BMT DEVELOPMENT STRATEGIES IN THE ERA OF COVID-19 PANDEMIC WITH A SWOT ANALYSIS
APPROACH
Usep Deden Suherman, Dedi Suyandi
Universitas Islam Negeri (UIN) Sunan Gunung Djati Bandung, Indonesia
usepds@uinsgd.ac.id, dedisuyandi@uinsgd.ac.id
https://doi.org/10.46367/jps.v4i1.1037
Received: Feb 16, 2023 Revised: Mar 19, 2023 Accepted: Mar 29, 2023 Published: Apr 17, 2023
ABSTRACT
This research aims to analyze the strengths, weaknesses, opportunities, and threats to the positioning and development strategy of Baitul Maal Wa Tamwil (BMT) in West Java in the Era of the Covid-19 Pandemic. The descriptive qualitative research method was used. The study was conducted at 6 BMTs in the West Java region Technique of data analysis used is SWOT analysis.
The results of the calculation of the SWOT matrix produce several alternative strategies, namely utilizing government support for Islamic banking by increasing the types of Sharia products, approaching potential investors even though capital is limited considering the public interest in the Islamic economy is very high, making regional regulations on sharia economics, establishing cooperation and partnerships with other financial institutions to obtain capital, capacity building of human resources, training, and development activities through partnerships with other banks that apply sharia principles. The implications of the results of this research are as input material for the development of new policies, strategies, and efforts to develop BMT both in the pandemic era and after the Covid-19 pandemic and to develop theories for alternative strategies in developing BMT in the Covid-19 pandemic era.
Keywords: Strategy, BMT, Covid-19, Sharia.
INTRODUCTIONS
Covid-19 has brought changes in the development of BMT in Indonesia, as it is known that the number of BMTs is huge throughout Indonesia, namely 5500 institutions, as seen from unofficial data. It makes the Islamic microfinance institution a foundation for the community's economic development, especially for small and medium enterprises (SMEs). However, since the Covid-19 outbreak, the financing sector has decreased due to decreased public demand for financing (Sumarni 2020). It has an impact on the operating income of BMT. Apart from that, the Covid-19 pandemic has caused a decline in the offers of other savings and investment products. The liquidity level of BMT also decreased due to the withdrawal of deposits made by shahibul maal as a result, and the Islamic financial institution became short of cash flow and financial liquidity.
In 2006, approximately 49 million SMEs were operating in the country.
SMEs have emerged as a major player in domestic economic activity, accounting for more than 99.9% of all enterprises and employing 96.2% of the total workforce (Tambunan 2015, 36). Muslim micro-entrepreneurs, including the SME movement, are the country's most frequent users of microfinance programs (Cantika 2015). To meet the needs of Muslim customers, BMT, a Sharia financial cooperative, was formed to assist Muslim micro-entrepreneurs as a rural poverty alleviation strategy. BMT serves two purposes. Baitul Maal is responsible for the
social mission, which includes the collection and distribution of zakat funds to people experiencing poverty. In contrast, Baitul Tamwil is responsible for commercial or economic activities channeling funds for productive purposes.
As a microfinance institution, BMT needs to improve its performance to provide financial services to the community. According to the General Chairperson of the Indonesian BMT Association, in 2012, the number of BMTs was 3,900 BMTs. A total of 206 institutions have joined BMT associations in Indonesia. In 2011 total wealth amounted to 3.6 trillion IDR from 206 BMTs collected in associations. Furthermore, in 2013 the value of BMT development reached more than 5,500 BMTs that spread in Indonesia (Joelarso 2014, 67). On the other hand, BMT was born and raised in a long-known community that operates an economy based on a solid usury system (Kasdi 2013). As a result, the policy immediately appearing in its implementation is how the BMT operates and whether or not Sharia principles such as the Qur'an and Sunnah can be appropriately applied.
BMT plays an important role, particularly in rural community financing.
In this case, the quality of services provided by Islamic financial institutions, namely BMT, is a marketing strategy; with excellent service, customers will be interested in BMT products, so they have a very high customer loyalty potential (Haida and Kurnia. 2017). Meanwhile, one of the challenges for BMTs is a need for more information and socialization in rural communities about the use of digital facilities that BMTs need to utilize optimally. BMTs in West Java tend to decline and go bankrupt, which has declined for almost 17 years. The reason is that the first BMT experienced losses and went bankrupt. Arifin (2015) said that one of the reasons is the need for more preparation of human resources or employees in terms of knowledge and skills in managing BMT, especially problems regarding credit. Second, there is an ambivalence between the Sharia concept in managing BMT and its implementation in the field. Third, management that has not been adequately regulated employees who cannot be trusted and professional, there is no trust from customers, and it is not easy to get capital. Another phenomenon that causes many BMTs to go bankrupt, according to Arifin (2015), is the problem of lending, where the financing used by the community in BMT is mostly in one product, while the product provided by BMT to consumers is not only one product.
