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Jakarta Post

Ministry has high hopes for sharia microfinancing

  • The Jakarta Post

Jakarta   /   Mon, October 25 2010   /  10:52 am

The government forecasts a rapid growth in assets managed by Indonesian sharia-based microfinancing institutions, or baitul maal wat tamwil (BMTs), on the back of rising public trust, a minister said.

Speaking at the BMT Summit last week, Cooperatives and Small and Medium Enterprises Minister Syariefuddin Hasan said popular awareness of the benefits of sharia-based microfinancing had grown rapidly after the Asian financial crisis in the late 1990s.

“[BMTs] offer fairer financing schemes because all its obligations are arranged purely based on a profit-and-loss sharing basis,” Syarief said.

According to the ministry, there are presently 3,307 BMTs in Indonesia with assets of Rp 3.6 trillion (US$403.2 million). BMT serve 2.5 million of the nation’s 39 million small and medium enterprises (SMEs) and control about 6 percent of total SME credit, Syarief said.