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Sustainability Of Islamic Microfinance In Indonesia: A Holistic Approach

Sustainability Of Islamic Microfinance In Indonesia: A Holistic Approach
Besse Wediawati, Nury Effendi, Aldrin Herwany, Dian Masyita
Universitas Padjadjaran, Academy of Strategic Management Journal Volume 17, Issue 3, 2018, Print ISSN : 1544-1458, Online ISSN: 1939-6104
Bahasa Inggris
Universitas Padjadjaran, Academy of Strategic Management Journal Volume 17, Issue 3, 2018, Print ISSN : 1544-1458, Online ISSN: 1939-6104
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This study aims to address the sustainability issue of Islamic Micro-Finance Institutions (IMFIs) in Indonesia. Previous researches on IMFI sustainability generally viewed the financialand social or the spiritual aspect as segregated elements. There is hardly any empiricalinvestigation that integrated these three aspects in an effort to achieve sustainability. Thus, thisresearch is expected to fill the gap by proposing a holistic approach for achieving IMFI sustainability. This study used survey method on 98 units of sharia cooperatives/Baitul Maal Wattamwil (BMTs) using a structured questionnaires based on Likert scale of 5 points. The previous holisticapproach was developed based on the literature review and the esponses of IMFI’s experts.Partial least square path modeling has been adopted to examine the relationship among theconstructs. The results show that financial, social and spiritual intermediation has a positively significant effect on IMFI’s sustainability in Indonesia. These results also show that IMFI’s sustainability problem can be overcome by applying holistic approach. The study is focused on Islamic Micro Finance Institution (IMFI). The future study is expected to observe the impact of this holistic approach on the lives of the poor and on theperformance of micro-enterprises as beneficiaries of IMFI. This study is the first empirical oneto examine the sustainability of IMFI using a holistic approach. It also provides newcontribution to the IMFI’s intermediary concept from the double bottom line-as known so far-has become a triple mission of IMFI.

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