Research on BMT development strategy has been researched by Widiastuti, Rusydiana, and Firmansyah (2017); Hasib, Fahri, and Ramadhan (2018); Permana and Adhiem (2019); Tho'in (2021) with different results.
However, that research was not conducted during the Covid-19 pandemic and did not use the SWOT approach and different locations, so the position of this research is different from that research. Therefore it is essential to conduct further research to analyze the strengths, weaknesses, opportunities, and threats to the West Java BMT development strategy in the Covid-19 Pandemic Era.
LITERATURE REVIEW
Islamic Microfinance Institution (IMFI) is a financial institution whose primary activity is to save public funds through savings and deposits and distribute them to the public through financing based on Sharia principles via
appropriate banking procedures (Ilmi 2014, 13). Microfinance institutions (MFI) are organizations that provide financial services to people with low incomes. The initial focus of micro-loans was typically short-term work to finance small businesses run by low-income communities. The first IMFI aims to help microeconomic actors inject religious and human values to avoid practices prohibited by Islamic law, such as usury, gambling, and uncertainty. The second goal is to become an economic institution that seeks to mediate inequality in economic access from formal financial institutions. Microfinance institutions provide broad access to micro-business groups due to non-formal IMFI that uphold socio-economic conditions. Third, IMFI are wide open for business opportunities for micro business groups, most of whom are poor. Through this institution, marginalized groups are guided and aimed at having a mental dependence on others, changing their lifestyle from a consumptive lifestyle to a savings group, and having a solid lifestyle of friendship in groups, which is characterized by their willingness to participate in set aside social funds or humanitarian funds (Ali, Abu-Hadi, and Ali 2013).
In general, microfinance institutions aim to improve and develop the economic business of the ummah and the community. Meanwhile, microfinance institutions have the following objectives: Providing joint solutions for capital needs faced by micro/small entrepreneurs; Helping provide solutions for capital needs for select business units carried out by employees and the community;
Helping to provide solutions for urgent financial needs that may be faced by the community, so that they can avoid loan sharks who charge high-interest rates (Darsono et al. 2017, 38). There are several main principles of Islamic Microfinance Institutions, namely: faith and taqwa to Allah by applying the principles of shariah and muamalah to life; integration, namely spiritual and moral values that encourage dynamic, proactive, progressive, fair, and noble business ethics; family, is to prioritize the public interest over personal interests;
togetherness, namely a unified frame of mind, attitudes and ideals between all parts of the IMFI, namely, managers need to have a vision and together with employees improve the economic and social situation; independence, are independent means not dependent on loan funds and “assistance” but continuously proactively collects public funds; professionalism, namely high enthusiasm based on faith; istiqomah, consistent, consistent, continuous continuity and never give up. After obtaining a stage, return to the next stage and only hope in Allah (Ridwan 2016, 29).
Baitul Maal comes from Arabic, including the stanza, which means house, and almaal, which means treasure. Baitul Maal means a house to store treasures.
Baitul Maal in the khalifa era was an institution or party (al jihad) which handled all the people's wealth in the form of state income or expenditure. In the past, Baitul Maal was only managed by the government, but now the management of Savings and Loans Cooperatives and Sharia Financing or BMT can involve the private sector. The significant difference in the current era of BMT is that it does not only have a social function in distributing zakat, infaq, and sadaqah funds. At the same time, BMT also has a business function. BMT grows into an Islamic microfinance institution that operates based on Sharia principles, seeks to grow and develop micro-enterprises aimed at elevating the degree and dignity, defending the interests of the poor and marginalized, growing on the initiative and
initial capital of local community leaders based on the economic system, including security, peace, justice and prosperity (Ridwan 2016, 35).
BMT is an abbreviation for the words Baitul Maal and Baitul Tamwil institution. First, Baitul Maal is a socio-religious financial institution whose primary business focus is to accommodate and distribute community assets such as zakat, infaq, and sadaqah (ZIS) following the provisions of the Qur'an and the Prophet's Sunnah. Second, BMT is a financial institution whose primary activity is to save public funds in the form of deposits and reinvest them in the form of Sharia-based financing through existing banking regulations. Fatwas are given to administrators and administrators about something related to Sharia, such as product appointments, concerning the primary function of Sharia supervision, namely as an advisor. Therefore, products issued by BMT must apply for approval from the Sharia Supervisory Board (SSB) (Ridwan 2016, 89).
