The Role of Baitul Maal wat Tamwil in Empowering Msmes in Indonesia: a Study of Indonesian Islamic Microfinance Institutions

Abstract

Purpose: This study aims to determine the problems in Baitul Maal Wat Tamwil (BMT) in empowering the economy of the ummah in Indonesia.   Theoretical framework: The main topics discussed are the concept and systematics of Baitul Maal Wa Tamwil, the role of BMT in the economic empowerment of MSMEs and people experiencing poverty, and the problems BMT faces.   Design/methodology/approach: This study uses a descriptive qualitative method that conveys data verbally and emphasizes contextual issues. Data were obtained from 24 BMT managers spread across East Java.   Findings: The results of this study confirm that there are various problems perceived by BMT, including a lack of understanding of sharia economics owned by managers, DPS and members, limited capital, low participation of the general public, BMT regulations, existence, weak entrepreneurship skills of members, lack of sense of ownership of BMT presence, and implementation techniques and management that are not optimal.   Research, Practical & Social implications: This research contributes to classifying the problems that are currently occurring in several BMTs in East Java so that evaluations in several sectors can be identified that must be improved in order to optimize the role of the BMT in helping marginal communities to be free from poverty.   Originality/value: This research classifies the problems of BMT in Indonesia, not only discussing it from an economic perspective but this research also discussing BMT regulations.