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Microfinance practices versus sustainable welfare

Author

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  • Dessy Isfianadewi

    (Universitas Islam Indonesia)

Abstract

This study primarily investigates microfinance practices for sustainable community welfare. Microcredit aims to provide credit to poor people to help empower communities and reduce poverty. Community empowerment strategies can be carried out by increasing the productivity of poor communities to increase their income. A basic approach that emphasizes that the poor move from their current situation to a better position by empowering MSMEs through the distribution of microcredit by micro-financial institutions. Changes that will result in sustainable prosperity, decreasing inequality between regions, and reducing community income gaps. This research will use a qualitative approach using the case study method, which does not use statistical generalizations but uses logical and replicative generalizations. This research uses multiple cases with varying characteristics as research informants. Two microfinance institutions and ten cases of MSMEs will be selected in this research. The study was conducted at Sharia Microfinance Institutions as providers of microcredit and MSMEs receiving microcredit in the Southern region of the Special Region of Yogyakarta, Bantul. This district was chosen because Bantul has the highest poverty rate. This condition is the focus of attention for maximum treatment. This research will use three data collection methods: interview, observation, and documentation, to maintain the data's validity and reliability. Data triangulation was used to test the validity of the data. The data analysis process in this research uses two stages: descriptive analysis and within-case analysis. The research results found that microfinance practices carried out through Sharia Microfinance Institutions (SMFI), apart from focusing on providing accessible financing facilities, have also provided direction in developing MSMEs and taking action towards community welfare. SMFI regularly provides business development training to MSMEs

Suggested Citation

  • Dessy Isfianadewi, 2023. "Microfinance practices versus sustainable welfare," International Journal of Business Ecosystem & Strategy (2687-2293), Bussecon International Academy, vol. 5(4), pages 79-89, October.
    • Handle: RePEc:adi:ijbess:v:5:y:2023:i:4:p:79-89
    DOI: 10.36096/ijbes.v5i4.457
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    References listed on IDEAS

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    1. Fiala, Nathan, 2018. "Returns to microcredit, cash grants and training for male and female microentrepreneurs in Uganda," World Development, Elsevier, vol. 105(C), pages 189-200.
    2. Yue Li & Zariyawati Mohd Ashhari & Yaojun Fan, 2022. "Financial sustainability and capital leverage of microfinance institutions in China: The mediating role of profitability," Cogent Economics & Finance, Taylor & Francis Journals, vol. 10(1), pages 2153411-215, December.
    3. Takeshi Inoue & Shigeyuki Hamori, 2013. "Financial permeation as a role of microfinance: has microfinance actually been a viable financial intermediary for helping the poor?," Applied Financial Economics, Taylor & Francis Journals, vol. 23(20), pages 1567-1578, October.
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