BMT is an Islamic microfinance institution that opens access to community groups not served by formal financial institutions (Beik and Arsyianti 2016, 132). It used to be estimated that more than 20 million people in this country were involved in transacting with BMTs throughout Indonesia. BMT is defined as a microfinance institution operating on the principle of syirkah and then developing into micro and small businesses to elevate the degree and dignity and defend the interests of low-income people. BMT was born as a bright spot for micro and medium enterprises. The problem that becomes an obstacle for small and medium entrepreneurs is limited capital ownership. BMT tries to provide solutions for micro, middle, and lower entrepreneurs experiencing capital difficulties. With an alternative banking system for Muslims without violating the prohibition of Islamic law, BMT, in its operations, offers financing products with the concept of profit sharing in cooperation contracts using mudharabah and musyarakah contracts as long as the concept of buying and selling uses murabahah contracts (Hasib, Fahri, and Ramadhan 2018).
BMT's characteristics are openness, independence, and a focus on developing savings and financing to support productive economic businesses for customers and the social welfare of the surrounding community, particularly micro-enterprises and people experiencing poverty. The benefits of BMT include the following: developing the quality of customer human resources, managers become more professional, safe, and reliable; organizing and raising funds so that community funds can be used most effectively; increasing job opportunities;
improving and expanding the quality of the business and customer product market; increasing the effectiveness of various economic and social institutions (Ridwan 2016).
The functions of BMT include the following: (1) business function the tijarah function of BMT includes three things, namely BMT as an intermediary institution or bridging the relationship between surplus and deficit parties, BMT as management investment, and finally BMT as an investor who currently has developed a form of financing capital. As an investment manager, BMT carries out its tijarah function by providing financing services to micro-entrepreneurs who lack capital and have been recommended and fostered by the Indonesian BMT Association to ensure security on behalf of investors and other third parties.
As an investment manager, BMT is a place for the lower middle class to invest.
Finally, as an investor, BMT plays an active role in funding micro, small, and
medium enterprises, (2) social function (Tabarru), activities in the social sector focus on the management of zakat, infaq, sadaqah, and waqf that BMT has collected. This function is the advantage of BMT; therefore, it also plays a role in spiritual development for customers of BMT financial sector services. Therefore, the empowerment carried out by BMTs is not limited to the economic side but also from a religious perspective. It also hopes that BMT customers will strengthen the social sector by distributing ZIS to BMTs. The social function of BMT is also realized through applying qardh al-hasan financing for people experiencing poverty, investing in the halal industry, and providing economic development benefits following Islamic principles, namely social justice and distributive justice. BMT also provides quality services to customers based on the principle of brotherhood, provides microfinance and savings to help people experiencing poverty, and improves employee welfare based on the principle of brotherhood and zakat for those in need (Ridwan 2016,78)
METHODS
The descriptive qualitative and quantitative approaches were used in the research. Descriptive research uses refined concepts to explain various social phenomena (Moleong 2018). In research, the population does not always refer to people. The population in this study is BMT managers in the West Java region.
Sugiyono (2017, 62) argues that the sample is interpreted as a portion of the number of characteristics present in the population. Therefore, the sample in this research is the BMT Benefit Fund located in West Bandung Regency, El Mizan BMT located in Cianjur Regency, BMT Ibadurahman located in Sukabumi, KBMT Al-Muhsinin located in Bandung Regency and BMT Dana Ukhuwah located in Bandung Regency and BMT Ta'awun is located in Sumedang. The strategy used in this selection is to select BMTs still survive and still have good enough assets during the Covid-19 pandemic. The sampling technique in this research is a purposive sampling technique where the sample selection is carried out with specific considerations. The reason for using this technique is that the author considers which BMTs will survive during the Covid-19 pandemic so that a BMT development strategy can be obtained during the Covid-19 pandemic.
SWOT analysis using internal and external factors and quantitative strategic planning analysis (Quantitative Strategic Planning Matrix) is a method used based on the objectives that describe strategists to objectively assess strategies that emphasize critical factors from within and outside.
RESULTS AND DISCUSSION
EFE Matrix Analysis
Information about factors related to opportunities and threats faced by Sharia hotel managers is obtained while identifying the external environment.
