IslamicFinance.de

The Indonesian Financial Services Authority (OJK) notes that there are currently 71 active fintech startups in the country. These startups provide diverse products and services, including payment gateways, lending, banking services, insurance services, pawn shops, or online financial advisory. This has also led the OJK to pay more attention to the sector, with hopes of developing appropriate regulation. The regulations that will be issued by OJK should not be too rigid, so as to provide a balanced climate. Some regulatory concerns include business licensing, business operation, governance, supervision and inspection, reporting obligations, and equities. All in all, the seriousness of OJK and other relevant parties to provide supportive regulations will hopefully bring strategic action.

PBMT is the coordinating body of BMT (Baitul Maat wat Tamwil / House of Social and Business) organizations in Indonesia. BMT itself is a microfinance institution which also acts as a social enterprise, using the principles of Sharia economy to lift people out of poverty. In Indonesia, the BMT helps the poor through a systematic step-by-step mechanism. First, the very poor people are given a grant from the donors’ donations, and guidance to start their micro-enterprises. Once they are on the right track, they will be granted a non-commercial loan with no interest. In the last stage, these people would ideally have established their own micro-enterprises.

According to a March 2014 data from the Central Statistics Agency, 28 million Indonesians are still below the poverty line, which is defined as living on less than IDR 10,091 (USD 0.86) per day. Of this number, 63% people live in the rural areas, while the remaining 37% have been urbanized. Jamil Abbas, the General Manager of PBMT Social Ventures in Singapore, thinks there is one solution that may be effective in solving this problem, which is through the ‘BMT’ concept. The BMT stands for Baitul Maal wat Tamwil, which can be informally translated to “The House of Social and Business”. BMT is an Indonesian model of Islamic microfinance institution.