The Islamic Microfinance Orientation: An Evidence of ANP Model

The study aims to find whether the Islamic microfinance institutions are consistent with their social mission by using a group-lending approach. The practice of microfinance has complexity in the relationships among the causal and mediating factors as well as random environmental noise, which causes difficulties in determining the parameters for both that which is intangible and immeasurable. Taking those conditions into consideration, this study selected the Delphi and analytic network process (ANP) approaches as its methodology. The study showed that Islamic microfinance institutions are consistent with their genuine mission, which is to be an institution that empowers and serves the poor community. The social orientation of Islamic microfinance which is dominant and high enough from conventional microfinance shows that the moral value of Islamic principles is quite instrumental in shaping Islamic microfinance preference. In the latest developments in microfinance practice, the dominance of the interests of microfinance institutions that focus on achieving financial sustainability (commercial orientation) allows the tendency for microfinance to shift its genuine mission away from social orientation. Therefore, this study is to fill the gap from the lack of research that examines the shifting mission of Islamic microfinance. Islamic microfinance practices using a group lending approach are still quite consistent in reaching poor community groups. This study is only limited to Islamic microfinance that uses a group lending strategy, for further studies it is recommended to conduct a study on Islamic microfinance that uses an individual lending strategy.