DECOMPOSITION OF BOCR “ARISAN MAJELIS TA’LIM”AS …

Economics and Accounting JournalVol.1, No.1, January 2018

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DECOMPOSITION OF BOCR “ARISAN MAJELIS TA’LIM”ASSUPPORT PROGRAM FOR MICRO SYARIAH FINANCIAL

INSTITUTION, CASE STUDY OF BOGOR CITY

Fiqih AfriadiUniversity of [email protected]

Abstract

The purpose of this research is to uncover the uniqueness of Beneffit, Opportunity, Costand Risk (BOCR) from arisan majelis ta’lim in supporting the sustainability of ShariaMicro Financial Institution (SMFI). Benefit and Opportunity need to be known as thepositive side of the arisan majelis ta’lim in SMFI, while the Cost and Risk needs to beknown to see the negative side. To reveal the uniqueness of BOCR methodology is done byusing the methodology of ANP BOCR problem decomposition. Decomposition of theproblem is done by surveying to arisan majelis ta’lim in Bogor city and also indepthinterview to practitioners of arisan majelis ta’lim and SMFI practitioners. The result of theresearch shows several Benefits that can be obtained include; increase the number ofmembers, high social capital honesty and integrity typical of “wong cilik”, and low cost.For Opportunity that can be obtained that is; savings fund opportunities, poorempowerment opportunities, microfinance opportunities, and opportunities for increasedfinancing returns. The various costs that must be in the responsibility is; operational costs,empowerment costs, product development costs, and socialization and education costs.While some risks that need to be the attention that is; credit risk, sharia compliance risk,operational risk, and social risk.

Keywords: Arisan Majelis Ta’lim, Micro Finance

1. INTRODUCTION

The current economic condition inIndonesia is still dominated by Micro,Small and Medium Enterprises(MSMEs). In 2012, the Ministry ofCooperatives and SMEs noted that99.99% of business units in Indonesia arestill in UMKM scale (98.79% is micro

business unit). Furthermore, the UMKMsector has managed to absorb 97.16% ofthe workforce, while large industries onlyabsorb 2.84% of the workforce. Inaddition, the MSME sector in 2011contributed 57.60% of Gross DomesticProduct (GDP). The development ofMSME data can be seen in the followingtable:

Table 1.1 Data of MSME Development, Year 2011-2013

No Indicator 2011 2012 20131 Business Unit 99,99% 99,99% 99,99%2 Labor force 97,24% 97,16% 96,99%3 GDP (constan 2010) 57,60% 57,48% 57,56%

Source: Ministry of Koperasi dan UKM


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On the other hand, the portion ofcredit financing disbursed by banks to thesector of UMKM is still consideredinadequate. Therefore, the presence ofFinancial Institutions (FI) that canprovide funds or capital for MSME isvery important. The Financial Institutionis a Micro Finance Institution (MFI /SMFI). Considering the important role ofMFIs, especially SMFI, SMFIsustainability are very needs to get moreattention.

SMFI 's sustainability is influenced byvarious creativity / innovations fromSMFI in meeting the needs ofcommunity. SMFI sustainability is alsoinfluenced by SMFI social closeness withcommunities and individuals in thecommunity. In addition, SMFI must keeprunning efficiently and productively so itcan meet all the costs required. Theseobviousness become things to be noticedby the stakeholders of SMFI.

One of the shortcuts to fulfill thesethree things is to make a product with anapproach to the community, one of whichis with the approach to the communityarisan majelis ta’lim. The community ofarisan majelis ta’lim has at least some ofthe basic elements needed to sustain

SMFI sustainability. First, arisan majelista’lim has potential members to becomecustomers. Secondly, arisan majelista’lim and SMFI have the same spirit inIslam. Thirdly, arisan majelis ta’lim haspotential fund.

However, some of the key elementsneed to be seen further and deeper.Because in addition to potential andprofit, there will also be costs and risks.It is therefore important to know whattheir potentials and benefits are and whattheir costs and risks are. Are the benefitsand potentials greater? Or even the costsand risks are greater ?. Also note thepriority levels of benefits, opportunities,costs and risks, so the stake holders candecide which will be prioritized. Thisstudy aims to answer the threeformulation of the problem.

