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The Accounting and Reporting Challenges of Islamic Saving and Loan Cooperatives (BMT) in Indonesia

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Author Info

  • Ersa Tri Wahyuni

    ()
    (Accounting Department, Faculty of Economics, Padjadjaran University)

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    Abstract

    The rapid development of BMT in Indonesia is not followed by the development of reporting regulations and accounting standards. The precise definite legal status of BMT is somehow in doubt and here is no accounting standard specially made for BMT. The role of BMT in microfinance institution is not small. The number of BMT has risen from 300 at the end of 1995, to 1501 at the end of 1997, and to 2470 BMT in 1998 (Timberg, 1999). While the definite number of BMT is hard to determine, currently there are more than 3000 BMTs all over Indonesia, with consolidated asset of more than IDR. 1 trillion, employing more than 30,000 workers, more than 40% of which are women. BMT serves 2 millions depositors and distribute micro credit to more than 1.5 millions micro entrepreneurs (Azis, 2000). This paper discusses the challenges faced by BMT managers for their accounting activities and in generating financial reports. This paper also discusses’ the development of BMT in Indonesia and the development of accounting standards applicable to BMT. Surveys and interviews with many BMT managers and NGOs staff were conducted to gain information related to research objectives. There are four major challenges that BMT’s managers and directors face in their accounting and reporting process: Inadequate knowledge of Islamic banking law, Unavailability of Accounting standards for BMT, Human resources challenges and IT and infrastructure challenges. This paper also proposes some recommendations as a result of the research findings.

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    File URL: http://www.equitablepolicy.org/wopacs/201102.pdf
    File Function: First version, 2011
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    Bibliographic Info

    Paper provided by Department of Accounting, Padjadjaran University in its series Working Papers in Accounting Studies (WoPAcS) with number 201102.

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    Length: 17 pages
    Date of creation: May 2011
    Date of revision: May 2011
    Handle: RePEc:unp:wopacs:201102

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    Related research

    Keywords: Islamic Accounting; Saving and Loan Cooperatives (BMT); Microfinance;

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