Surviving amidst pandemic: Indonesian Islamic microfinance experience

Abstract

The purpose of this study is to investigate the Indonesian Islamic microfinance institutions' (IMFIs) condition, and their strategies to survive and to explore their contribution during the pandemic by combining and synthesizing the result of all previous studies. To achieve that goal, this research uses a systematic literature review method by mining all data available which in addition makes this paper different from other previous works. This enables us to provide a deeper, broader, and more comprehensive understanding of the topic. Google Scholar is set as the database for three reasons. This research found that Indonesian IMFIs are affected by the pandemic and classified into three categories based on the severity of the impact: Severely hit, affected yet stable, and IMFIs that grow during the pandemic. Indonesian IMFIs had in total 6 types of strategies to survive during the pandemic: Active and passive approaches, common and innovative schemes, as well as persuasive and administrative activities. The study also found the contributions of Indonesian IMFIs during the pandemic and classified them into two categories financial and non-financial contributions. This research is unique by delivering comprehensive non-segregated data and well-synthesized condition of IMFIs in entire Indonesia during the pandemic. The results of this study give policymakers a fundamental ground to develop proper policy in fostering IMFIs after the pandemic. IMFI practitioners should also take benefit from the results by mirroring, modifying, or improving the strategies to face future economic turbulences.