This research has some boundaryproblems. They are objects, location andthe model. object of this research iswoman arisan majelis ta’lim . Thesecond, research objects are located inthe city of Bogor. Thirdly, the model ofSMFI use the comparison of threemodels (grameen model, cooperativemodel and micro banking model).

2. LITERATURE REVIEW

According to UU No. 1 of 2013 onMicro Finance Institutions (MFIs), MicroFinance Institutions are:

“Specialized financial institutions thatestablished to provide communityempowerment, either through loans orfinancing in micro-scale enterprises tomembers and communities, savingsmanagement, or the provision of businessdevelopment consulting services that arenot only profit oriented.”

Whereas Islamic microfinanceinstitutions are micro-finance institutionsthat work according to the concept ofsharia with the principle of profit lost

sharing as the main method. (Rusydianaand firmansyah, 2018)

One of The first LKMS in Indonesiawas Baitul Tamwil Salman, Bandung. InJakarta also established a similarinstitution in the form of cooperatives,namely Cooperative Ridho Gusti.(Antonio, 2001; 25). In 1995 theAssociation of Indonesian MuslimIntellectuals (ICMI), Majelis UlamaIndonesia (MUI) and PT Bank MuamalatIndonesia (BMI) initiated the founding ofthe Small Business Incubation Center(Yayasan Pinbuk), an institution thatbuilds Baitul maalwat tamwil (BMT),LKMS, Sharia cooperatives and microsmall enterprises (Tanjung, 2007).

However, in the development ofLKMS also faced several problems that


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caused unhealthy of several LKMS.Some of the points that are suspected asthe cause of unhealthy LKMS includebad management, poor managerial,unprofessional human resources,obtaining capital difficulties anduncertainty of regulatory supervisionmodel. These obstacles ultimately lead tothe inability of LKMS to attract publictrust.

collaboration with the arisan majelista’lim are very necessary for the meansof approach and socialization to thecommunity, with the result thatultimately the trust of the community willbe obtained. However, similar research isstill very difficult to find, it may even besaid that this research is one of the firstresearch that discusses the benefit,oportunity cost and risk (BOCR) analysisof arisan majelis ta’lim as supportingLKMS financing products.

3. RESEARCH METHOD

This study is a qualitative analysisresearch that seeks to capture a value orvision represented by practitioners ofSMFI and arisan majelis ta’lim about

benefit, opportunity, cost and risk as asupporting of SMFI products. Therefore,the appropriate methodology for thisresearch is with ANP BOCR.

Surveys, interviews and literaturestudies are sources of data for preparingANP model framework. The ANPframework can be completed after dataand information of preferences /responses / opinions are represented bythe experts / practitioners of Islamiceconomics about the issues.

To obtain the preference data,researcher used questionnaire / directinterview to the experts and practitioners.It’s used to obtain the necessary data forqualitative analysis. So, the type of dataused in this study is the primary data.

Compared with the AHPmethodology, ANP has manyadvantages, such as more objective, moreaccurate predictions, and more stable androbust results. ANP is more general thanAHP used in multi-criteria decisionanalysis. The AHP structure is a decisionproblem in the form of a hierarchicallevel, while ANP uses a networkapproach without having to set the levelas in the hierarchy used in AHP. (Saaty,2005: 8)

In order to complete this research,there are several steps that must be taken(Ascarya, 2009):

1. Conducting a study literature andin-depth interviews on issuesreviewed to experts andpractitioners who understand andmaster the problemcomprehensively;

2. Decomposition to identify, analyzeand structure the complexity of theproblem into the ANP network

3. Prepare / make a pair-wisecomparison based on the ANPnetwork that has been created;

4. Conducting second interview in theform of filling questionnaires toexperts and practitioners;

5. Synthesize and process data (surveyresults in the form of

questionnaires) using ANPsoftware superdecisions; andanalyze results and proposestrategy recommendations.

The survey was conducted to 44arisan majelis ta’lim scattered in the cityof Bogor. Sampling method conducted inthis survey is sampling area (areasampling). This method is done bydividing in regional segments containingthe number of research units from all theresearch areas contained in the map(singarimbun and effendi, 1991, p 168).Researchers divide the region accordingto the existing kelurahan in each sub-district in the city of Bogor.