Filling out the questionnaire was carried out by the Syariah Hotel management section. The essential step in creating the EFE matrix is calculating the weights and ratings based on the interview results with the respondents. Following that, it is averaged. Furthermore, based on the multiplication of the average weight and
rating, the score results can be known in Table 1: the average weight, average rating, and score on the EFE matrix.
Table 1 EFE Matrix (External Factor Evaluation)
External Factors Average
Score
Nu. Opportunity Weight Rating
1 The high interest of the people of West
Java towards the sharia economy 0.117 3.33 0.391 2
The information technology used by BMT is growing to support online service programs
0.099 3.17 0.314
3 Government support for BMT as LKS that
helps the community's economy 0.095 2.83 0.268 4 The majority of the population in West
Java is Muslim 0.095 3.00 0.284
5 BMT adopts a profit-sharing system so that
it is resistant to global crises 0.090 2.67 0.240 6
The potential for growth in BMT's market share is getting bigger, especially in West Java
0.094 3.17 0.297
Threat
1 Moral Hazard 0.082 3.5 0.287
2 The gap between the ability to save and the
use of financing funds 0.072 3.5 0.251
3 Competition among financial institutions is
getting bigger 0.077 3.5 0.269
4 The conditions and situation of the
ongoing Covid-19 pandemic 0.081 3.83 0.309
Total 2.91
Source: primary data (processed, 2022)
In the calculation of the EFE Matrix, the most significant opportunity is the high interest of the people of West Java towards Islamic economics, with the resulting weight score of 0.391. The amount of public interest in Islamic microfinance institutions, namely BMTs, is a huge opportunity to develop BMTs into financial institutions needed to develop the economy of the lower middle class. Then the second opportunity that results from the calculation of the EFE Matrix is that the information technology used by BMT is growing to support online service programs with a resulting score of 0.314. Undoubtedly, the role of information technology today is crucial to support BMT activities or activities.
Therefore, implementing information technology from BMT is a very profitable opportunity to provide optimal customer service. Meanwhile, the third opportunity is the potential growth of BMT's market share, which is getting bigger, especially in West Java, with a resulting weight of 0.297. BMT's market share is now growing and developing. It is because BMT is a financial institution that implements a profit-sharing system that is an attraction for its customers.
Therefore, seeing the market share of BMT getting more significant is an excellent opportunity to develop BMT during the Covid-19 pandemic.
The fourth opportunity generated by the EFE Matrix calculation is that the majority of the population in West Java is Muslim, with a score of 0.284. With West Java's potential, namely that the majority of the community is Muslim, it becomes an excellent opportunity to establish BMT as a financial institution that can assist the community's economy. The fifth opportunity generated by the EFE Matrix is the government's support for BMT as an Islamic Microfinance Institution that benefits the local economy, with a weight of 0.268. This government support is essential for the development of BMT, especially in West Java. With support from the government, the BMT institution can develop itself.
Therefore, the regulations and stipulations decided by the government through laws force BMT to develop its activities further to help the community's economy, especially in West Java. Furthermore, the last opportunity generated from the calculation of the EFE Matrix, which is based on the number of weights, is that BMT adheres to a profit-sharing system so that it is resistant to the global crisis with the resulting weight of 0.240. Through the profit-sharing scheme established by BMT, BMT provides opportunities for the community to enjoy the results of their businesses belonging to the lower middle class so that it does not harm the people who enter into partnerships with BMT as is the case with other financial institutions that charge very high-interest rates, to customers who tend to be detrimental to their customers.
The first threat generated in the EFE Matrix is the condition and situation of the Covid-19 pandemic, which continues to be prolonged with a resulting weight of 0.309. The threat of Covid-19 cannot be predicted when it will end, thus reducing the continuity of BMT in providing services to customers. Given the possibility that many customers cannot run their businesses properly, the ability to pay installments is reduced. This is why the condition and situation of Covid-19 are a real threat to the sustainability of BMT. The second threat generated in the EFE Matrix is the Moral Hazard Risk, with a resulting weight of 0.287. This risk can be a threat when there are BMT employees who are dissatisfied with the policies taken by Islamic financial institutions and also other factors that can cause employees to act arbitrarily to the detriment of the institution. The third threat generated in the EFE Matrix is competition between financial institutions, which is getting more significant with the resulting weight of 0.269. Competition between financial institutions, conventional and Islamic banking or other Islamic microfinance institutions, is an unavoidable threat. These financial institutions will compete by implementing different policies to get customers so that competition arises between these financial institutions. Then the fourth threat generated in the EFE Matrix is the gap between the ability to save and the use of financing funds, with a weight obtained is 0.251. This gap is the last threat to the sustainability of BMT, where the ability to save customers, for example, is low.
