Strengthening Risk Governance Model of Islamic Microfinance Institutions Based on Maqashid al-Syariah: A Multi-Case Study of BMT Failures in Indonesia

M. Sholeh Wafie; Slamet Slamet

doi:10.61132/iceat.v3i1.266

Authors

M. Sholeh Wafie Universitas Islam Negeri Maulana Malik Ibrahim Malang
Slamet Slamet Universitas Islam Negeri Maulana Malik Ibrahim Malang

DOI:

https://doi.org/10.61132/iceat.v3i1.266

Keywords:

BMT, Islamic Microfinance Failure, Maqashid Al-Syariah, Multi-Case Study, Risk Governance

Abstract

This study analyzes risk governance failures in Islamic Microfinance Institutions (LKMS) using the maqashid al-shariah framework, grounded in Auda’s (2008) systems approach. A multi-case study was conducted at BMT Global Insani Cirebon, which recorded losses of IDR 77 billion, and BMT Mitra Umat Pekalongan, with losses of IDR 50 billion. Together, these cases represented 76% of total BMT losses in Indonesia during 2015–2024. Data were collected through in-depth interviews with eight key informants, document analysis, and direct observation. The findings identified three mutually reinforcing components of risk governance failure: weak institutional governance, unstructured risk identification, and unplanned risk mitigation. These weaknesses indicate inadequate integration of Islamic principles into institutional risk management practices. Based on the findings, a strengthening model was developed comprising three interconnected pillars: Institutional Legitimacy, Supervisory Epistemology, and Substantive Regulation. Each pillar is grounded in the dimensions of maqashid al-shariah and emphasizes institutional accountability, effective supervision, and regulatory compliance. The model provides a framework for strengthening risk governance and promoting sustainable, accountable, and Sharia-compliant LKMS.

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