Criteria that become the guidelines ofthe respondents who can be surveyed are:1. It is a majelis ta’lim


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2. There are regular meetings3. There is an arisan4. Members of the arisan are women5. Located in the Bogor City

Criteria points a through c are typicalconditions of the arisan majelis ta’lim.While criterion points d and e are thelimits made to focus the research, so thediscussion becomes not too wide. Themain consideration for choosing a citybogor is due to limited time, personneland cost. In addition, Muslims are themajority of religions in the city of Bogorand Islamic da'wah in the city of Bogor isalso relatively more advanced.

4. RESULT AND DISCUSSION

The results of the study show thevarious benefits, opportunities, costs andrisks (BOCR) of the arisan majelista’lim. Here are the results of the studypresented in accordance with the BOCR.

4.1Benefits4.1.1. Low Cost benefit

The first factor that makes the lowcost is fixed gathering place. 60% of thesurveyed arisan have a fixed gatheringplace. With the gathering of many peoplein the same place would be an advantagefor SMFI field officers. SMFI officers donot have to spending a lot of time andenergy to meet all members. Obviouslythis is very cost saving because the moretime that can be utilized and in the endminimize the required field officers.

The second factor that makes thelow cost is the meeting period of thearisan majelis ta’lim. 46% of arisanmajelis ta’lim are held weekly, 36%monthly and 9% are held twice in amonth. On the other word as lessfrequent meetings, as fewer field officersare needed and this also result as less the

required field officer as cheaper the costsincurred by SMFI.

4.1.2. Benefit of High social capitalThe second benefit of the arisan

majelis ta’lim is the high social capital.Social capital can be an important benefitfor LKMS, this is because most middle-low society have no collateral as theirmaterial capital. So social capital can bean effective and reliable alternativecollateral.

The high social capital in thearisan majelis ta’lim can be seen from50% of the age of arisan are more than 6years old and even 39% are more than 10years old. The longevity of the arisanmajelis ta’lim reflects how familiar eachother has been with each other. Membersof the arisan who are come trough after along period of time are already tested formutual trust in their community. Thehigh social capital can also be seen fromthe most dominant reason of themembers following the gathering ofarisan majelis ta’lim that is forsocialization and gathering.

4.1.3. Benefit of Honesty and Integrityof “Wong Cilik”Guaranteed integrity of members

can be seen from a number of 49% ofrespondents who have joined arisan morethan five years. This are certainly provesthe integrity of the members of the arisanmajelis ta’lim, because the members ofthe arisan majelis ta’lim who remainafter a long period of time are tested formutual trust in their community. Thensupported by survey results which alsoshows 86% arisan majelis ta’lim has beendone more than two periods (36% hasbeen done two periods, 21% has beendone three periods and 29% has beendone more than three periods) which canbe seen in the graph below.


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Figure 1: The Number of arisan periods

Honesty and integrity can also beseen from only 16% of members whoexpress an objection in paying socialcontributions, but on the other hand 49%only follow a arisan majelis ta’lim, thismeans 33% of members have been ableto manage their personal financialcondition .

Increase Number of Membersbenefit

Of course, by holding a arisanmajelis ta’lim will add SMFI customers.This is because arisan majelis ta’lim hasa lot of members, some arisan groupshave more than 200 members. Theaddition of SMFI customers can beestimated by looking at the graph of thefollowing members of the arisan majelista’li

Figure 2: Number of arisan members

4.2 Opportunities4.2.1 Empowerment of the Poor

oppurtunity

Empowerment opportunity can beseen from the 32% of the total arisangroups with the amount of collected fund

not reach a million rupiah, as canbe seen in the following graph.


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Figure 3: Amount of collected fund Every Shuffle Arisan

This is also supported by datashowing that there are 16% of arisanmajelis ta’lim groups whose depositamount per member is less than Rp10,000. Other data that support that thereare 56% of respondents who have neverassociated with financial institution. Allthese data indicate that SMFI has bigoppurtunity to hire the members of arisanbecome their customers.

