Maulana, Hartomi (2019) MAQASHID SHARI’AH ON ISLAMIC MICROFINANCE AND THE ISSUES AND CHALLENGES IN PROMOTING ISLAMIC MICROFINANCE IN INDONESIA: A SCHOLAR’S PERSPECTIVE. MAQASHID SHARI’AH ON ISLAMIC MICROFINANCE AND THE ISSUES AND CHALLENGES IN PROMOTING ISLAMIC MICROFINANCE IN INDONESIA: A SCHOLAR’S PERSPECTIVE, - (-). pp. 415-429. ISSN 978-99917-86-42-1

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Abstract

Shari’ah-based economy framework with attributing social objective is a broad term of Shari’ah-based finance. Focusing on equal distribution in economic growth indicates realizing of maqasid Shari’ah which is posed by Islamic economic objectives. Islamic microfinance emerges based on Islamic financial principles in providing financial services to the poor. Beside free interest-based, promoting economic justice based on the ethical responsibility is another characteristic of Islamic microfinancing. With such characteristics, Islamic microfinance institutions (MFIs) should easily achieve maqashid Shari’ah. This study attempts to analyze Islamic microfinance practitioners and scholars’ views on what to extent the role of Islamic MFIs in achieving maqashid Shariah. The study also examines the issues and challenges emerge in promoting Islamic MFIs in Indonesia. Qualitative approach with semi-structures interview used in the study. Seven respondents consisting of practitioner and academician are interviewed based on their expertise. Results of this study indicates Islamic microfinance institutions (MFIs), in this case Baitul Maal wa Taamwil (BMTs) are not really in line with maqasid Shari’ah. This is due to the most of the current practices of BMTs provide murabahah as the dominant financing, indicating impose the clients with margins higher. This does not reflect justice or equal distribution income for the customer. The study also documents that human capital, regulation issue, the role of the government and lack of capital issues are the most important issues and challenges raised in promoting BMTs in Indonesia. The study suggests that to minimise overlapping financial cooperative rules, the needs for collaboration among government institutions such as Ministry of Cooperative and OJK to synergise cooperative law regarding BMT and microfinance.

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