MICROCAPITAL BRIEF: Perhimpunan Baitul Maal wat Tamwil Indonesia Implements Islamic Financial Empowerment Program Including Grants, Subsidized Loans, Market-Rate Credit

Perhimpunan Baitul Maal wat Tamwil (BMT) Indonesia, a financial cooperative coordinating 150 of Indonesia’s microfinance institutions that employ the BMT model of Islamic finance, has implemented a three-stage financial empowerment program that aims to benefit low-income individuals in the country. In the first stage of the program, individuals receive non-repayable grants until they are able to earn a living by starting their own business activities. Those who successfully complete the first stage receive no-interest loans with the goal that the individuals will have “established their own micro-enterprises”[1]. The final stage involves assisting these entrepreneurs with further financial services to grow by converting the no-interest loans into commercial loans [1].

By Hye In Arielle Oh, Research Associate

About Perhimpunan Baitul Maal wat Tamwil Indonesia (PBMT Indonesia)

Perhimpunan Baitul Maal wat Tamwil Indonesia (PBMT Indonesia) was established as a financial cooperative in 2005 with the responsibility of coordinating the activities of its member Baitul Maal wat Tamwil (BMTs), which are Islamic microfinance institutions (MFIs) that offer financial services to low-income individuals in Indonesia. In addition to providing capital and financial services through microfinance, PBMT Indonesia also aims to raise education levels, improve health care, enhance skills and competencies of microentrepreneurs and develop social programs. As of 2015, PBMT reported total cumulated assets of USD 800 million, a membership base of 2.2 million, 150 member BMTs and 550 branches in Indonesia.

Sources and Additional Resources:

[1] Global Indonesia Voice: “Empowering the Poor through Islamic Microfinance,” http://www.globalindonesianvoices.com/21892/empowering-the-poor-through-islamic-microfinance/

[2] Asian Venture Philanthropy Network: “PBMT Social Ventures,” http://avpn.asia/organisation/pbmt-social-ventures/

[3] PBMT Social Ventures: “Background,” http://pbmtsv.com/about-us/background/

MicroCapital Universe Profile: “Perhimpunan Baitul Maal wat Tamwil Indonesia (PBMT Indonesia),” https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Perhimpunan+Baitul+Maal%C2%A0wat+Tamwil+Indonesia+%28PBMT+Indonesia%29

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