4.2.2 Savings Fund OpportunityPotential savings funds can be seen

from 51% of respondents registered in

some groups. Of the 51% of the total whofollow another groups, 79% follow morethan one group, 56% follow more thantwo groups, and 51% follow more thanthree groups. So the majority who followmore than one arisan are potentialcustomers for SMFI. This is alsosupported by the motivation data ofrespondents. the data shows that 43 %Reasons/ motivations following arisanare to save their money as can seen ingraph below.

Figure 4: Reasons / Motivations Following Arisan

Potential savings can also be seenfrom a number of 55% members of thearisan majelis ta’lim have no loan intheir daily activities. Data from surveysshow the members income is in the rangeof one to five million rupiah. If a fieldofficer can serve 80 arisan groups in amonth (four arisan groups per day) andeach arisan groups have two millionrupiah collected fund, it’s mean the total

turnover fund reach Rp 160,000,000 permonth.

4.2.3 Micro Financing OpportunitiesSaving oppurtunity indicate

financing oppurtunity also. Thisfinancing opportunity can be seen fromsome of the data in point two abovewhich shows the funding ability of themembers of the arisan majelis ta’lim.


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This is because if they are able to setaside money for paying arisan and tosaving, they are basically able to repaythe financing with the same amount asthe amount of their arisan majelis ta’limdeposit.

In addition, their ability andpotential can also be seen from theirwillingness to pay an arisan fee that isnot small in number (only 6% that paidunder 10 rb). It can also be seen from64% of the arisan community there is afee and 67% of the respondents do notmind paying the arisan fee. In addition,there are also 19% of respondents whoare willing or still able to accept newarisan products.

4.2.4 Opportunity to Increaseperforming loan / NPL Rate

Low NPL level is an opportunitythat can be obtained from the high socialcapital and the integrity of members ofthe arisan majelis ta’lim. Guaranteedintegrity of members can be seen from anumber that shows 49% of respondentswho have joined arisan more than fiveyears. Then supported by survey resultswhich also shows 50% arisan has beendone more than two times round. Thiscertainly proves the integrity of themembers of the arisan majelis ta’lim,because the members of the arisanmajelis ta’lim who remain after a longperiod of time are tested for mutual trustin their community.

Afterward, 95% of the arisanmajelis ta’lim are directly give the moneyto members who get their right. In otherwords the amount of money is not in oneuse and directly given to the rightmembers.

4.3 Cost4.3.1 Costs Of Operational

Operational cost is a basicrequirement that must be hold if thearisan majelis ta’lim will be develope asa supporting product of SMFI. Theseoperational costs include in the form of

field officers, supervisors, administrativecosts as well as daily transportation costsfrom the field officers who walk around(Horngren et all, 2012). Operational costsalso increase considering 40% ofcommunities carry out social gathering inmobile places. In addition, operationalcosts also increase if there is a transfer ofarisan right, as it requires re-registrationand adjustment of some administrativedata.

4.3.2 Socialization and Education CostThe cost of socialization and

education is needed, because the majorityof communities and arisan majelis ta’limrespondents still lack general knowledgeof finance in general and sharia financein particular. This can be seen in 56%never borrowed to financial institutions,only 44% have ever been in contact withfinancial institutions and only 8% are stillactively in touch with financialinstitutions. There are assumptions frommembers of arisan that dealing financialinstitutions are complicated and full ofadministrative matters.

Another thing that indicates theneed for cost of socialization andeducation is almost half (49%) ofcustomers do not follow other arisan.Afterwards, also supported by datashowing that 81% of respondents are notwilling to follow new arisan, as can beseen in the following graph.

Of course this is a challenge forLKMS because the majority ofrespondents are more closed to newthings. So socialization and educationbecomes necessary for the community ofthis arisan majelis ta’lim to be more opento new things.

4.3.3 Cost of Product DevelopmentProduct development costs are

required to fit the needs of the arisanmajelis ta’lim community members. Thedomination of need are reflected by thereason for borrowing to financialinstitusions is to pay school fees (41%),


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for venture capital (24%) and to build /renovate the house (29%). For more

details can be seen in the graph below.

