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Efficiency of Baitulmal Maal Wa Tamwil (BMT) an Effort Towards Islamic Wealth Management In Microfinance Institution

Atiqi Chollosni Nasution (Intermational Islamic University of Malaysia) 

Abstract :

The primary objective of most microfinance program is alleviating the poverty by assisting the poor to be economically independent. Measuring efficiency of microfinance program is important for enabling the microfinance institutions (MFIs) to strengthen management, sustainability. In the last twenty years, the growth of BMTs increased significantly and has contributed positively to the development of socio economic of the country. Recently, there are around 4,000 BMT’s operate and have enhanced thousand poor people life. BMT’s are responsible in collecting, managing, and distributing the funds either for charity or providing financial services for the poor people life. The main objective of the paper is to examine the efficiency of Bailtul Maal wa Tamwil (BMT) as Islamic microfinance institution in Indonesia and explain BMT’s  effort towards Islamic wealth management by applying Islamic principles on its programs. Data Envelopment Analysis (DEA) is used to examine the relative efficiency of the selected BMTs. DEA is non-parametric technical (technological) efficiency and requires input and outputs data. Fourteen BMTs are chosen as the sample of the study as it represents the biggest BMT’s operated in the poorest. 

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JMIFR Vol 11 No.1 2014 - Part 3

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