At the same time, the utilization of financing funds is substantial, so it is also a risk for BMT. The total score generated by the EFE Matrix calculation is 2.91, indicating that BMT managers in West Java respond to external factors very well in terms of carrying out strategies to capitalize on opportunities and avoid threats.
IFE Matrix Analysis
IFE Matrix Analysis was conducted to determine BMT's main strengths and weaknesses in West Java by giving respondent questionnaires and then
processing and calculating weighting, rating, and score. The treatment aims to employ strategies compatible with existing strengths and weaknesses. The IFE Matrix calculation in Sharia hotels is shown in Table 2.
Table 2 IFE Matrix
Internal Factors Average
Score
Nu. Strength Weight Rating
1
Non-bank Islamic microfinance institutions offer business transactions and everything is done on a profit-sharing basis
0.146 2.50 0.365
2 High Social Concern 0.166 3.00 0.499
3 Practical procedures and profitable profit-
sharing system 0.138 2.50 0.346
4 Excellent Service to customers 0.143 2.50 0.358 5. Providing various sharia financing
products 0.111 2.00 0.222
6 Strategic location 0.136 2.17 0.294
Weakness
1 Lack of capital owned by BMT 0.110 3.17 0.349 2 The BMT supervision system is still weak 0.125 3.33 0.416 3 In the field of sharia cooperatives, there is
a scarcity of qualified human resources. 0.121 3.17 0.382 4 The Islamic financial system is still poorly
understood by the general public. 0.102 2.67 0.272
Total 3.50
Source: primary data (processed, 2022)
Based on the calculation of the IFE Matrix, it can be seen that the main strength in BMT is a profound social concern with a resulting weight of 0.499.
BMT is one of the Islamic microfinance institutions that aims not only to pursue profit but has a social goal, namely helping the economy of the lower middle class, so BMT is an institution with high social awareness.
The IFE Matrix's second strength is that non-bank Islamic microfinance institutions offer business transactions conducted on a profit-sharing basis, with a total score of 0.365. Through the profit-sharing concept, BMT has the advantage that it is different from other financial institutions, so through the profit-sharing concept, BMT and its customers are mutually beneficial. The concept of profit sharing is strength for BMT to gain customers' trust so that customers can cooperate with BMT.
Furthermore, with a total score of 0.358, the third strength generated by the IFE Matrix is excellent customer service. Financial institutions must provide extra services, whether engaged in products or services. Every customer wants excellent service from BMT, so that excellent service can lead to customer satisfaction. Ultimately, customers will be loyal to BMT and entrust BMT as their partner in doing business. Furthermore, the fourth strength is a practical procedure and a profitable profit-sharing system with a weighted score of 0.346. Though relatively straightforward and uncomplicated procedures, BMT's strength is to
offer its products to customers so that it is also easy to collaborate between BMT and customers.
The fifth strength produced by the IFE Matrix is a strategic location with a weight of 0.294. Location is the primary consideration for BMTs to develop their business, so the establishment of BMTs needs to consider a strategic location easily accessible by customers. The IFE Matrix's final strength is that it offers a variety of Islamic financing products, yielding a score of 0.222. BMT has strength by providing various Sharia financing products that are different from other financial institutions, so these Sharia products become advantages and strengths for BMT. The total weight of the IFE Matrix is 3.50. It means that the position of BMT in West Java can utilize its strengths by covering up existing weaknesses.
There are elements of strength as well as elements of weakness. According to the IFE Matrix results, the main weakness is the BMT supervision system, which has a total score of 0.416. Supervisory institutions must monitor an organization or institution to ensure that all activities or activities carried out by BMT follow applicable rules. The weakness of the BMT supervision system is a weakness that will impede the future development of BMT. With a total score of 0.382, the second weakness identified by the IFE Matrix is a need for more human resources with expertise in Sharia cooperatives. Human Resources is a critical factor in the growth of BMT. Human resources involved in halal tourism development must be well-versed in Islamic sharia, as evidenced by Islamic attitudes and behavior. As a result, human resources must be prepared by the characteristics of Islamic Sharia. Furthermore, the third weakness revealed by the IFE Matrix is BMT's lack of capital, which results in a weight of 0.349. This capital issue is one that BMTs in West Java are facing. The lack of loans disbursed by the government and banks makes many BMTs need more capital.
The final area for improvement identified by the IFE Matrix is the public's understanding of the Islamic financial system, which weighs 0.272. Ordinary people need to understand the Islamic financial system fully. Therefore, it is the obligation of human resources at BMT to explain the Islamic financial system in detail so that human resources are needed to understand well about Islamic finance.