Figure 5. Behavior of the Use of Borrowed Money by Members of the arisan majelista’lim

4.3.4 Cost of EmpowermentThe cost of empowerment is

required because there are still somemembers of the arisan majelis ta’limcome from the poor group. Their inabilitycan be seen from several things, the firstis that there are still 16% of respondentswho said that they are objected in payingarisan, and the second is that there are49% who only follow one arisan only.

SMFI as a syariah financialinstitution must also play a role inempowering the poor. The cost ofempowerment can be hold internally ifthe financial condition of SMFI is goodand healthy. However, there is nothingwrong if SMFI cooperate with zakatinstitutions or other social institutionsincluding government agencies to betogether in empowering the poor. At leastSMFI can serve as a liaison or provide abailout assistance before coming to theaid of other social institutions.

4.4 Risk4.4.1 Risk of Shariah Compliance

The risk of Sharia non-complianceis the possibility of loss due to the shariafinancial institution does not adhere tothe principles of sharia (Rulindo, 2012).There are several risks of non-

compliance with Shari'a. The first is therisk of non-compliance with shariacharges which charged to members whoreceive social gathering. The practice ofquoting arisan fees is quite large at64%.furthermore 65% of the quotedcharges are united. In other words, themember has no choice to accept that fees.Later on, the other data show that 33%members feel objected in paying the costof the arisan majelis ta’lim.

The risk of non-compliance with asecond shariah potentially resulting fromthe practice of selling / auctioning ofarisan majelis ta’lim. The survey resultsshow that 54% of the sale price / auctionof arisan majelis ta’lim under the amountof money that has been deposited. This ispotentially a practice of “riba” (buyingand selling debt with debt).

The third risk of non-complianceof Shari'ah is the development of multi-service products, one of which is themulti-service product of schoolfinancing. Selection of the contract andits application must be considered caseby case so that it can avoid the practice of“riba”.


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4.4.2 Credit Risksome of the things that show

potential risks of credit are:

1) Long shuffling period and largenumber of members. The longerthe arisan majelis ta’lim period isover, the higher the risk of returnand member compliance. Even inpractice there are arisan majelista’lim unfinished even up to fiveyears.

2) 61% of the community statedthat some of their members werequit. However, this is not toosignificant, because 50% of thecommunity has been running formore than 6 years 1 and themajority of those who left only 1-3 people during that period.

3) The 67% member who were quitfrom arisan majelis ta’lim arealready get the money. Thereason for quit are most of thepersonal affairs, moving shelterand not being able to pay.

4) The 70% treatment of the arisanmajelis ta’lim manager to theperson who were quit are just beignored, the risk management islacking, only a few manager whogive advise and expressly requestto return the money

5) The 70% treatment of the arisanmajelis ta’lim members to theperson who were quit are just beignored, the risk management islacking, only a few memberswho give advise.

6) 16% members said that they feelobjected to paying socialgathering,

7) Some respondents have otherinstallments quite a lot of rangeRp 100.000-500.000 (20%) andrange 1-5jt (18%).

4.4.3 Operational RiskOperational risk potentially occurs

in three stages. The first stage is at thelevel of SMFI internal officers whopotentially misuse funds. The second is atthe level of the board / manager of thearisan this potentially occurs if themember is too much, so not too visible ifcheating one or two times. The third is atthe level of the arisan majelis ta’limmembers, this is happen if there ismember who are quit and if there istransfer of arisan rights.

4.4.4 Social RiskSocial risk can occur because the

majority is closed to new things,especially institutions and financialproducts that are still not familiar tothem. So if socialization and educationare not well done, anything that does notmatch with their habits and expectationscan be a dangerous social risk. Ifsocialization and education not wiselydone, it will lead to bad issues, slanderand even rejection of raw and up to thelevel of hostility. The close attitudes ofrespondents to financial products can beseen in the amount of 56% members arenever borrowed to financial institutions,only 36% have ever been in contact withfinancial institution and only 8% are stillactively in touch with financialinstitutions. For more details can be seenin the graph below.

DECOMPOSITION OF BOCR “ARISAN MAJELIS TA’LIM”AS …

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