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The purpose of this paper is to examine the influence of financial performance measures on the social norms and values of an Islamic microfinance institution (IMFI), and the actions taken by the organisational members to maintain these values in their organisation.

A qualitative case study of an NGO-based IMFI in Malaysia was undertaken, with interviews conducted with officers and managers at various organisational levels of the IMFI. Insights gained from institutional work and institutional logic were used to theorise the findings.

The IMFI used mainly financial measures to manage its performance, which were interlinked with the commercialisation approach in the industry, and the top management’s focus on the financial sustainability of the organisation. The lack of social goals and the use of reward-based financial measures did not weaken the solidified social values at the operational level, due to the independence of the operational units, the compartmentalisation of profit-making activities and the institutional work of the operational managers. The operational managers acted as carriers of this social logic. Religious values formed the pillar of the permanence of social values in the IMFI.

This study provides insights into the internal practices of IMFIs, and the role of religious values in the permanence of social logic in the context of an NGO-based IMFI. The lack of measurable social goals, as well as their rewards, does not compromise the focus on poverty alleviation and community development in view of the intrinsic rewards and accountability of the operational managers.

The purpose of this paper is to shed some lights on the process of mission drifting or abandoning poverty objective by Islamic microfinance institutions (IMFs). The paper investigates whether the extensive use of banking logic changes IMFs, from focusing on both development and financial objectives to only considering sustainability as their primary mission.

This paper adopts mixed methods by analyzing 7,200 microfinance data from Microfinance Exchange Market and reviewing annual reports and websites of 25 IMFs to examine their vision and mission statements and other related information.

The finding shows Islamic microfinance has not changed, despite increasing adoption of financial or banking performance measures. However, size and age of the institutions may affect the outcome in the future. The authors find that smaller microfinance institutions maintain genuine objective to serve the poor, as the grow larger they would be more inclined toward sustainability objectives.

The research is limited on the sample size as data on Islamic microfinance globally is limited. However, the paper looked at the global data rather than local data to compensate for this limitation. Future study would be further taking the study through qualitative methods to support the study.

This paper aims to shed some lights on the process of mission drifting or abandoning poverty objective by IMFIs. The paper investigates how has the extensive use of financing logic has changed IMFIs from focusing on both development and financial objectives to only considering sustainability as their primary mission. Arun and Hulme (2009) argued that the interaction of multiple logic within microfinance institutions, i.e. financial vs social, could pose some serious management dilemmas within microfinance institutions. Further, commercialization puts pressure on the field staffs to achieve financial targets and often neglect their poverty outreach mission to the poor. The well-known crisis in Andhra Pradesh, India where clients of microfinance institutions committed suicide after being shamed by field officers who tried to collect payments of loans (Mader, 2013; Taylor, 2011), provides a powerful case of the impact of financialization to microfinance clients.

Microfinance institutions (MFIs), including Islamic microfinance institutions (IMFIs) in Muslim countries, have spread across the globe and transformed into a new industry. However, how IMFIs in Indonesia evolved to become an important sector serving society has not been rigorously explored. Therefore, the purpose of this paper is to address the lacuna on the emergence of an industry by examining the development of Islamic microfinance sector in Indonesia.

The paper adopts the historical research method to narrate the evolution of this specific sector based on the data collected through oral history and published academic research documents during various periods of Indonesia’s economic and political milieu.

This paper demonstrates that the emergence and development of IMFIs in Indonesia has been shaped within the wider process of socio-political changes, particularly, the role of Islamic movement and politics in Indonesia.

Most studies investigating the emergence and transformation of institution or industry adopt the static approach, which has been criticised as it fails to consider the process of emergence, growth path and the survival of organisations. Hence, this paper contributes to the literature by analysing the institutional evolution by locating the institution inside its wider environmental context by using Bourdieu’s concept of field to narrate the historical development of IMFIs from its emergence and evolution to become a significant new industry in the country.

The purpose of this paper is to highlight the benefits of starting Islamic microfinance (IMF) in India and the core concepts of IMF.

Methodology of the paper is exploratory in nature and analysing of a new concept for implementation.

The brief findings have been that Indian masses, especially the poor minority community and lower middle class, are in a pathetic situation financially, as per survey analysis. IMF can play a very critical role in providing deliverance from financial slavery.

Limitations of the paper have been that the survey was done in a limited area and within a particular community and financial background.

Research finding of the paper demonstrates a practical roadmap or a blueprint on the need of starting IMF in India.

