Abstract
The Model of Group Lending has been flourishing in the Microfinance Industry. This model has been used widely to serve the needy and un-bankable group of people by lending money plus interest addition. Islamic finance also embraces this model by omitting the interest and applying the Qardul Hassan to finance the members' daily needs. This divine scheme's problem is the microfinance's sustainability since they have a burden to bear the operational cost due to the non – interest feature of the financing. This paper tries to solve this problem by utilizing the household garbage as the media to repay the Qardul Hassan financing to the Islamic Microfinance Institution (IMFI). This would enable to create more added value product, selling it to get more income and achieving the organization sustainability.
Highlights
The Model of Group Lending has been flourishing in the Microfinance Industry
A survey conducted by the International Poverty Center (IPC) shows that the growth of global poverty, from a total of 237 countries, 80 developing countries can only reach the line of low and middle income during 1984-2001 (Son, 2007)
Islamic Microfinance Institutions (IMFIS) must obtain fees from other sources in order to be able to run the Islamic lending group with good operational management and continue to use the essential Islamic financing instrument so that it remains in line with the purpose of the presence of group lending for the poor
Summary
The circular economy system is a restoration industry system. The model is made to redesign the business model by utilizing the waste products from the business that has been run (Macarthur, 2013). A circular economy is a change in the environment in the face of global needs for economic ecology It requires human economic activities consistent with the three basic principles of reducing, reusing and recycling(Lahti et al, 2018). Source : (Sitra Studies, 2016) Above is a circular economy roadmap designed by Finland in 2016 for economic sustainability up to 2025. Since Finland is a developed country with a sound waste management system, it excludes the road map's financial industry's circular economy. This creates a gap, and this research will try to combine how the financial industry can benefit and make more value-added in the concept of a circular economy
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