the poor in Indonesia. The findings show that the Central BMT has built specific products and empowerment mechanisms for the poor and has an ideal product to be applied in 382 BMT in Indonesia. There are two schemes of financing source in BMT, namely, social ministry (Kelompok Usaha Bersama) and private financing (national and international donor). Specifically, the peculiarities of financing given in BMT are not only in the term of capital but also in the term of providing infrastructure and training for the poor. Moreover,collateral must be provided as a screening process for the poor people to secure any form of financing. If there is no collateral, potential borrowers must opt for joint-liability financing. Furthermore, if the poor could not repay the financing, endowment coming from charity and compulsory Islamic tax (zakat, infaq and sadaqah) would play a vital role to cover for the financing default. Lastly, religious capacity building is also provided as a part of risk management aspect. Emerald Publisher 2016 Article PeerReviewed application/pdf en http://irep.iium.edu.my/51962/1/003%20IJBM%20Wulan%20BMT.pdf application/pdf en http://irep.iium.edu.my/51962/7/51962-Issues%20and%20challenges%20in%20financing%20the%20poor_SCOPUS.pdf Wulandari, Permata and Kassim, Salina (2016) Issues and challenges in financing the poor: case of Baitul Maal Wa Tamwil in Indonesia. International Journal of Bank Marketing, 34 (2). pp. 216-234. ISSN 0265-2323 http://www.emeraldinsight.com/doi/abs/10.1108/IJBM-01-2015-0007 10.1108/IJBM-01-2015-0007
repository_type	Digital Repository
institution_category	Local University
institution	International Islamic University Malaysia
building	IIUM Repository
collection	Online Access
language	English English
topic	H Social Sciences (General) HC Economic History and Conditions HC79 Special topics. Including air pollution, consumer demands,famines, flow of fund etc HG Finance HG1501 Banking
spellingShingle	H Social Sciences (General) HC Economic History and Conditions HC79 Special topics. Including air pollution, consumer demands,famines, flow of fund etc HG Finance HG1501 Banking Wulandari, Permata Kassim, Salina Issues and challenges in financing the poor: case of Baitul Maal Wa Tamwil in Indonesia
description	The purpose of this paper is to highlight the issues and challenges in providing financing to the poor people based on the experience of Baitul Maal Wa Tamwil (BMT) in Indonesia. A series of structured interviews were conducted with the chairman and staff of the Central BMT (Induk Koperasi Syariah) in Jakarta which is the head-quarter of 382 BMTs throughout Indonesia, with additional chairman and shari’ah supervisory in Central BMT (Pusat Koperasi Syariah) in Makasar. Subsequently, the results from the structured interviews were analyzed using qualitative analysis to arrive at the model of the peculiarities of financing the poor in Indonesia. The findings show that the Central BMT has built specific products and empowerment mechanisms for the poor and has an ideal product to be applied in 382 BMT in Indonesia. There are two schemes of financing source in BMT, namely, social ministry (Kelompok Usaha Bersama) and private financing (national and international donor). Specifically, the peculiarities of financing given in BMT are not only in the term of capital but also in the term of providing infrastructure and training for the poor. Moreover,collateral must be provided as a screening process for the poor people to secure any form of financing. If there is no collateral, potential borrowers must opt for joint-liability financing. Furthermore, if the poor could not repay the financing, endowment coming from charity and compulsory Islamic tax (zakat, infaq and sadaqah) would play a vital role to cover for the financing default. Lastly, religious capacity building is also provided as a part of risk management aspect.
format	Article
author	Wulandari, Permata Kassim, Salina
author_facet	Wulandari, Permata Kassim, Salina
author_sort	Wulandari, Permata
title	Issues and challenges in financing the poor: case of Baitul Maal Wa Tamwil in Indonesia
title_short	Issues and challenges in financing the poor: case of Baitul Maal Wa Tamwil in Indonesia
title_full	Issues and challenges in financing the poor: case of Baitul Maal Wa Tamwil in Indonesia
title_fullStr	Issues and challenges in financing the poor: case of Baitul Maal Wa Tamwil in Indonesia
title_full_unstemmed	Issues and challenges in financing the poor: case of Baitul Maal Wa Tamwil in Indonesia
title_sort	issues and challenges in financing the poor: case of baitul maal wa tamwil in indonesia
publisher	Emerald Publisher
publishDate	2016
url	http://irep.iium.edu.my/51962/ http://irep.iium.edu.my/51962/ http://irep.iium.edu.my/51962/ http://irep.iium.edu.my/51962/1/003%20IJBM%20Wulan%20BMT.pdf http://irep.iium.edu.my/51962/7/51962-Issues%20and%20challenges%20in%20financing%20the%20poor_SCOPUS.pdf
first_indexed	2023-09-18T21:13:40Z
last_indexed	2023-09-18T21:13:40Z
_version_	1777411419952644096

Issues and challenges in financing the poor: case of Baitul Maal Wa Tamwil in Indonesia

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