CAPITAL FINANCING OF SMES BY UTILIZING MICRO WAQF BANK TO ALLEVIATE RURAL POVERTY

Fransky Purba Suharno Widiasworo Putra, Abdul Aziz Ahmad, Suharno Suharno

Abstract


The great potential of the Micro Waqf Bank (MWB) for the national economy is to improve economic development based on the potential of regional resources and the empowerment of populist economies in the countryside through strengthening small and micro enterprises (SMEs) as a continuation of poverty alleviation. Religious and social activities become an economic activity such as trade, agriculture, plantation, and home industry activities.

How about the benefits of MWB in order to increase public financial inclusion, especially SMEs among other things, the ease of accessing capital that is easier will be discussed in this paper. Because to obtain financing from banks, collateral and requirements that are not easy are required and high credit interest, while to obtain financing at MWB for capital loans not exceeding 3 million rupiahs is not needed. collateral and requirements such as being multiplied, because MWB only charges fees and profit sharing margins equal to three percent per year.

The purpose of this paper discusses the management and financing system in MWB. MWB different from the one in general because management involving pesantren with consideration in rural/remote areas there are always pesantren, and of course the pesantren environment feels more familiar and close to people in the countryside so that the dissemination and distribution of loan funds is easier and the loan financing pattern is created by a joint group system. That is expected to be able to bridge the gap in access to finance so that participants are able to develop businesses in order to reach their dreams and improve family welfare. Then MWB will provide assistance and training by holding regular weekly meetings with borrowing groups. Weekly group meetings must be held once a week, as well as activities to pay weekly installments. This MWB is not permitted to take deposits from the community because it has a focus on community empowerment through financing along with business assistance. The hope is that in the future MWB will continue to grow in number so that it is expected to be a quick solution in providing access to capital or financing for rural communities that are not yet connected with formal financial institutions.

Keywords: SMEs, Micro Waqf Bank, Rural Poverty, Empowerment, Financing

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References


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