Baitul Maal Wat Tamwil as an Islamic Financial Inclusion Institution Model Towards a Sustainable Development

Abstract

This research is based on the issues of many informal sector businesses that do not have access towards capital from formal financial institutions, especially Islamic ones that are still considered to be excluded and hard to reach. The research aims to find the best model in empowering informal sector businesses based on sharia principles conducted by Baitul Maal Wat Tamwil (BMT), in which equivalent to the sharia micro finance institution. It adopted a qualitative descriptive approach and employed SWOT analysis of the ten BMTs which actively have given funding and empowered informal sector business in Bandung Raya. The model of empowerment implemented by BMT, is divided into three clusters with the following indicators such as: the utilization of productive economic, mentoring and training. The general results of this research indicate that the majority of BMTs is in the second cluster, with characteristic activities only productive economic empowerment through Islamic micro financing and still not contribute to the social function in running mentoring and training to informal sector businesses. Additionally, based on the results of the SWOT analysis, it is found that in general BMT has the potential to develop due to the principle of justice and its closeness to the micro business in which has not been accessed or touched by other financial institutions. On the other hand, the potential is still constrained by the inadequacy capacity of Human Resources in providing business advisory services at the same time. The implication of the research shows the urgent needs for competent human resources in developing BMTs members to be professional entrepreneurs who have good spirituality in empowering informal sector business community.