Universal Journal of Accounting and Finance Vol. 1(2), pp. 70 - 77
DOI: 10.13189/ujaf.2013.010205
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Sustainability of Islamic Micro Finance Institutions (IMFIs)

Siti Khadijah. A. M^1,*, N. E. P. Saleh², M. F. Kamarudin³, Haryadi A ^4
1 Accounting Research Institute (ARI) & Academy of Contemporary Islamic Studies (ACIS), Universiti Teknologi MARA, 40450, Malaysia
² Faculty of Business, Universiti Selangor, 40000, Malaysia
³ Faculty of Business Management, Universiti Teknologi MARA, 40450, Malaysia
⁴ Takaful Mikro Indonesia (TAKMIN), Bogor, 16310, Indonesia

ABSTRACT

Islamic micro finance was introduced as an option for the low-income people to get funds in order for them to uplift their well-being and to get themselves out of the poverty. Nevertheless, the borrowers face unwarranted event such as illness, death, fire or theft that may cause improbable setbacks which in turn lead to non-performance of financing. These probable risks will certainly affect the sustainability of the micro finance institutions thus defeating the very reason of its establishment. In this respect, the implementation of risk mitigating instrument via micro Takaful to under privilege group is an interesting issue to ponder. This study explores the implementation of micro Takaful as a way of mitigating the potential risk among micro finance borrowers. A series of interviews was conducted with the practitioners of the respective institutions in the selected sample country (Indonesia) to get a closer look at the practice. Finding of the study indicates that micro Takaful helps a lot in sustaining Islamic micro finance institutions in the country. Nevertheless, this new trend is still lacking of empirical research, more so when we talk about its offering in the market. Hence, further research in this area is necessary and very much recommended.

KEYWORDS
Micro Insurance, Micro Takaful, Sustainability, Islamic Micro Finance (IMF)

Cite This Paper in IEEE or APA Citation Styles
(a). IEEE Format:
[1] Siti Khadijah. A. M , N. E. P. Saleh , M. F. Kamarudin , Haryadi A , "Sustainability of Islamic Micro Finance Institutions (IMFIs)," Universal Journal of Accounting and Finance, Vol. 1, No. 2, pp. 70 - 77, 2013. DOI: 10.13189/ujaf.2013.010205.

(b). APA Format:
Siti Khadijah. A. M , N. E. P. Saleh , M. F. Kamarudin , Haryadi A (2013). Sustainability of Islamic Micro Finance Institutions (IMFIs). Universal Journal of Accounting and Finance, 1(2), 70 - 77. DOI: 10.13189/ujaf.2013.010205.