Abstract
In this article, we examine the role and ethics of IBF in the context of development and address the critique that IBF is merely a rebranding of the conventional sector and merely exploits and further marginalises beneficiaries for profit. We focus on Islamic microfinance (IMF) in Indonesia and explore how it is applied to poverty alleviation. In addition to a review of the research to date, we perform a qualitative sociolegal study involving 27 interviews of two IMF institutions’ (BMT Muda and BPRS Mitra Syariah in East Java) beneficiaries, field staff, management and industry stakeholders. Our fieldwork investigates how institution staff members apply Islamic rules and norms when implementing programs, noting any discrepancies between the rhetoric of the Islamic ethical framework for development and the practice. We ultimately argue that while IMF is still a work in progress that would benefit from further regulatory and institutional reform, it is generating wide-ranging economic, social and spiritual benefits. We find evidence of social empowerment and brotherhood in IMF, emblematic of Islamic ethics, as well as genuine contributions to the economic and social development of Indonesia
Funding source: University of Sydney Law School
Award Identifier / Grant number: LSSS Award (2019.05)
Acknowledgement
We would like to thank Professor Dr Raditya Sukmana of Universitas Airlangga for his excellent advice and assistance in facilitating the field research upon which this article is based.
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Articles in the same Issue
- Frontmatter
- Editorial
- Introduction: Law and Development in the Islamic World
- Articles
- Legal Origin, Institutional Quality, and Islamic Finance Development: Does Shari’a Matter?
- Building Islamic Ethics into Development: Exploring the Role and Limitations of “Islamic” Microfinance in Poverty Alleviation—An Indonesian Case Study
- Islamic Finance as a Vehicle to Promote Improved Intellectual Property Rights in the Gulf Cooperation Council
- Shari’a Law and Its Impact on the Development of Muslim and Non-Muslim Business Relations in the United Arab Emirates
- Anti-Money Laundering Regulation and Practice of Islamic Banks in the United Arab Emirates: A Case Study
- Addressing Instability in Thailand’s Deep South with Law and Development
- Note
- COVID-19: Public Access to Information – Legal and Institutional Frameworks
Articles in the same Issue
- Frontmatter
- Editorial
- Introduction: Law and Development in the Islamic World
- Articles
- Legal Origin, Institutional Quality, and Islamic Finance Development: Does Shari’a Matter?
- Building Islamic Ethics into Development: Exploring the Role and Limitations of “Islamic” Microfinance in Poverty Alleviation—An Indonesian Case Study
- Islamic Finance as a Vehicle to Promote Improved Intellectual Property Rights in the Gulf Cooperation Council
- Shari’a Law and Its Impact on the Development of Muslim and Non-Muslim Business Relations in the United Arab Emirates
- Anti-Money Laundering Regulation and Practice of Islamic Banks in the United Arab Emirates: A Case Study
- Addressing Instability in Thailand’s Deep South with Law and Development
- Note
- COVID-19: Public Access to Information – Legal and Institutional Frameworks