Establishing Social Justice Through Financial Inclusivity: Islamic Propagation by Islamic Savings and Credit Cooperatives in Indonesia

Abstract

Islamic finance has been growing significantly across the globe. In Southeast Asia, interest in Islamic finance and its growth is significant in Malaysia. Compared with Malaysia, in Indonesia, however, the largest Muslim population country where an Islamic resurgence has been widely taking place, the growth of Islamic banks remains slower and on a smaller scale. Furthermore, recent research shows that Islamic piety does not systematically translate into the use of Islamic banks among middle-class Indonesians. Against these findings, this article highlights a relatively understudied Islamic finance institution, Islamic Savings and Credit Cooperatives, in Indonesia commonly known as Baitul Maal wat Tamwil (BMT). The BMT sector is separate from the banking sector and as such has received little scholarly attention as part of Islamic finance in Indonesia. The number of the BMTs in Indonesia has increased significantly since the 1990s and they are grass-roots Islamic financial institutions offering financial services to relatively small-scale traders in urban areas. Based on data from anthropological research in Central Java, this article argues that Islamic propagation is an important element among the BMT founders and workers. They perceive their economic activities as Islamic propagation by deeds (dakwah bil hal) to achieve social justice.

Accelerating Islamic charities in Indonesia:zakat,sedekahand the immediacy of social media

“…The 'development dakwah' was marshalled by the Ministry of Religious Affairs and supported by Muslim religious leaders and scholars. They emphasized dakwah bil-hal (Islamic propagation by deeds) in addition to dakwah bil-lisan (Islamic propagation by words), such as functionalizing zakat as social welfare (Meuleman 2011;Sakai 2014).…”

“…This represents one example of how broad the field of Islamic charity has become within the country, generating 'an unprecedented level of social activism within Muslim communities in Indonesia' (Latief 2013, 191). Today, these activities are not restricted to zakat funds but can also include other sources such as Islamic savings and credit cooperatives that seek to provide capital to small-scale entrepreneurs, and thus to contribute to the establishment of a more socially just economy in Indonesia (Sakai 2014).…”

Studi Media Filantropi Online: Pergeseran AltruismeTradisional-Karitas menuju Filantropi Integratif

“…Inisiasi praktik altruisme Islam sudah dilakukan oleh komponen umat, meskipun dalam beberapa konteks masih dengan pola pengelolaan yang sederhana.Partisipasi Komunitas Muslim Tioghoa di Surabaya dalam rangkaian aktivitas sosial menjadi salah satu bentuk geliat filantropi Islam (Mahfud, 2018).Institusi pendidikan Islam juga terlibat aktif dalam gerak filantropi Islam dengan mengambil peran dalam pemberdayaan ekonomi masyarakat. Salah satunya dilakukan oleh pendidikan Diploma III IAIN Salatiga dengan pola inkubasi bisnis masyarakat sekitar dalam lembaga Tazaka (Bahjatullah, 2016).Pola sejenis dilakukan dengan inisiasi lembaga keuangan syariah mikro dalam bentuk Baitul Maal wat Tamwil (BMT) (Sriyana, 2013).Lembaga BMT bergerak dalam penggalian potensi umat untuk digunakan dalam pemberdayaan ekonomi umat (Sakai, 2014), (Nasrullah, 2015), (Ghafur, 2013).…”

Limits to Religious Diversity Practice in Indonesia

“…As the population of Indonesia is over 240 million people, pro viding social services, particularly to the disadvantaged, is a challenging task for government agencies. Religious philanthropic organisations have success fully mobilised their own resources to undertake anti-poverty programmes and are emerging as an important part of Indonesian civil society (Sakai, 2012).…”

“…Sakai has been conduct ing field research on religious philanthropic organizations in Indonesia since 2006. Sakai also visited Pesantren Sidogiri in 2008 to study their Islamic micro finance institutions known as b m t (Sakai and Marijan, 2008;Sakai, 2014). In addition, we have also utilized published material and internet sources for this research.…”