Lender of the Last Resort of Islamic Microfinance Institutions

Imroni Maward, Tika Widiastuti

2017

Abstract

As a financial intermediary institution, Islamic Microfinance Institutions (IMFI), that are known as Islamic Financial Cooperatives, accepts short-term deposits and disburses to long-term loans. This situation makes IMFI desperately need a lender of last resort (LOLR). So far, there has been no LOLR for Indonesian IMFI, so they formed its own LOLR. This study aims to find out how IMFI formed LOLR and find the best LOLR model for IMFI in Indonesia. This study use a qualitative approach with case study analysis. Subjects of this study are IMFIs in Indonesia that selected purposively with 30 managers as key informants. Triangulation of sources and techniques are used to confirm and test the veracity of the information. The results show that there are four models of LOLR of IMFIs; individual, other IMFIs, Islamic bank, and Islamic secondary cooperatives. The best model of LOLR is secondary cooperatives, because the form of IMFIs in Indonesia are primary cooperatives. Some primary cooperatives build a secondary cooperative as LOLR and places excess liquidity. All members of secondary cooperatives have deposit as reserve requirement on Central Bank in banking industry.

Paper Citation

in Harvard Style

Maward I. and Widiastuti T. (2017). Lender of the Last Resort of Islamic Microfinance Institutions.In 1st International Conference on Islamic Economics, Business, and Philanthropy - Volume 1: ICIEBP, ISBN 978-989-758-315-5, pages 734-739. DOI: 10.5220/0007088907340739

in Bibtex Style

@conference{iciebp17,
author={Imroni Maward and Tika Widiastuti},
title={Lender of the Last Resort of Islamic Microfinance Institutions},
booktitle={1st International Conference on Islamic Economics, Business, and Philanthropy - Volume 1: ICIEBP,},
year={2017},
pages={734-739},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0007088907340739},
isbn={978-989-758-315-5},
}

in EndNote Style

TY - CONF

JO - 1st International Conference on Islamic Economics, Business, and Philanthropy - Volume 1: ICIEBP,
TI - Lender of the Last Resort of Islamic Microfinance Institutions
SN - 978-989-758-315-5
AU - Maward I.
AU - Widiastuti T.
PY - 2017
SP - 734
EP - 739
DO - 10.5220/0007088907340739