BMT Al Falah Sumber Cirebon
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Transcript of BMT Al Falah Sumber Cirebon
BAITUL MAAL WA TAMWIL (BMT) AL FALAH
SUMBER, CIREBON
Author:
Herika Rainathami, S.Sos., M.Si.
Module IV.
Integrated Microfinance Management for Sustained Poverty Reduction
INTEGRATED MICROFINANCE MANAGEMENT
UNIVERSITAS PADJADJARAN
2011
BAITUL MAAL WA TAMWIL (BMT) AL FALAH
SUMBER, CIREBON
By Herika Rainathami
1. INTRODUCTION
As originally visualize, microfinance is the condition of tiny loans to
poor individuals who establish or expand a simple income-generating
activity, thereby supposedly facilitating their breaking out from
poverty. It is believe that microfinance has been essential to the fate
of the poor in many developing countries, creating jobs and raising
incomes in the poorest communities, helping to empower the poor,
and generally starting a bottom-up economic and social development
process.
When Muhammad Yunus started making small loans to local
villagers in the 1970s, it was doubtful where the idea would go.
Around the world, many state-run banks had already tried to provide
loans to poor households, and they left a legacy of inefficiency,
corruption, and millions of dollars of worthless subsidies. Economic
theory also provided plenty warnings against lending to low-income
households that lack of collateral to secure their loans. But Yunus
vowed to one day make profits—and he argued that his poor clients
would pay back the loans reliably.
Today, Muhammad Yunus is recognized as a visionary in a
movement that has spread globally, claiming over 65 million
customers at the end of 2002 (Armendáriz de Aghion, 2008). The
clients are served by microfinance institutions that are providing
small loans without collateral, collecting deposits, and selling
insurance. Most surprisingly the customers are those who had been
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written off by commercial banks as being unprofitable. Many beliefs
and see the changes as a revolution in thinking about poverty
reduction and social change, and not just a banking movement.
Islamic economy also participated in developing the economy in
order to support the business. One of the Islamic financial institution
that continues to grow in accordance with economic development
and population is the Baitul Maal Wattamwil (BMT).
“Baitul Maal Wa tamwil (BMT)" is a small finance institution which
operates using a mix concepts of “Baitul Maal” and “Baitul Tamwil”
with the targets, aims and scale on small business sector. The term
“Baitul Maal" originally means House of Money and “Baitul
Tamwil” means House of Expense or Islamic Bank. The term “Baitul
Tamwil” has a strong root from Islamic movement since 1940.
The main purposes of BMT is to ensure that the money are being
used accordingly to its productivity not by time constraint as
common bank usually operate. If we borrow money from banks, the
interest are set by the banks and calculated by time constraint. If we
borrow money from BMT, there will be no interest. Instead, BMT
will calculate the productivity of the money borrowed and then make
agreement to share the profit.
Islamic Economics is the economic concept that originates in the
Quran and sunnah (hadith). The main features of Islamic Economic
transaction is to avoid or delete these practices:
1. Maisyir
2. Gharar
3. Risywah
4. Riba
- Gambling
- Speculative
- Bribe
- Interest
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2. FOUR CRITICAL CHALLENGES
We can reduce all the many questions just mentioned into four challenges
inherent in providing financial services to BOP customers:
2.1. Understanding the clients.
Generally, the poor need the same kinds of financial services as
middle-class customers. However, it is a classic mistake to treat
products for the poor simply as scaled-down versions of those for
higher-income customers. As with any market, a deep understanding
of specific needs is required to get product design right. Local
customs and economies, literacy, gender roles, religious taboos, or
ethnic discrimination may need to be addressed. For example,
microfinance institutions in the Middle East have learned how to
approach Muslim clients who worry that it might be a sin to pay
interest or riba.
2.2. Reducing costs
The small size of accounts and transactions associated with the poor
is the fundamental challenge to profitability. The cost barrier is
highest for the poorest clients and those in ruraland remote areas.
Rather than just squeezing costs down, seriousrethinking is needed.
Radical product simplification is one key, and technology may be
another. When a Nepali woman can receive money from her
husband working in Delhi without leaving her village, it will be
technology and creative distribution channels that make it possible
2.3. Informality and risk management
BOP (bottom-of-pyramid) clients appear risky because they are
economically vulnerable and operate informally. Much of the risk is
only a perception, however, and actual risks can be managed with
the right techniques. Microfinance institutions using these best
practices demonstrate consistently high repayment performance, so
much so that in a 2008 survey of top risks, microfinance providers
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and investors ranked credit risk only tenth, well behind costs (which
was fourth) and a range of institution management issues (Rhyne,
2009).
