Abstract
The purpose of this study is to analyze sharia microfinance strategies to encourage the economy at the community level such as the Integrated Business Centers (BMT) based on Sharia principles. Primary data were obtained from questionnaires on 283 BMT managers in Java. Using PLS analysis, strengthening corporate performance is measured by Islamic business ethics with intellectual capital as mediation. This model construct is unique and provides value in this study. The results showed that the strength of the external environment did not directly affect the performance of the BMT; Islamic business ethics and intellectual capital have positive and significant effects on BMT performance; and Intellectual capital is proven to mediate the indirect effect of the strength of the external environment and Islamic business ethics on BMT performance. Islamic Business Ethics in its application greatly supports the vision and mission of BMT. With the good implementation of Islamic Business Ethics, the level of customer confidence from BMT increases and will automatically increase BMT performance. Strength of the External Environment able to influence BMT performance after mediation from the Intellectual Capital. Intellectual Capital owned by BMT employees is an inseparable part and greatly supports BMT performance. This is evident in this study in which qualified intellectual capital from the employees had a good impact on improving BMT performance.
Highlights
According to statistics Data, Indonesia is the country with the largest number of Islamic financial institutions in the world with more than 5,000 institutions consisting of 34 Sharia Banks, 58 Takaful operators or Sharia insurance, 7 Sharia Venture Capital, 163 Sharia Rural Credit Banks, 4,500-5,500 Sharia Cooperatives or Baitul Maal wat Tamwil (BMT), and a Sharia pawnshop institution (Republika.co.id, 2019)
Because the SRMR value of the model is good on the saturated model and the estimated model is below 0.08, the model is declared perfect fit and is suitable for testing the research hypothesis Based on the test results, if the value of P value 1.96 Ho is rejected and concluded that the strength of the external environment and the Islamic business ethics variables have a significant effect on company performance variables, whereas if the value of p value> 0.05 Ho is not rejected and it is concluded that the strength of the external environment and the Islamic business ethics variables have no effect on company performance variables (Hair et al, 2011)
While the variables of Islamic business ethics and intellectual capital variables used in this study turned out to have an influence in improving the performance of BMTs in Java towards a better direction
Summary
According to statistics Data, Indonesia is the country with the largest number of Islamic financial institutions in the world with more than 5,000 institutions consisting of 34 Sharia Banks, 58 Takaful operators or Sharia insurance, 7 Sharia Venture Capital, 163 Sharia Rural Credit Banks, 4,500-5,500 Sharia Cooperatives or Baitul Maal wat Tamwil (BMT), and a Sharia pawnshop institution (Republika.co.id, 2019). In 2010, in just 30 years, the number of BMTs in Indonesia had grown to 3,307 units. In 2014, the number of BMTs had reached 5,000 units with 4,700 billion assets and customers reaching more than three million people (Hasbi, 2015). BMT problems tend to face liquidity when customers withdraw their money. This liquidity problem has the potential to be a problem in almost all BMTs, since the majority of the main funding sources for financing (66.75%) come from customers or members of BMT. BMT health assessment determined by the government through BMT Health Assessment Criteria According to KUKM Regulation No 07 / Per / Dep.6 / IV / 2016, only emphasizes the financial and operational aspects of BMT. While at the level of the concept of company performance, performance is measured in financial / economic and operational performance, and in the form of non-financial performance
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