Efficiency of Pesantren’s Baitul Maal Wa Tamwil (BMT): An Effort towards Islamic Microfinance Institution

Abstract

Pesantren and Baitul Maal wa Tamwil (BMT) are not seemingly equal things to compare, ones are filled with spiritual and religious knowledge, where the other are located in economic environment. But time proves that Pesantren are really serious in developing an economic network among students, through Baitul Maal wa Tamwil. BMT based on Pesantren has an important role in driving the poor and micro enterprises (MEs) to empower them, alleviate poverty, reduce unemployment, as well as enhance economic development in Indonesia, especially Pesantren environment. Pesantren’s BMT should be sustainable, effective, efficient and affordable to be able to serve the poor and MEs with excellence, so that the analysis of their efficiency is a must. The main aim of the paper is to analyze the technical efficiency (including pure technical and scale efficiencies) of some Pesantren’s BMT using Data Envelopment Analysis (DEA). The results show that, generally the efficiency of Pesantren BMTs is relatively high. Scale efficiency also indicates that operating of BMTs are close to optimal scale. This result suggests that most Pesantren BMTs still focus on baitut tamwil activities, extending financing as their main business. While the future, BMTs should play a more active role in baitul maal activities as their main business