2.4. Building the industry
Few contributors have the strength to create or enter a virgin market
alone. Other contributors help develop the market, attract partisan
(for example, information-technology providers or payments
networks), and speak with a united voice before regulators.
Possibilities for cooperation in industry-building need to be
identified
3. BMT AL FALAH PROFILE
The Meaning of BMT:
1. Baitu
2. Al-Maal
3. At-Tamwil
- home
- Property (social)
- Property (commercial)
BMT = Institute for Independent Business, Integrated Microfinance
Institutions that operate under the principles of Sharia that help
community managed their commercial property as well as social
aspects.
3.1. Location:
BMT Al Falah operated on its own building in Jl. Sultan
Agung 9, Sumber, Cirebon, West Java.
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Pic. 1. Front of BMT Al Falah
3.2. The Meaning of the Logo:
The Yellow pillar represents the economic
states that already bend over and have to be
supported by the green pillar in order to be
able to stand strong.
3.3. The History:
BMT Al Falah was established as part of the 1000 BMT Movement
proclaimed by President Soeharto. BMT Al Falah was inaugurated by
Mr. Ir. Tb. Hisni on 10 November 1995 (17 Jumaditsts Ani 1416H)
and began operations on December 14, 1995 (22 Rajab 1416H).
Originally sheltered under the supervision YINBUK - PHBK Bank
Indonesia, BMT Al Falah was established by the initial investors as
followed:
1. Ir. H.Tb.Hisni (Head BAKORWIL Priyangan)
2. H. Oman Sahroman (KADIN Chairman Kab. Cirebon)
3. H. Syurief AM (Entrepreneur)
4. H. Ahmad Kusaeri (Employers)
5. H. Didi Karsidi
6. H. Masrana (Young Executive ASTRA INTERNATIONAL)
7. Hj. Hilda
8. Hj. Susie
9. H. Misro (RIP)
3.4. The Founding Fathers
The Founding Fathers, or shall we say Managers, are consist of
four persons from four different education backgrounds:
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Pic. 2. BMT Al Falah Logo
1. Ir. Ida Widiahastuti (Chemical Engineering)
2. Marini, SH. (Law)
3. Tarjodipuro, SE. (Economy)
4. Ahmad Hamdan, S.Ag. (Religion)
3.5. Vision
"Being Islamic financial institution with quality and blessing"
3.6. Mission
a. Popularizing the model of Islamic economics
b. Providing professional services
c. Expansion of networks and partnerships
d. Provide more value to the harmony and prosperity of the
community
3.7. Law and regulation
BMT Al-Falah Islamic Financial Services Institution is
incorporated under the laws of the cooperative. BMT Al Falah
was started with legality as Self-Help Groups under the
supervision of PINBUK based on the script co-PHBK YINBUK
with Bank Indonesia. In 1998 received the legality of Legal
Cooperation with Number 09/BH/KDK-10.17/IX/1998 on
September 23, 1998.
Hopefully, BMT contribution to the economic communities is to
introduce and make the Islamic financial institutions as a
compulsory option in Economy of Islam. BMT Al-Falah
Establishment background in the presence of Indonesian Muslim
Intellectuals Association program (ICMI) Cirebon District in
order to alleviate poverty through the establishment of a BMT in
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Sub-Region of Cirebon, and the introduction of national
movement by President Soeharto in December 1995.
3.8. Product provided by BMT Al Falah
3.8.1. Financing Products:
1. Financing Murabaha (Sale and Purchase): Financing provided
to members for purchase goods that will be used as working
capital. Financing is provided for the short term should not be
over 6 (six) to 9 (nine) months or more. The advantage for
BMT is obtained from the elevated price.
2. Musharaka Financing (Profit Sharing): Financing provided in
the form of partial capital to members of the overall capital.
Parties can BMT involved in the process of management.
Division keun proportional profits made in accordance with
agreement of both parties
3. Ijarah Financing: lease financing
4. Qard Financing: Is the soft loans granted to members who
truly lack the capital/ to them desperately in need for purposes
of emergency nature. Customers (members) sufficient to
restore loan in accordance with the value given by BMT.
5. Ar-Rahn Financing: Ar Rahn means BMT can take collateral
to make sure that member who have loan remember to
maintain their productivity, on the other hand, work harder to
fullfil their obligation and promises to the BMT.
