Shariah rural bank in empowering the small and micro enterprises: strategies and differentiations

This study aims at exploring the business networks of Shariah rural banks to compete in multi-business competition; the differentiation of BPRS in competitive business environments in building market share; and the domino effects of the Shariah rural bank lending activity in the community development of the rural areas. This study applied qualitative approach with in-depth interview with the manager, financing unit, financed customers and the micro and small enterprises actors, observation and documentation. The findings show that Shariah rural bank developed a market share network using religious emotion, approaching public figures, leaders of Islamic organisations, and individual customers including non-Muslim. SRB applied mosque-based empowerment to train the actors of SMEs, build product innovation and social capital. These differentiation indicates BPRS is not merely a business agent for the sake of economy but also carries out public education, and social function, especially in creating social cohesion, social responsibility and social solidarity and human capital.