Abstract
Indonesia has a strong presence of microfinance sector with the number of Islamic Microfinance Institutions (IMFIs) estimated to be around 5,000 currently. Microfinance is an effective tool in alleviating poverty in Indonesia due to the limited access to financial services by the poor who accounted for approximately 96 million Indonesians (or 37% of the total population), living on less than USD 1.90 a day. In the absence of collateral and steady income, the poor are considered too risky to be given credit facilities by the formal financial services providers and living in remote areas has also limited their access to formal financial services. This study aims to examine the poverty alleviation efforts from the perspective of the IMFIs in view of their direct involvement in the process and having rich information about financial issues facing the borrowers. The managers also understand about financial inclusion agenda as well as financial guidelines and regulations issued by the relevant authorities. A total of 34 managers of Baitulmaal Wa Tamwil (BMTs), which registered under the Sharia Cooperative Centre (INKOPSYAH) are taken as respondents from the Jakarta, Bogor, Depok, Tangerang and Bekasi (JABODETABEK) areas. The first instrument was a survey questionnaire, and the second one was an in-depth interview to outline data related to the model design. The findings of this research are expected to contribute to better decision-making for the BMTs to further enhance its role in alleviating poverty. The findings also elaborate several dimensions to improving financial inclusion among the poor including providing financial services, implementing Islamic principles, significant policies, community-based framework concept and training financial education. This research highlights the need for a variety of strategies to warrant success of poverty alleviation efforts by BMT.
Highlights
As the dynamic of the investment changes it enhances the importance of decision making which is the part of the Behavioral finance
The result shows that risk aversion is an important criterion in decision making but the investor that are risk averse are more logical and rational (Hunjra et al, 2012)
These believe and information create or force the investor to take any decision it can be an overreaction of available information or it can be a suitable decision for the betterment of the firm
Summary
As the dynamic of the investment changes it enhances the importance of decision making which is the part of the Behavioral finance. If the organization makes an appropriate decision of investment it will result in an increase of firm productivity and outcome (Mayfield et al, 2008) Researchers such as Kengatharan and Kengatharan (2014), Qadri and Shabbir (2014), Nofsinger and Varma (2013), highlighted the positive relationship between behavioural factors and decision making of investment in the stock market by an investor. This research focuses on the detailed analysis of the experience of the investor as well as the corporate governance and other factors It covers both theoretical and observed involvement of the factor in the decision making of investment. The study is limited to the investment decisions of the Iraqi investors it covers the moderating factors such as age, gender and financial education of the investors which is the contribution of the current study and in this way this study adds value to the current state of knowledge in the domain of behavioral finance
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