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


  • Ersa Tri Wahyuni

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


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.

Suggested Citation

  • Ersa Tri Wahyuni, 2011. "The Accounting and Reporting Challenges of Islamic Saving and Loan Cooperatives (BMT) in Indonesia," Working Papers in Accounting Studies (WoPAcS) 201102, Department of Accounting, Padjadjaran University, revised May 2011.
  • Handle: RePEc:unp:wopacs:201102

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