Designing sustainable Islamic Microfinance to enhance the accessibility of poor borrowers in Indonesia: an appreciative intelligence approach

Abstract

This paper provides a sustainable Islamic microfinance design using an appreciative intelligence approach to enhance the poor borrowers’ accessibility to micro financing in Indonesia. This study aims to identify problems faced by BMT in Indonesia and find the solution to implement sustainable Islamic microfinance. It uses a qualitative analysis by adopting an appreciative intelligence approach. Data was collected by interviewing the Chairman and officer of Central BMT (Induk Koperasi Syariah), Jakarta in 382 BMT’s throughout Indonesia. The steps: (i) reframing problems into possibilities, (ii) appreciating the positive meaning and promise of every being, experience, situation, and (iii) linking the generative strength of the present with the preferred vision. The results show that BMT faced four problems in implementing sustainable Islamic microfinance, namely lending limit regulation, high funding pricing to the borrowers, APEX BMT realization, and productive use funding. Several solutions have been suggested by using the appreciative intelligence approach. This paper adds to the literature on Islamic microfinance by enabling researchers and practitioners to apply the appreciative intelligence model of sustainable Islamic microfinance. It also contributes towards enriching the knowledge in the Islamic microfinance and sustainable Islamic microfinance.

A Proposed Integrated Islamic Crowdfunding - Microfinance (Iicm) Model for Poverty Reduction: A Case Study of Indonesia

“…The implementation of Islamic MFI preceded by selection process of micro-enterprises with additional business control, create a good relationship and incentive system is effective in micro-enterprises development and also improve household income. Thus, the study concludes that designing integrated program to improve BMT effectiveness is highly important to ensure sustainability of the BMT (Bin Mislan Cokro Hadisumarto & Ghafar, 2010;Rahayu, 2020;Wulandari and Pramesti, 2021). Dariah (2012) found that many financial subsidies from external to microfinance are unstable because it usually depends on the performance.…”

Islamic Microfinance as Social Finance in Indonesia

“…One of the papers with authors from Indonesia is a paper entitled "Designing sustainable Islamic Microfinance to enhance the accessibility of poor borrowers in Indonesia: An appreciative intelligence approach," written by Wulandari & Pramesti (2021). The paper presents a design of sustainable Islamic microfinance with an appreciative intelligence approach to increase the accessibility of poor borrowers to microfinance in Indonesia.…”