3.8.2. Savings Products:
1. Mudharabah savings:
Working capital financing provided by BMT to members,
where business management is fully handed to members as
debtors. In these members (customers) to provide business and
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systems management. The results and benefit will be divided
in accordance with collective agreement.
i. Education Savings (Simpanan Pendidikan)
ii. 'Eid al-Fitr Savings (Simpanan Idul Fitri)
iii. Qurban Savings
iv. Hajj Savings
2. Mudharabah Deposits
i. Savings Deposits Mudharabah (SiTobah)
ii. Education Savings Plan (SiReady)
3. Wadiah Savings
i. Principal Deposits
ii. Compulsory Deposits
iii. Principal Deposits of Candidate Members
iv. Simpati
3.9.3. Baitul Maal Program:
3.9.3.1. Zakat, fund raising, Infaq and Shodaqah
Mostly distributed to poor people near BMT Al Falah.
3.9.3.2. Distribution of Zakat funds, Infaq and Shodaqah in the
program:
a. Working capital assistance through the fund
Qhordul Hasan, mostly for the customer in needs.
b. Providing scholarships and compensation for
orphans and children of poor families
c. Quick action response to the disaster relief
program, people who were in debt, the cost of
birth, death expenses, scholarships, etc.
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3.10. Inclusive Finance
The vulnerability threat the lives of low-income people. Without
insurance, any shock such as illness, accident, death, or natural
disaster such as flood and fire can send a family into a descending
economic spiral. Uninsured shocks can also turn a good borrower
into a defaulter, so BMT as lenders have a special interest in
making sure that their clients are insured.
3.10.1. Welfare Insurance
But knowing the risk and benefit of it, BMT Al Falah has
not yet have the kind of insurance needed, such as life
insurance or health insurance. Instead, because of lack of
human resources and funds, BMT Al FAlah have a
product that is called a welfare insurance. With Rp.
5.000,- (USD 0.6) per month for 3 years, welfare
insurance gives around Rp. 25.000,- (USD 3) per day per
person for maximum of 10 days per year incase some
shock such as illness and accident happens.
3.10.2. Health Insurance
On the first quarter of 2011, BMT Al Falah receive Rp.
15.000.000,- aid from the government (Social
Department) to be used for health insurance known as
Askesos or social health insurance for its member.
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3.11. Organization Chart
Pic. 3. Organization Structure of BMT Al Falah
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3.12. Membership
BMT Al Falah is a cooperative organization, therefore all of its
customer is also its member. Most members is from the nearby
market where they make their money productive each and every day.
They also consists of micro enterprises and small enterprises as the
tabel 1 shown bellow. According to Armendariz (2008), in 2006
Microcredit Summit Campaign report, seven out of ten microfinance
clients are women. In BMT Al Falah, the number is somewhat
similar. Around 64,87% of the customers are women.
Tabel 1. Cooperative Member
No. Membership Male Female Total1. Micro enterprise 3.066 5.694 8.760
2. Small enterprise 2.074 3.796 5.840
Total 5.140 9.490 14.630
Percentage 35,13% 64,87% 100%
The customers are 79.83% from microenterprises from the nearby
market, as follow:
Tabel 2. Customer Location
No. Market Name No. Market Name1 Pasar Arjawinangun 10 Pasar Lemahabang
2 Pasar Astanajapura 11 Pasar Mandirancan
3 Pasar Cipejeuh 12 Pasar Pagi
4 Pasar Gebang 13 Pasar Pabuaran
5 Pasar Harjamukti 14 Pasar Perumnas
6 Pasar Jagasatru 15 Pasar Plered
7 Pasar Kanoman 16 Pasar Plumbon
8 Pasar Karangsembung 17 Pasar Sumber
9 Pasar Kramat Dukupuntang
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Tabel 3. Reason for Saving
No. Reason Rank
1. Interesting Profit sharing 1
2. The procedure is easy 3
3. The location is easy to reach 4
4. According to Syariah (Islamic Law) 6
5. It is safe 5
6. Closeness and trust to the managers 2
Tabel 4. Reason for Financing Transaction
No. Reason Rank
1. Interesting Profit sharing 5
2. The procedure is easy 1
3. The location is easy to reach 3
4. According to Syariah (Islamic Law) 6
5. It is safe 4
6. Closeness and trust to the managers 2
As we can see in tabel 3 and 4, closeness and trust to the managers
hold a significance role in running a financial institution such as
BMT. Ibu Ida, the manager, said it took them almost five hard
working years to gain trust from the community.
