Islamic Socio-Legal Institutions and Poverty Alleviation in Indonesia: Examining the Institutional Frameworks of Microcredit and Microinsurance
Tanvir Ahmed Uddin and Maaz Rahman
This paper provides an analysis of the role of Islamic microfinance institutions in poverty alleviation in Indonesia and presents recommendations for improvement in service quality and outreach. The paper provides an outline of Islamic financial law and relevant Indonesian laws, as well as the underperformance of the implementation of Islamic microfinace in the form of BMTs (Baitul Mal Wat Tamwil) and BPRS (Bank Perkreditan Rakyat Sharia). In addition, the implementaion issues surrounding Islamic microfinance (mikrotakaful) are analysed. The paper presents tangible solutions to achieve poverty alleviation through a holistic and integrated approach from both a regulatory and institutional perspective.