Designing sustainable Islamic Microfinance to enhance the accessibility of poor borrowers in Indonesia: an appreciative intelligence approach

Abstract

This paper provides a sustainable Islamic microfinance design using an appreciative intelligence approach to enhance the poor borrowers’ accessibility to micro financing in Indonesia. This study aims to identify problems faced by BMT in Indonesia and find the solution to implement sustainable Islamic microfinance. It uses a qualitative analysis by adopting an appreciative intelligence approach. Data was collected by interviewing the Chairman and officer of Central BMT (Induk Koperasi Syariah), Jakarta in 382 BMT’s throughout Indonesia. The steps: (i) reframing problems into possibilities, (ii) appreciating the positive meaning and promise of every being, experience, situation, and (iii) linking the generative strength of the present with the preferred vision. The results show that BMT faced four problems in implementing sustainable Islamic microfinance, namely lending limit regulation, high funding pricing to the borrowers, APEX BMT realization, and productive use funding. Several solutions have been suggested by using the appreciative intelligence approach. This paper adds to the literature on Islamic microfinance by enabling researchers and practitioners to apply the appreciative intelligence model of sustainable Islamic microfinance. It also contributes towards enriching the knowledge in the Islamic microfinance and sustainable Islamic microfinance.