There are more than 3,900 units of baitul mal wa tamwil (BMT) in Indonesia, a type of Islamic microfinance institutions (IMFIs) and these institutions have been playing an important role in the poverty alleviation process in the country.
Abstract
There are more than 3,900 units of baitul mal wa tamwil (BMT) in Indonesia, a type of Islamic microfinance institutions (IMFIs) and these institutions have been playing an important role in the poverty alleviation process in the country. Amid the competitive pressure to sustain their operations, the issue of source of funding is highly critical for sustainability and survival of the IMFIs. This study attempts to explore and investigate the viability of integrating cash waqf in IMFIs by taking BMT as a case study. Indeed, this effort is in line with the Strategic Programs and Activities’ Blueprint from the Ministry of Cooperative and SMEs which was issued in 2014 to synergize between waqf and BMT to enlarge the financing for microenterprises. The study adopts a qualitative research method by conducting semi-structured in-depth interview with the BMT’s chairman and managers. The result shows that the management of cash waqf in BMT has multiplier effects for human development. The cash waqf collected has been managed as productive waqf asset such as learning courses for students and agricultural development for farmers. The income generated from productive waqf then utilize as micro-loan for microenterprises. Findings of this study would contribute positively in terms of: (i) for practitioners of BMT to manage the cash waqf in BMT and get diversified source of fund for BMT; (ii) for policy makers as guidelines to improve the industry; and (iii) to enrich the literature about cash waqf management in Islamic microfinance which is currently still lacking.
Keywords: cash waqf, financial inclusion, Islamic microfinance, micro-entrepreneurs
Link Download: BWPS No. 8 2021
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