Resumen de Effectiveness of Musharakah Financing in Empowering Small Micro Enterprises

Khusnul Hidayah, Dalila Daud, Nurazilah Zainal, Siti Sara Ibrahim

• The present study aims to analyse the effectiveness of musharakah financing for empowering micro-businesses in the perspective of entrepreneurs. This research is qualitative research using a critical analysis method.   This study uses interviews as a research instrument to find out what factors affect the effectiveness of musharakah financing in empowering micro small business of BMT entrepreneurs in the Special Region of Yogyakarta.  Entrepreneurs from two BMT in Yogyakarta had been interviewed. The results showed that BMT musharakah financing played an important role in the business development of Micro and Small Business, especially in terms of increasing business capital, easy access to take financing and a small amount of instalments. In addition, musharakah financing is effective in encouraging MSE empowerment, to increase the amount of merchandise inventory, add new types of products, expand businesses and add new equipment for business facilities. This study limits the ability to generate findings to a larger population of small-micro enterprises which obtain shariah financing from Islamic microfinance institutions (Baitul Maal Wat Tamwil) in Indonesia. The research findings can be used on how to empower small-micro enterprises with the Islamic financing and the development of Islamic microfinance institutions. This paper has contributed to the approach of empowering small micro-businesses with musharakah financing, which is considered to have a less contribution to BMT income. In addition, this study uses a critical analysis method to get a new perspective on the use of musharakah financing from the view of small entrepreneurs.