Citation:

Nurmanjaya Dahri Kusumah, Santi Novani. "The Economic Impact, Contributing Factor and Value CoCreation of Community-Based Microfinance - An Exploratory Study of Bank Infaq in South Tangerang District Indonesia" International Research Journal of Economics and Management Studies, Vol. 3, No. 6, pp. 317-326, 2024.

Abstract:

Poverty remains a major challenge in Indonesia. Understanding poverty in Indonesia demands a good understanding of Micro, Small, and Medium Enterprises (MSME), as the majority (99%) of total enterprises absorb more than 97% of the Indonesian workforce and contribute 60% of the GDP. If managed well, MSME would significantly play a major role in shaping the country’s economy. Conversely, impartiality could cause the MSME remain struggle with classic challenges: access to funds and access to the market. These two key factors limit their ability to survive, sustain, and grow. The credit proportion from the formal Banking sector to MSME is at around 20%. This is an opportunity for Non-Bank Financial Institutions (NBFI) to fill the gap. One NBFI scheme is Bank Infaq, a Sharia-based microfinance system with unique characteristics of inclusive community empowerment and a joint liability system. A Bank Infaq branch in the South Tangerang district in Indonesia is taken as an exploratory case study to measure its impact and understand its value to the community it has served. With the key important measures explored, a robust and workable scheme and system can be formalized and can further be replicated by other microfinance institutions; hence, community empowerment and development can be spread faster towards the noble goal of alleviating poverty in Indonesia.

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Keywords:

Bank Infaq, Microfinance, Economic impact, Value co-creation.