I-E Matrix Analysis (Internal-External)
After knowing the critical factors from the IFE Matrix Analysis process, it explains the strengths and weaknesses that exist in BMT and provides an overview of the opportunities and threats faced by BMT. The next step is to combine the IFE and EFE matrices using the IE Matrix. The purpose of using the IE Matrix is to obtain a strategy, so that the BMT can determine what strategy is right for developing BMT. The position of the IE Matrix can be known by combining the total scores of the IFE and EFE Matrix scores. Through the merger, it can be seen the current position of BMT and what strategies must be applied by the BMT. Based on the merger between the IFE Matrix (3.5) and the EFE Matrix (2.91), the sharia hotel is in the V quadrant position. This quadrant is a hold and maintain position, so the strategies that can be carried out are market penetration and sharia product development (Adha and Wijayanti 2016; Mashuri and Nurjannah 2020).
Table 3 SWOT Matrix Analysis
Internal
External
Strength
1. Non-bank Islamic microfinance institutions offer business transactions and everything is done on a profit-sharing basis.
2. High Social Concern.
3. Practical procedures and profitable profit-sharing system.
4. Excellent service to customers.
5. Providing various sharia financing products.
6. Strategic location.
Weakness
1. Lack of capital owned by BMT.
2. BMT supervision system is still weak.
3. In the field of sharia cooperatives, there is a scarcity of qualified human resources.
4. The Islamic financial system is still poorly understood by the general public.
Opportunity
1. The high interest of the people of West Java in the sharia economy.
2. Information technology used by BMT is growing to support online service programs.
3. Government support for BMT as MFI that helps the community's economy.
4. The majority of the population in West Java is Muslim.
5. BMT adopts a profit- sharing system so that it is resistant to global crises.
6. The potential for growth in BMT's market share is getting bigger, especially in West Java.
S-O Strategy
1. Utilizing government support for sharia banking by increasing the types of sharia products.
2. Approaching potential investors even though capital is limited considering the public's interest in the sharia economy is very high.
3. Making regional regulations on sharia economics.
W-O Strategy
1. Establish cooperation and partnerships with other financial institutions to obtain capital.
2. Capacity building of human resources, training and development
activities through partnerships with other banks that apply sharia principles.
3. Availability of qualified human resources in the field of Islamic financial services.
4. Education to the community through collaboration with community leaders and religious leaders.
5. Strengthening the system for fostering and
supervising cooperatives, and facilitating the certification process for SSB.
Threats
1. Moral Hazard Risk 2. The gap between the
ability to save and the use of financing funds.
3. Competition among financial institutions is getting bigger.
4. Conditions and situations of the prolonged Covid-19 pandemic.
S-T Strategy
1. Increased understanding for MSMEs, especially regarding the use of financing obtained from IMFI from those who are unable to save to those who are able to save.
2. Product innovation while still paying attention to sharia principles/avoiding usury in order to win the competition with other IMFI.
W-T Strategy
1. Coordination with Small Business Incubation Center (SBIC) regarding training for both IMFI management and the community in order to reduce the risk of moral hazard.
2. Conducting outreach to the community about the sharia system at BMT.
Source: primary data (processed, 2022)
The SWOT Analysis
SWOT analysis is a matching stage that produces alternative strategies most suitable for Sharia hotel managers by looking at the previously determined strengths, weaknesses, opportunities, and threats using the IFE Matrix and the EFE Matrix. The resulting strategy is a mix of strengths and opportunities (S-O), weaknesses and opportunities (W-O), strengths and threats (S-T), and deficiencies and threats (W-T). Based on the primary strategy discovered during the calculation BMT managers' IE (Internal-External) matrix is in a position to maintain and maintain, allowing BMT managers to formulate strategies based on their current situation, namely market penetration and service development. The SWOT Matrix Diagram for BMT managers is shown in Table 3.
QSPM (Quantitative Strategic Planning Matrix)
The final stage of strategy analysis formulation is selecting the best strategy using QSPM. The strategy is prepared based on a SWOT analysis; BMT in West Java then makes strategic priorities that the BMT can implement. The alternative simplifies by calculating the alternative interest using the QSPM method, which has been linked to the position of Sharia hotels.