Another important factor is that the payment arrangement in BMT is
according to syariah or Islamic Law, where there are no interest,
even though if we calculate the revenue could reach as high as 4%
per month, that is higher than common banks. But the customer feel
satisfied because every revenue is based on discussion and agreement
between BMT and its customers.
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4. BMT AL FALAH, FINANCIAL
BMT Al Falah started fifteen years ago with only four personels and
five million rupiah grant from ICMI has now have 40 personels and
assets value worth more than ten billion rupiah. The profit sharing is
3,5% with revenue of profit around 2,3% in 2010. As stated by
Robinson (2002) about 8,699 generic rural bank continued to serve 5.6
million clients in 1998—as the country’s financial system collapsed, so is
BMT Al Falah that still survived in its 3rd year.
Tabel 5. Own Capital
Own Capital Rupiah (Rp.)a. savings 102.529.485,00
b. compulsory savings 23.122.132,00
d. reserve fund 12.670.966,00
e. Grant 20.000.000,00
Total 158.322.773,00
In principle, the compulsory saving program is meant to help clients
build up assets over time and develop the discipline of saving. But to
many, these involuntary savings accounts look instead like a way for
the bank to acquire relatively cheap capital and to secure a form of
collateral from borrowers (Armendariz, 2005). The same principle is
used in BMT Al Falah.
Tabel 6. Loan Capital
Loan capital Rupiah (Rp.)a. Bank credit 1.118.936.173,00
b. NBFI Credit 680.633.335,00
c. Capital investments 736.309.269,00
Total 2.535.879.177,00
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Tabel 7. Value of Business Volume
No. Business Rupiah (Rp.)1. The principal business, savings
and loans
12.460.085.000,00
2. Other business, mortgage and
consumer
100.000.000,00
Total Value 12.560.085.000,00
Tabel 8. Asset Value
No. Asset Value in Rupiah (Rp.)1. Asset value in 1995 5.000.000,00
2. Asset value in 2010 10.970.085.000,00
Total Asset 10.975.085.000,00
5. BMT AL FALAH, SOCIAL ACTIVITIES
As mentioned earlier that Baitul Maal Wa tamwil also have means as
House of Social Activities, BMT Al Falah also have a few social
activities such as:
a. Distribution of free food in the area of Cirebon Sindanglaut
b. Free Ta'jil (food for breaking the fasting) division in the Sumber
Region of Cirebon District.
c. Providing aid to disaster-stricken areas
d. Compensation for the elderly majlis taklim (praying group)
e. Distribute meat from qurban (scarificed meat)
6. COMPUTERIZED SYSTEM AND SYSTEM OPERATING
PROCEDURE (SOP)
Nowadays, BMT Al-Falah already have 3 branches and 1 help
branch. It has used computer application systems, namely a computer
application programs to handle operational and administrative
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activities of BMT is user friendly because it uses Bahasa Indonesia,
flexible, and have high accountability. All transactions have been
using the On-line computer application system. In carrying out all
work activities, BMT Al-Falah has been using the Standard
Operations Management (SOM) and Standard Operating Procedure
(SOP), where all activities referring to.
Further on, BMT Al Falah have a plan to build IT system to reach
their customers in da’wah or spreading the words of God. Hoping
that it will also remind them to keep their promises to BMT.
With the support and supervision of the various parties, BMT AL
Falah are expected to become a leader for other BMT and became a
healthy, quality and blessings institution, and also have high
accountability and can rise the belief in promoting the weak
economic welfare of society.
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BIBLIOGRAPHY
Armendáriz de Aghion, Beatriz and Jonathan Morduch. 2005. The Economics of Microfinance. Massachusetts: The MIT Press.
Armendáriz de Aghion, Beatriz and Nigel Roome. 2008. “Gender empowerment in Microfinance”, Microfinance: Emerging Trends and Challenges. Massachussets: Edward Elgar Publishing.
Bateman, Milford. 2010. Why Dosen’t Microfinance work? the destructive
rise of local neoliberalism. London: Zed Books.
Rhyn, Elisabeth. 2009. Microfinance for Bankers and Investors: understanding the opportunities and challenges of the market at the bottom of the pyramid. New York: McGraw-Hill.
Robinson, Marguerite S. 2002. The Microfinance Revolution Volume 2: Lessons from Indonesia. Washington DC: The World Bank.
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