Reconfiguring the Legal Standing of Baitul Maal wat Tamwil: Examining the Tension between Cooperative and Corporate Models in Indonesia
DOI:
https://doi.org/10.64780/rolsj.v1i3.92Keywords:
Cooperative Law, Islamic Microfinance, Legal Status, Microfinance RegulationAbstract
Background; Baitul Maal wat Tamwil (BMT) plays a dual role by combining community welfare with financial services. The enactment of the 2013 Microfinance Law, however, obliges BMT to operate either as a cooperative or a limited company, producing uncertainty about its legal foundation.
Aims; This paper seeks to clarify the legal position of BMT and to assess how this regulatory demand influences its original character and the development of Islamic microfinance in Indonesia.
Methods; Using a normative juridical method, the study reviews statutory provisions, legal doctrines, and academic debates. The comparison of cooperative and corporate frameworks with Islamic financial principles is used to highlight regulatory gaps and tensions.
Result; The findings suggest that the cooperative option preserves BMT’s communal values, while the corporate path offers efficiency and capital access. Both, nevertheless, may undermine the institution’s hybrid nature as a socio-financial body.
Conclusion; The study concludes that BMT faces an unresolved tension between legal compliance and mission continuity. To maintain its distinctive role, policymakers should craft regulations that acknowledge BMT’s hybrid identity and strengthen its contribution to inclusive economic growth.
References
Aasoglenang, T. A., Bonye, S. Z., & Yiridomoh, G. Y. (2023). Framework for building synergies of the traditional and formal political adjudicatory institutions in conflict resolution in north-western Ghana. Cogent Social Sciences, 9(2), 2268974. https://doi.org/10.1080/23311886.2023.2268974
Alhammadi, S. (2024). Islamic finance as a driver for enhancing economic sustainability and innovation in the GCC. Journal of Science and Technology Policy Management. https://doi.org/10.1108/JSTPM-11-2023-0206
Allioui, H., & Mourdi, Y. (2023). Exploring the Full Potentials of IoT for Better Financial Growth and Stability: A Comprehensive Survey. Sensors, 23(19), 8015.
https://doi.org/10.3390/s23198015
Amelia, E., Fatimah, C. E. A., & Amalia, E. (2025). Strengthening The Halal Industry in The Micro-Small Business Sector Through The Development of An Integrated Islamic Microfinance Institution Model. International Journal of Accounting and Economics Studies, 12(4), 627–636. https://doi.org/10.14419/ym1jdq07
Ascarya, A. (2024). An investigation of waqf-based Islamic micro financial institution models to identify the most effective model for Indonesia. Journal of Islamic Accounting and Business Research.
https://doi.org/10.1108/JIABR-12-2022-0325
Bartles-Smith, A. (2025). Military chaplains and equivalent religious personnel under international humanitarian law. International Review of the Red Cross, 107(928), 19–69. https://doi.org/10.1017/S1816383125000037
Beaumont, P. D., Wilhelmsen, J., & Gjerde, K. L. (2024). Reimagining NATO after Crimea: Defender of the rule-based order and truth? Contemporary Security Policy, 45(3), 396–425. https://doi.org/10.1080/13523260.2024.2349393
Bellazzecca, E., & Biosca, O. (2022). Intended and unintended effects of specialized regulation on microfinance institutions’ double-bottom line management. Annals of Public and Cooperative Economics, 93(4), 977–999. https://doi.org/10.1111/apce.12360
Berti, M., & Pitelis, C. (2022). Open Team Production, the New Cooperative Firm, and Hybrid Advantage. Academy of Management Review, 47(2), 309–330. https://doi.org/10.5465/amr.2019.0416
Crossley, R. M., Elmagrhi, M. H., & Ntim, C. G. (2021). Sustainability and legitimacy theory: The case of sustainable social and environmental practices of small and medium-sized enterprises. Business Strategy and the Environment, 30(8), 3740–3762. https://doi.org/10.1002/bse.2837
Edris, M. M. A. M., Bashir, M. S., & Hasan, B. M. M. (2023). REVITALIZING AND INVESTING ABANDONED LAND IN MALAYSIA THROUGH ISLAMIC MICROFINANCE. Malaysian Journal of Syariah and Law, 11(2), 396–404.
https://doi.org/10.33102/mjsl.vol11no2.512
Esperon-Rodriguez, M., Tjoelker, M. G., Lenoir, J., Baumgartner, J. B., Beaumont, L. J., Nipperess, D. A., Power, S. A., Richard, B., Rymer, P. D., & Gallagher, R. V. (2022). Climate change increases global risk to urban forests. Nature Climate Change, 12(10), 950–955. https://doi.org/10.1038/s41558-022-01465-8
Firdaus, M., Kamello, T., Sunarmi, & Saidin. (2023). Role of Micro Finance Institutions to Support Micro, Small, and Medium Enterprises: A Comparative Legal Culture Study of Bangladesh, Philippines, China, India and Indonesia. International Journal of Criminal Justice Sciences, 18(1), 383–397.
