BANK WAKAF MIKROTriyonoAHMAD BUCHORIAdvisor Strategic Committee

Micro Waqf Bank or Bank Wakaf Mikro (BWM) is a branding name of Islamic microfinance institution with certain business model and characteristics established in Pesantren (Islamic boarding schools).

The branding name of BWM is given by the President of the Republic of Indonesia, Joko Widodo, during the launching of the first BWM in Pesantren KHAS Kempek in Cirebon, West Java, on October 20, 2017.

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“Low income population must have access to financial services. Access for the low income population to credit is limited since they normally do not have collateral. Bank Wakaf Mikro can provide a solution to this issue. As opposed to commercial bank which requires complicated administrative procedures and collateral, Bank Wakaf Mikro does not require such procedures.”

The President of the Republic of Indonesia, Joko Widodo

What is Bank Wakaf Mikro (BWM)?

Pesantren derives from the sixteenth century, when learning centers were established, known as a place of learning for the Islamic faithful. In earlier times, Pesantren were a rural phenomenon, interacting very closely with local communities. Pesantren is led by Kyai (scholar) who provides education, gives advice to villagers, and legitimizes local ceremonies. Pesantren has strategic assistance in enhancing community welfare.

With the potency of 28,194 Pesantrens stated by Ministry of Religion, Pesantrens as religion based - educational institutions have big influence to empower community and play role in eradicating inequality and alleviating poverty, particularly community members around Pesantrens.

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Why BWM established in Pesantren ?

THE PURPOSE AND OBJECTIVES OF THE PROGRAM

The purpose of this program is :

“to empower communities around Pesantren through the establishment of BWM with a counselling assistance pattern”.

The objectives of this program are:

1. Maximizing the role of Pesantren in empowering productive poor communities.

2. Building and strengthening the socio-economic function surrounding Pesantren in the form of professional, accountable, and independent BWM through the development of the Indonesian Micro Business Community in Pesantren (KUMPI).

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In order to support government programs in alleviating poverty and income inequality, and to increase financial access to wider community, OJK facilitates the establishment of Bank Wakaf Mikro.Since 2014, OJK has also been mandated by the Law of Microfinance to supervise microfinance institutions, including BWM, in Indonesia

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“We would like to give special attention to the low income population who cannot obtain formal loans or qualify for financing from formal financial institutions. It is our hope that Bank Wakaf Mikro will be able to provide financing in the near future and also form groups consisting 5 to 10 people to help us provide coaching programs.. “Chairman of the Board of Commissioners OJK,

Wimboh Santoso

Role of OJK in Establishment of BWM

Establishment Capital and Working Capital

Financing Counseling Assistance\IDR1 mio – IDR3

mio(USD71 - USD214)

Donor Donating Funds

Characteristics:Providing Financing with Guidance and Coaching ProgramsNon Deposit Taking InstitutionsLow margin rate, eq. 3% p.a.Financing without collateral Group based (joint liability)

LAZNAS (National Islamic Charity Institution)

Customers (productive low income population) 6

Guidance and Coaching Programs

Business Model of BWM

Donation funds have critical role in implementing the business model of BWM. To get low profit sharing scheme, BWM requires cheap fund. To achieve the objectives, the funding of BWM includes personal and corporate

social responsibility funds originated from donors. Donors are people who have concern for empowering productive - low income

community and alleviating poverty in Indonesia.

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Main Stakeholder in Implementing Program

DONATION APPEAL

2 BWM

1 BWM1 BWM

1 BWM

The Development of Bank Wakaf Mikro (BWM)

2.875 KUMPI

22.668 customers

53 BWM

Rp 10,1 billion

13.275 customers

(Outstanding)

Rp 29,33 billionTotal Financing disbursed

(OJK, September 2019)

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INDONESIA COUNTRY SHOWCASENovember 2019

THANK YOU

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