Social implications of the paper are that if the research findings are implemented and IMF were to be offered in India, the mass suicides committed specially by the Indian farmers can be contained to a great extent and can be virtually stopped.

The paper is original in concept, as IMF is totally new to the Indian scenario, and the paper is of high value for regulators to seriously think on initiating the IMF machinery in India for the benefit of all Indians.

This study aims to design appropriate micro-fintech models for Islamic microfinance institutions (IMFIs), especially Baitul Maal wat Tamwil (BMT) in Indonesia, thus enabling BMT to combine Islamic social and commercial microfinance optimally.

This study uses the analytic network process and Delphi methods, with three groups of experts as the respondents, namely, academician-regulators, BMT practitioners and Fintech practitioners.

The first results show that the micro-fintech tools needed by IMFI/BMT are digital banking, payment, peer-to-peer (P2P) financing, P2P social and e-commerce. These could be developed by a BMT alone or with an APEX or Association, which could also collaborate with an existing fintech company that specialises in micro-fintech, applying the offline to online approach. This means that commercial funding, as well as social fundraising of zakat and waqf, would be conducted online, whereas commercial financing for micro and small enterprise customers and the disbursement of zakat and waqf would be conducted offline. The second results show that the limited open ecosystem and hybrid ecosystem are the most appropriate micro-fintech ecosystems for IMFIs/BMT, with various alternative models. In addition, the private closed ecosystem preferred by BMT would be feasible if all criteria show improvement in the future.

This study is qualitative in nature. The methods used have limitations, meaning the models could be improved by incorporating other methods. Moreover, the case and respondents are all Indonesian, which means that the results may only be applicable to BMTs in Indonesia.

A BMT and/or BMT association could immediately apply micro-fintech with a limited open ecosystem, while in the future, they could apply micro-fintech with a private closed ecosystem.

The micro-fintech model could be used to optimise the collections of zakat, infaq and waqf, meaning BMT could provide more social programmes for those in need.

The growth of fintech in Islamic microfinance has occurred only recently, while only a limited number of studies have been conducted; therefore, no study exists on the development of a micro-fintech model appropriate for IMFIs, especially BMT.

This study aims to explore the risk management practices of Islamic microfinance institutions (IMFIs) to increase their financial performance and sustainability.

This research used a qualitative approach to increase financial performance and sustainability. The study population comprised the Baitut Tamwil Muhammadiyah (BTM) in Central Java Province, Indonesia. The data collection techniques included questionnaires and an in-depth interview, and the framework was validated by the main participants.

This study showed that BTMs have implemented risk management using different standards. However, such risk management is carried out partially while prioritising certain risks and using different methods. The risk of Sharia compliance is the most recognised risk, while financing and operational risks are the most anticipated, because these two risk types directly impact financial performance and sustainability. In general, a risk management model can improve financial performance and sustainability. Nevertheless, there are obstacles in implementing risk management at BTMs, which include weak human resources, the employee selection process, human resource development and a good control system.

This research explored best practices for risk management in IMFIs and may contribute to the development of risk management in such institutions to maintain the financial performance and sustainability of their services.

The purpose of this paper was to investigate the impact of credit risk-taking on financial and social efficiency and examine the relationship between credit risk, capital structure and efficiency in the context of Islamic microfinance institutions (MFIs) compared to their conventional counterparts.

The stochastic frontier approach was used to estimate the financial and social efficiency scores, in a first step. In a second step, the impact of risk-taking on efficiency was evaluated. The authors also took into account the moderating role of capital structure in this effect using the fixed and random effects generalized least squares (GLS) with a first-order autoregressive disturbance. The used dataset covers 326 conventional MFIs and 57 Islamic MFIs in six different regions of the world over the period of 2005–2015.

The overall average efficiency scores are less than 50%, where CMFIs could have produced their outputs using 48% of their actual inputs. IMFIs record the lowest financial (cost) efficiency that is equal to 28% on average. The estimation results also reveal a negative impact of nonperforming loan on financial and social efficiency. Finally, the moderating effect of leverage funding on the relationship between credit risk-taking and financial efficiency was confirmed in CMFIs. However, leverage seems to moderate the effect of risk-taking behavior on social efficiency for IMFIs.

This paper makes an initial attempt to evaluate the effect of risk-taking decision and its implication on efficiency and MFIs' sustainability. Besides, it takes into consideration the role played by the mode of governance through the ownership structure. In addition, this research study sheds light on the importance of the financial support for the development and sustainability of these institutions, which in return, contributes to a sustainable economic development.