Frega, R. (2021). Solidarity as Social Involvement. Moral Philosophy and Politics, 8(2), 179–208. https://doi.org/10.1515/mopp-2019-0008
Frémeaux, S., Grevin, A., & Sferrazzo, R. (2023). Developing a Culture of Solidarity Through a Three-Step Virtuous Process: Lessons from Common Good-Oriented Organizations. Journal of Business Ethics, 188(1), 89–105. https://doi.org/10.1007/s10551-022-05314-8
Ghandour, D. A. M. (2025). Assessing the Influence of Financial Crises on Income and Wealth Distribution: Islamic Finance Perspectives. In E. Akkas (Ed.), Islamic Economics and Financial Crisis (pp. 39–55). Taylor and Francis. https://doi.org/10.4324/9781003500223-3
Gurnari, C., & McLornan, D. P. (2022). Update on VEXAS and role of allogeneic bone marrow transplant: Considerations on behalf of the Chronic Malignancies Working Party of the EBMT. Bone Marrow Transplantation, 57(11), 1642–1648. https://doi.org/10.1038/s41409-022-01774-8
Haack, P., Schilke, O., & Zucker, L. (2021). Legitimacy Revisited: Disentangling Propriety, Validity, and Consensus. Journal of Management Studies, 58(3), 749–781.
https://doi.org/10.1111/joms.12615
Hariram, N. P., Mekha, K. B., Suganthan, V., & Sudhakar, K. (2023). Sustainalism: An Integrated Socio-Economic-Environmental Model to Address Sustainable Development and Sustainability. Sustainability, 15(13), Article 13. https://doi.org/10.3390/su151310682
Hasan, M., Le, T., & Hoque, A. (2021). How does financial literacy impact on inclusive finance? Financial Innovation, 7(1), 40.
https://doi.org/10.1186/s40854-021-00259-9
Heath, R. L., & Waymer, D. (2021). University Engagement for Enlightening CSR: Serving Hegemony or Seeking Constructive Change. Public Relations Review, 47(1), 101958. https://doi.org/10.1016/j.pubrev.2020.101958
Husni, & Khairat, M. (2024). Penetration of Muamalah Jurisprudence into Indonesian Law. Al-Istinbath: Jurnal Hukum Islam, 9(2), 699–722. https://doi.org/10.29240/jhi.v9i2.11116
Igboanusi, I. S., Nnadiekwe, C. A., Ogbede, J. U., Kim, D.-S., & Lensky, A. (2024). BOMS: Blockchain-enabled organ matching system. Scientific Reports, 14(1), 16069.
https://doi.org/10.1038/s41598-024-66375-5
Junaidi, H. (2025). Model of Collaboration Between Sharia Microfinance Institutions and Banking Institutions: A Solution to the Scale Gap in Financing for Microenterprises in Indonesia. Samarah, 9(2), 1034–1067.
Langford, M. (2021). The impact of public interest litigation: The case of socio-economic rights. Australian Journal of Human Rights, 27(3), 505–531. https://doi.org/10.1080/1323238X.2022.2030039
Malik, F. A. (2025). Empowering communities: Navigating the Scope and Impediments of Islamic Microfinance in India. In H. Mohi-ud-Din Qadri, M. I. Bhatti, & M. A. Omar (Eds.), The Routledge Handbook of Islamic Economics and Finance (pp. 342–360). Taylor and Francis. https://doi.org/10.4324/9781003168508-27
Mendes, J. P., Marques, M., & Guedes Soares, C. (2024). Risk avoidance in strategic technology adoption. Journal of Modelling in Management, 19(5), 1485–1509. https://doi.org/10.1108/JM2-10-2023-0221
Migdad, A. M. (2023). Examining Islamic microfinance as a mechanism of Takaful in high-risk countries: Case study of Palestine. International Journal of Ethics and Systems, 39(1), 126–142.
