Risk mitigation strategy for agency problems in micro business financing of Baitul Maal wa Tamwil: a qualitative SWOT analysis
Baitul Maal wa Tamwil (BMT) as an official Islamic microfinance institution in Indonesia with a dual function, namely, a commercial function and a social function in empowering the poor, has several issues and challenges related to agency problems that occur in micro business financing. By using...
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| Main Authors: | , , |
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| Format: | Book Chapter |
| Language: | English |
| Published: |
Springer Nature
2024
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| Subjects: | |
| Online Access: | http://irep.iium.edu.my/116879/1/2024%20IFNTLR%20Andri%20Risk%20Mitigation.pdf http://irep.iium.edu.my/116879/ https://link.springer.com/chapter/10.1007/978-3-031-48770-5_49 |
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| Summary: | Baitul Maal wa Tamwil (BMT) as an official Islamic microfinance institution
in Indonesia with a dual function, namely, a commercial function and a social
function in empowering the poor, has several issues and challenges related to agency
problems that occur in micro business financing. By using SWOT analysis, this
study aims to explore the strengths, weaknesses, opportunities, and challenges faced
by BMTs in mitigating risks related to agency problems in micro business financing
to further develop mitigation strategies for these risks. In-depth interviews with five
experts from academics and practitioners in the field of Islamic microfinance were
used to obtain the data. All interviews were recorded for verbatim transcription to
be coded in several stages and then analyzed. This study finds that the agency problem
risk mitigation strategy in micro business financing in BMT can be seen through
five lenses, namely, contract implementation, guarantee systems, selection procedures,
supervision and monitoring systems, and human resource capacity building
programs. Future research can focus on the effectiveness of BMT strategy implementation
to be able to provide strategic policy direction in mitigating the risk of
agency problems in micro business financing in BMT. |
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