Economic inclusion of un-bankable micro-scale traders in Indonesian traditional market: Learning from micro-scale traders in Islamic financial co-operative

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Abstract

Central Bank in Indonesia has launched an inclusive economy strategy, whose aim includes people of low income and micro-scale business owner. Micro-scale traders in rural traditional market in Indonesia in general face the challenge of limited access to formal financial institution, since they are considered un-bankable. The difficulty of accessing capital from banking financial institutions becomes an obstacle to increasing the scale of their business. The situation often causes market micro-scale traders to fall into the practice of loan sharks. As an alternative, traditional market traders turn to Islamic microfinance co-op. This paper studies the case of micro-scale traders in a rural are in Central Java, in their relationship with a local Islamic Financial Cooperative (Syariah Baitul Maal Wat Tamwil) that provides financial products/services. Using qualitative approach, the findings field research conducted from 2016 until 2018 points out to the success of Islamic Financial Coop as an inclusive financial institution for the local micro-scale traders, which supports promotion of sustained economic growth and productivity, despite (or, because of) its traditional way of trust-building.

Original languageEnglish
Article number01008
JournalE3S Web of Conferences
Volume74
DOIs
Publication statusPublished - 12 Dec 2018
Event2018 International Conference Series on Life Cycle Assessment: Life Cycle Assessment as A Metric to Achieve Sustainable Development Goals, ICSoLCA 2018 - Jakarta, Indonesia
Duration: 24 Oct 201825 Oct 2018

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