Then prioritize what strategies may be implemented by the BMT first. The alternative strategies are as follows, based on the findings of the assessment: (1) making use of government support for Islamic banking by expanding the types of Sharia products available; (2) approaching potential investors even though capital is limited, considering the public interest in Islamic economics is very high; (3) making regional regulations on sharia economics; (3) establish cooperation and partnerships with other financial institutions to obtain capital; (4) capacity building of human resources, training, and development activities through partnerships with other banks that apply sharia principles; (5) availability of qualified human resources in the field of Islamic financial services; (6) education to the community through collaboration with community leaders and religious leaders; (7) strengthening the system for fostering and supervising cooperatives, facilitating the certification process for SSB; (8) increased understanding of MSMEs, especially regarding the use of financing obtained from IMFI from those who are unable to save to those who are able to save; (9) product innovation while still paying attention to Sharia principles in order to win the competition with other IMFI; (10) coordination with SBIC regarding training for both IMFI management and the community in order to reduce the risk of moral hazard; (11) conducting outreach to the public about the Sharia system in BMT.
The following are the results of calculations using QSPM analysis on BMT in West Java, starting with the highest value: (1) making regional regulations on the Sharia economy (7.412); (2) increased understanding of MSMEs, especially regarding the use of financing obtained from IMFI from those who are unable to save to those who can save (7.369); (3) provision of competent human resources in the field of Islamic financial services (7.298); (4) Establish cooperation and partnerships with other financial institutions to obtain capital (7,225); (5) product innovation while still paying attention to Sharia principles in order to win the competition with other IMFI (7.224); (6) strengthening the system of fostering and supervising cooperatives and facilitating the certification process for SSB (6.566); (7) education to the community through collaboration
with community leaders and religious leaders (6.470); (8) coordination with SBIC regarding training both IMFI management and the community in order to reduce the risk of moral hazard (6.432); (9) approaching potential investors even though capital is limited, considering the public interest in the Sharia economy is very high (6.267); (10) capacity building of human resources, training, and development activities through partnerships with other banks that apply Sharia principles (6.248); (11) establish cooperation and partnerships with other financial institutions to obtain capital (5.931); (12) utilizing government support for Sharia banking by increasing the types of Sharia products (5.813).
Based on the research results obtained from the results of the EFE and IFE Matrix calculations, the results obtained are seen from internal factors, which include strengths and weaknesses in the development of BMT in West Java. The strength possessed by BMT in West Java includes successively high social awareness with a resulting weight of 0.499. The second strength resulting from the IFE Matrix is that IMFI non-bank offer business transactions, which are carried out on a profit-sharing basis with a total score of 0.365. Furthermore, the third strength resulting from the IFE Matrix is excellent customer service, with a total score of 0.358. Furthermore, the fourth strength is a practical procedure and a profitable profit-sharing system with a weighted score of 0.346. The fifth strength resulting from the IFE Matrix is a strategic location with a resulting weight of 0.294. The final strength of the IFE Matrix is providing various Sharia financing products with a score of 0.222. The total weight in the IFE Matrix is 3.5. It means that the position of BMT in West Java can take advantage of its strengths by covering up existing weaknesses. Apart from the strengths, there are also weaknesses. Based on the results of the IFE Matrix, the main weakness is the BMT monitoring system which is still weak, with a total score of 0.416. The second weakness of the IFE Matrix is the need for more competent human resources in Sharia cooperatives, with a total score of 0.382. Furthermore, the third weakness resulting from the IFE Matrix is the lack of capital owned by BMT, with a resulting weight of 0.349. The last weakness produced by the IFE Matrix is the public's understanding of the Islamic financial system, which still needs to improve with the resulting weight of 0.272.
When viewed from external factors, based on the results of the study, the most significant opportunity is the high interest of the people of West Java in the Islamic economy, with the resulting weight score of 0.391. Then, the second opportunity resulting from the calculation of the EFE Matrix is that the information technology used by BMT is growing to support online service programs with a resulting score of 0.314. Meanwhile, the third opportunity is the potential for growth in the BMT market share, which is getting more significant, especially in West Java, with a resulting weight of 0.297. Then the fourth opportunity resulting from the calculation of the EFE Matrix is that the majority of the populations in West Java are Muslims, with the resulting score of 0.284.
Furthermore, the fifth opportunity generated from the EFE Matrix is government support for BMT as an LKS that helps the community's economy with a resulting weight of 0.268. Furthermore, the last opportunity resulting from the calculation of the EFE Matrix, based on the total weight, is that BMT adheres to a profit- sharing system so that it is resistant to global crises with a resulting weight of
0.240. The first threat generated in the EFE Matrix is the prolonged condition and situation of the Covid-19 pandemic, with a resulting weight of 0.309. The second threat generated in the EFE Matrix is Moral Hazard Risk, with a resulting weight of 0.287. The third threat generated in the EFE Matrix is competition between financial institutions which is getting more significant with the resulting weight of 0.269. Then the fourth threat generated in the EFE Matrix is the gap between the ability to save and the use of financing funds, with a weight of 0.251. The total score generated in the calculation of the EFE Matrix is 2.91, meaning that the response given by BMT managers in West Java to external factors is classified as very good in carrying out strategies to take advantage of opportunities and avoid threats.
