Sustainability of BMT financing for Developing Micro-enterprises
The aim of this study is to analyze the sustainability of Islamic micro-financing for developing micro-enterprises (ME). We use the sample of Baitul Mal Wat Tamwil (BMT), as Islamic microfinance institution in Indonesia. Two approaches will be used to explore the sustainability, i.e., technical efficiency (using data envelopment analysis (DEA) and level of outreach. The results indicate that: first, generally the efficiency of BMTs is relatively low. Scale efficiency also indicates that BMTs are operated still far from optimal scale. The results suggest that there is gap in efficiency scores obtained from CCR and BCC models. This indicates that BMTs still face the managerial problems. Second, Islamic micro-financing is useful for developing micro-enterprises and contribute a great social benefits to the society in several ways. Although the profitability efficiency of BMTs is relatively low, since generally BMTs have made a profit and social benefit, Islamic financing can be predicted to be sustainable – able to provide viable Islamic financing.
|Date of creation:||Feb 2008|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://mpra.ub.uni-muenchen.de
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Ana Marr, 2002. "Studying group dynamics: an alternative analytical framework for the study of microfinance impacts on poverty reduction," Journal of International Development, John Wiley & Sons, Ltd., vol. 14(4), pages 511-534.
- Ro-Kyung Park & Prabir De, 2004. "An Alternative Approach to Efficiency Measurement of Seaports," Maritime Economics and Logistics, Palgrave Macmillan, vol. 6(1), pages 53-69, March.
- Richard S. Barr & Kory A. Killgo & Thomas F. Siems & Sheri Zimmel, 1999. "Evaluating the productive efficiency and performance of U.S. commercial banks," Financial Industry Studies Working Paper 99-3, Federal Reserve Bank of Dallas.
- M. A. Baqui Khalily, 2004. "Quantitative approach to impact analysis of microfinance programmes in Bangladesh-what have we learned?," Journal of International Development, John Wiley & Sons, Ltd., vol. 16(3), pages 331-353.
- Khandker, Shahidur R., 2003.
"Microfinance and poverty - evidence using panel data from Bangladesh,"
Policy Research Working Paper Series
2945, The World Bank.
- Shahidur R. Khandker, 2005. "Microfinance and Poverty: Evidence Using Panel Data from Bangladesh," World Bank Economic Review, World Bank Group, vol. 19(2), pages 263-286.
- Igor Jemric & Boris Vujcic, 2002. "Efficiency of Banks in Croatia: A DEA Approach*," Comparative Economic Studies, Palgrave Macmillan, vol. 44(2-3), pages 169-193, September.
- Pitt, Mark M. & Khandker, Shahidur R. & Cartwright, Jennifer, 2003. "Does micro-credit empower women : evidence from Bangladesh," Policy Research Working Paper Series 2998, The World Bank.
- Paul B. McGuire, 1999. "Policy and regulation for sustainable microfinance: country experiences in Asia," Journal of International Development, John Wiley & Sons, Ltd., vol. 11(5), pages 717-729.
- Luo, Xueming, 2003. "Evaluating the profitability and marketability efficiency of large banks: An application of data envelopment analysis," Journal of Business Research, Elsevier, vol. 56(8), pages 627-635, August.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:13746. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht)
If references are entirely missing, you can add them using this form.