https://doi.org/10.1108/IJOES-11-2021-0214
Morse, S. (2024). Giving and Receiving: Faith and the Sustainability of Institutions Providing Microfinance Services for Development. Sustainability, 16(5), 1923. https://doi.org/10.3390/su16051923
Mpofu, F. Y. (2022). Industry 4.0 in Financial Services: Mobile Money Taxes, Revenue Mobilisation, Financial Inclusion, and the Realisation of Sustainable Development Goals (SDGs) in Africa. Sustainability, 14(14), 8667. https://doi.org/10.3390/su14148667
Nursanty, E., & Wulandari, A. (2023). UNVEILING THE AUTHENTICITY OF ISLAMIC VALUES: THE EVOLUTION AND TRANSFORMATION OF TRADITIONAL VILLAGES. Journal of Islamic Architecture, 7(4), 595. https://doi.org/10.18860/jia.v7i4.21258
Onyekwelu, P. N., Ibe, G. I., Monyei, F. E., Attamah, J. I., & Ukpere, W. I. (2023). The Impact of Entrepreneurship Institutions on Access to Micro-Financing for Sustainable Enterprise in an Emerging Economy. Sustainability, 15(9), 7425. https://doi.org/10.3390/su15097425
Parker, R., Thomsen, B. S., & Berry, A. (2022). Learning Through Play at School – A Framework for Policy and Practice. Frontiers in Education, 7.
https://doi.org/10.3389/feduc.2022.751801
Pedersen, C. L., & Wieser, C. (2021). Veteran Transition from Military to Civilian Life: Towards a Sociocultural Framework for Social Support | Scandinavian Journal of Military Studies.
https://doi.org/10.31374/sjms.97
Rahajeng, D. K. (2022). The ethical paradox in Islamic cooperatives: A lesson learned from scandalous fraud cases in Indonesia’s Baitul Maal Wat Tamwil. Cogent Business & Management, 9(1), 2090208. https://doi.org/10.1080/23311975.2022.2090208
Rohman, P. S., Laila, N., Fianto, B. A., Ascarya, A., & Rusydiana, A. S. (2024). Optimizing Capital Management in Baitul Maal wat Tamwil: Issues and Approaches. Economica: Jurnal Ekonomi Islam, 15(1), 93–108. https://doi.org/10.21580/economica.2024.15.1.20131
Schoon, E. W. (2022). Operationalizing Legitimacy. American Sociological Review, 87(3), 478–503. https://doi.org/10.1177/00031224221081379
Shahid, M., Sulub, Y. A., Mohtesham, M. M. J., & Abdullah, M. (2023). Analyzing the commonalities between Islamic social finance and sustainable development goals. International Journal of Ethics and Systems, 40(2), 381–394. https://doi.org/10.1108/IJOES-04-2022-0082
Solehudin, E., Huda, M., Ahyani, H., Ahmad, M. Y., Khafidz, H. A., Rahman, E. T., & Hidayat, Moh. S. (2024). Transformation of Shariah Economic Justice: Ethical and Utility Perspectives in the framework of Maqashid Shariah. Al-Risalah: Forum Kajian Hukum Dan Sosial Kemasyarakatan, 24(1), 101–115. https://doi.org/10.30631/alrisalah.v24i1.1467
Supriyadi, Djatna, T., Arkeman, Y., & Muslich. (2024). Blockchain in Islamic Financial: A Bibliometric Analysis. INCITEST - Proc. Int. Conf. Informatics, Eng., Sci. Technol. INCITEST 2024 - Proceedings of the 7th International Conference on Informatics, Engineering, Sciences and Technology. https://doi.org/10.1109/INCITEST64888.2024.11121425
Tay, L.-Y., Tai, H.-T., & Tan, G.-S. (2022). Digital financial inclusion: A gateway to sustainable development. Heliyon, 8(6). https://doi.org/10.1016/j.heliyon.2022.e09766
Tok, E., Yesuf, A. J., & Mohamed, A. (2022). Sustainable Development Goals and Islamic Social Finance: From Policy Divide to Policy Coherence and Convergence. Sustainability, 14(11), 6875. https://doi.org/10.3390/su14116875
Weingart, P., Joubert, M., & Connoway, K. (2021). Public engagement with science—Origins, motives and impact in academic literature and science policy. PLOS ONE, 16(7), e0254201. https://doi.org/10.1371/journal.pone.0254201
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2025 Novi Kusumawati, Barhanudin Harahap
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.