This study aims to devise policies in implementing cash waqf system of Baitul Maal wat Tamwil (BMT) in Indonesia, enabling the BMT to optimize its commercial and social activities to better achieve outreach, sustainability and welfare impact.

This study uses the strategic assumption surfacing and testing (SAST) method, with three groups of knowledgeable respondents, including expert, BMT practitioner and regulator to formulate important and certain policies.

The results show that four types of policies are required to improve cash waqf system of BMT, including 12 internal strategic policies, 15 internal operational policies, 15 external strategic policies and 9 external operational policies, which were found to be within a “certain planning region.” All of these policies have been agreed significantly by each group of respondents, as well as by all respondents combined. The most important-certain policies include Shiddiq, Amanah and professional Nazir, inculcate Islamic values to BMT employees and members, standard operating procedure and standard operating management of cash waqf management, technical assistance for Nazir to manage cash waqf and IT systems for BMT-cash waqf administration.

The qualitative method used has its limitations, which could be improved by incorporating other methods. Moreover, the case and respondents are all Indonesian, so that the results are possibly only applicable to BMTs in Indonesia.

BMTs could adopt these policies in implementing their cash waqf management optimally.

The management of cash waqf by BMT could help improve the social activities of the Baitul Maal directly from social cash waqf and indirectly from productive cash waqf.

To the best of the authors’ knowledge, this is the first study using SAST method to determine policies needed by the BMT to upgrade its cash waqf management producing more social programs for the society.

This paper aims to develop an integrated waqf-based Islamic microfinance (IsMF) for poverty reduction in Bangladesh. Microfinance institutions (MFIs) have been constrained by the high cost of funds, high interest rate charges and poor human resource quality of the recipients. Islamic MFIs have recently evolved with the hope of overcoming these financial, ethical and human capital deficiencies faced by the conventional financial institutions. Moreover, a good number of integrated models have been proposed to enhance the role played by Islamic MFIs. Most of these models, however, lack empirical justifications.

The research uses survey techniques. A total of 381 respondents were included in the survey. The integrated waqf-based Islamic microfinance model (IWIMM) was earlier on developed using literature and intellectual discussions. There are six constructs presenting the IWIMM, namely, waqf resources, IsMF, takaful, project financing, human resource development and poverty alleviation. In the survey instrument, 45 items represent the six constructs, but only 26 items have been retained after factor analysis. Structural equation modelling has been adopted to examine the relationship among the constructs.

The results show that there are significant relationships between IsMF and takaful, waqf resources and human resource development, takaful and human resource development, IsMF and human resource development and, waqf resources and project financing. The results also indicate that poverty alleviation is possible through the integration of these constructs.

Though the paper has studied conventional and Islamic MFIs in Bangladesh, one of the populated Organisation of Islamic Cooperation (OIC) member countries and also where poverty incidence is high, further studies need to be conducted in other OIC member countries to adopt the model in line with practical and regulatory environment of those countries. Similarly, the study is based on the perception of the respondents, which limits the generalization of the result.

The paper proposed a model that has the potential of being applied for poverty alleviation programmes in most of the OIC member states.

The present paper has developed an IWIMM for poverty reduction.

This study aims to propose Islamic solutions to the Covid-19 health and economic crises, specifically using Islamic social finance (ISF) instruments, including zakat, infaq and waqf.

This study applies the qualitative content analysis method, guided by a model of composite approaches of poverty alleviation in Islam, integrated Islamic commercial and social finance (IICSF) and crisis management of Umar bin Khattab, to construct various programs and/or policy actions toward economic recovery in Indonesia.

The results show that ISF with its instruments, especially zakat, infaq and waqf could help the government and the economy to recover from the crisis. The proposed solutions include: save lives, including medical assistance using zakat-infaq and health-care waqf using waqf; save households, by creating a social safety net and graduation program using zakat-infaq; save businesses, especially micro-small enterprises (MSEs), through financial and business assistance (especially digital marketing) leveraging zakat-infaq-waqf and save financial institutions, especially micro-small financial institutions, by the development of cash waqf and the adoption of fintech and IICSF, especially in Islamic financial institutions targeting MSEs.

This study is exploratory in nature, which needs further investigations using more sophisticated qualitative and/or quantitative methods.

If the above programs using ISF instruments are implemented, the economic surplus would be re-established and the acceleration of economic recovery can be realized.

The successful adoption of ISF could at the same time reduce poverty, accelerate MSEs development and improve equitable well-being.

The Covid-19 pandemic has caused health, economic and social problems, which must be solved holistically, including ISF within IICSF.