RECONSTRUCTION THE BANK FOR POOR FAMILY

THROUGH ISLAMIC LINKAGE PROGRAM

(CASE STUDY IN INDONESIA)1
Khairunnisa Musari2
Rusli Simanjuntak3
Indonesia is renowned for its large scale micro enterprise sector. However, many of these
do not have adequate access to the bank financing, particularly in rural areas. A wide variety of
microfinance institutions provide financial intermediation for micro scale borrowers. One is
Bank for Poor Family (Bank Gakin).
Bank Gakin is actually a microfinance institution that initiated by local government in
Indonesia since 2005. It uses the principle of joint responsibility among its members. Bank
Gakin have gained positive response from the poor because easier to obtain loan for venture
capital. But, in Islamic perspective, the practices of Bank Gakin still do not sharia compliance.
Bank Gakin provides rate of interest for loans despite relatively low and regarded not burden to
the borrower.
So, this paper attempts to: (1) Introduce the Bank Gakin as a policy of local government in
Indonesia to finance the working capital for poor family; (2) Reconstruct the scheme of Bank
Gakin into Islamic linkage program that bridging the Islamic banks and microfinance
institutions; (3) Propose an institutional arrangements for the Bank Gakin and Islamic banks to
issue sukuk as tool for managing the lack and excess of liquidity.
Finally, this study proves that demand for Islamic microfinance services is huge. In order
to enhance the financial inclusion, this study encourages Islamic banking to assist the needs of
the poor and micro enterprise sector. If Islamic banks have not addressed the needs of financing
among the poor and micro entrepreneurs, Islamic microfinance can be a missing component in
Islamic finance.
Keywords: Poor Family, Linkage Program, Islamic Bank, Islamic Microfinance
JEL Classification: G21, G23, G24, G28, I38, 017

Paper to be presented in IIU Islamabad-IRTI IDB 4th International Conference on Inclusive Islamic
Financial Sector Development 2015, International Islamic University, Islamabad, Pakistan, 17-18th November
2015.
2

Lecturer, Faculty of Islamic Economic and Business, State Institute of Islamic Studies (IAIN) Jember. E:
khairunnisamusari@yahoo.com
3

Ph.D of Islamic Economic and Finance Candidate, Trisakti University. E: rsimanjuntak04@gmail.com.