The Challenges of Human Capital Performance in Developing Baitul Maal Wat Tamwil in Indonesia

Abstract

One of the problem in the development of Baitul Maal Wat Tamwil is human capital. It was due to the lack of BMT practitioners who understand the principles of good business management and sariah at once. Therefore, BMT as an Islamic Microfinance Institution is considered to be less competitive compared to other Islamic financial institutions or operating system which is not in line with Sariah compliance. Human capital is defined as the knowledge, skills and experience of workers which can be contributed to the organization of the company / institution. Basic theory used is the General Theory of Human Capital and Human Capital in Islamic Perspectives. In Islamic Human Capital Development Theory, it urgues the improvement of education, skills and human being in Islamic theory which is more comprehensively in this regard, as it covers every aspect of development of a human being. The study was conducted to reveal the profile of human capital owned BMT and some of the factors that are considered to be a challenge in building employee performance of BMT. Empirical study of this research used Analytical Network Process. The amount of respondent consists of three experts (Cooperative ministry and Small and medium enterprises; Puskopsyah; Academician of UPI) and five practitioners (BMT El Dana Manfaat; BMT Itqan; BMT Dana Ukhuwah; BMT Baiturrahim; and BMT Daarut Tauhid). Respondent is expert and practitioners where in Bandung and the data collecting by interview. Based on the results of this research note that the motivation and the Islamic financial literacy BMT employee becomes a major problem. The best solution of this problem selected by the practitioner and the expert is an employee assistance BMT, the implementation of intensive training and selection process that regard between sharia knowledge and managerial skills. Therefore, this research is expected to improve the existence of BMT as Islamic Microfinance Institution for the welfare of the community.

Human Resources and Islamic Microfinance Sustainability: An Empirical Study of Baitul Maal wat Tamwil in Indonesia

“…In accordance with the simple linear regression and T-test, it can be concluded that the human resource adequacy has positive and significant impact on the sustainability of BMT. This result is consistent with the previous studies, namely Nasution and Ahmed (2015), Nurasyiah et al (2016), Rusydiana andDevi (2013), andZubair (2016) regarding the positive impact of the human resource adequacy on the sustainability of BMT.…”

“…Other than that, loose supervision and guidance reduces BMT competitiveness (Rusydiana & Devi, 2013). Moreover, Nurasyiah, Utami, Mahri, and Firmansyah (2016) further supported that an inadequate human resources of BMT is considered the main factor of the BMT competitive ability to be less power than the conventional counterpart. Then, inadequate human resource adequacy is one of the most challenging problems for BMT to be sustainable in a long time.…”

“…Furthermore, as cited in (Riwajanti, 2013), Platteau and Slewertsen (2010) emphasized that the sustainability and stability of financial institution are significantly determined some main factors, namely the investment capacity, access to technology and human resource adequacy. Nurasyiah et al (2016) also ascertained that the most determinant of BMT sustainability is human capital adequacy, whereby its adequacy is measured by several elements, such as financial literacy, skills, motivation, and experiences.…”

“…On the other hand, BMT recruits diverse staffs with diverse mindsets and diverse educational background on condition that they are ready to try and learn." Nurasyiah et al (2016) emphasized that there is a correlation between inadequate human resource and unsustainability of BMT in Indonesia. Nasution and Ahmed (2015) also supported that inadequate human resource issue destabilizes the sustainability and outreach of BMTs.…”

Issues and Challenges in Financing the Poor: Lessons Learned from Islamic Microfinance Institutions

“…Due to budget constraint, human development training cannot be done that leads to the poor performance of human resources in BMT. This issue causes many BMTs to suffer bankruptcy problem because of operational failure [11]. Focusing on the case of BMT in Pekan Baru, the study supports that lack of quality human resource and absence of specific regulations affect its performance.…”