This study's results follow research from Permana and Adhiem (2019), which states that strategies that can be used to develop BMT are developing HR competencies, strengthening cooperative business management, and educating the community through collaboration with community and religious leaders. Then Fahmi and Muqorobin (2020) also state the results of their research that BMT La Tansa Gontor has several weaknesses, one of which is the lack of structured cadre formation so that it forms a pattern of value transformation and senior to junior learning experiences difficulties in contrast to research from Widiastuti, Rusydiana, and Firmansyah (2017) which states that sector flexibility an economy with a high public willingness to carry out sharia-based transactions as a second place is an alternative strategy that can be carried out. The results of the research by Musarofah et al. (2022) state that the BMT development strategy is to improve the quality of products and services will improve the company's capacity by leveraging the company's teamwork capabilities and experience to reach the potential market. Meanwhile, Tho'in (2021) states that the promotion strategy that is the most dominant in attracting newcomer members or customers events and experiences as well as public relations and publicity.
CONCLUSIONS
BMT's strengths in West Java include: (1) respectively, deep social concern; (2) that non-bank Islamic microfinance institutions offer business transactions, all of which are conducted on a profit-sharing basis; (3) excellent customer service; (4) practical procedures and a profitable profit-sharing system;
(5) Strategic location, 6) the ability to offer a wide range of Islamic financing products. There are elements of strength as well as elements of weakness. The main weakness is (1) the BMT supervision system, which is still ineffective; (2) a scarcity of qualified human resources in the field of Sharia cooperatives; (3) a lack of capital; (4) that the general public still has a poor understanding of the Islamic financial system. Opportunities and threats are external factors that influence the development of BMT in West Java. West Java's people are very interested in Sharia economics. The second opportunity arising from the EFE Matrix calculation is that BMT's information technology is evolving to support online service programs. Meanwhile, the third opportunity is the potential for BMT's market share to grow, particularly in West Java. The fourth opportunity revealed by the EFE Matrix calculation is that most of West Java's population is Muslim.
Furthermore, the EFE Matrix generates a fifth opportunity: government support for BMT as IMFI, which benefits the community's economy.
Furthermore, the final opportunity resulting from the EFE Matrix calculation, which is based on the number of weights, is that BMT implements a profit-sharing system to resist the global crisis. Meanwhile, the condition and situation of the Covid-19 pandemic, which is still ongoing, is the first threat generated on the EFE Matrix. The Moral Hazard Risk is the second threat generated by the EFE Matrix. The third threat identified by the EFE Matrix is growing competition among financial institutions. The gap between the ability to save and the use of financing funds is the fourth threat generated by the EFE Matrix. According to the positioning, the turnaround strategy in developing the BMT strategy in West Java is in quadrant III, so it employs the WO strategy.
Despite internal weaknesses, BMT in West Java faces enormous opportunities in this position. Strategies that can be taken to develop BMT in West Java are to take advantage of government support for sharia banking by increasing the types of sharia products, approach potential investors even though capital is limited considering the public interest in sharia economy is very high, make regional regulations on the economy sharia, establishing cooperation and partnerships with other financial institutions to obtain capital, increasing human resource capabilities, training and development activities through partnerships with other banks that apply sharia principles, providing competent human resources in the field of sharia financial services, educating the public through collaboration with leaders community and religious leaders, strengthening the system of fostering and supervising cooperatives, and facilitating the certification process for SSB, increasing understanding for MSMEs, especially regarding the use of financing obtained from IMFI from those who cannot save to those who can afford it saving, product innovation while still paying attention to Sharia principles in order to win the competition with other IMFI, coordinating with SBIC regarding training for both IMFI management and the community in order to reduce the risk of moral hazard, and holding outreach to the community about the sharia system in BMT.
The implications of the results of this research are as input material for the development of new policies, strategies, and efforts to develop BMT both in the pandemic era and after the Covid-19 pandemic and to develop theories for alternative strategies in developing BMT in the Covid-19 pandemic era. As for suggestions from this study, BMT should prepare human resources competent in Islamic finance to provide services to people who still need to understand Islamic microfinance institutions. The West Java Provincial Government should provide clear regulations governing BMT.
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