The study aims to evaluate cause and effect of financing problems on Baitul Mal wa Tamwil (BMT)
during Covid 19 and to analyze the strategy undertaken by BMT to handling financing problems.
This study is qualitative research. The primary and secondary data obtained from observations,
interviews, and documentation. The informant of study are top management and members of BMT Al-
Hidayah Kotaraja Lombok Timur. The data are analyzed using the FMEA (Failure Mode and Effect
analysis) approach. FMEA method is a systematic method used to identify and prevent problems with
a company's product or business process. All process is calculated in score, namely Risk Priority
Number (RPN) and showed in the Pareto diagram. Financing problems are categorized as substandard,
doubtful, and bad financing. The causes are lack of employee ability to assess prospective member's
character who does not want to pay installments and natural disaster (Covid-19 pandemic) as well.
Financing problems has an impact on the emergence of financing risk. The direct impact felt by BMT
Al Hidayah Kotaraja is that the circulation of money is not smooth, while the return for profit sharing
to deposit members must still be given every month. The lack of employee ability to assess
prospective members is the main cause. The strategy undertaken to tackle financing problems is not
appropriate. They focus on members. They should focus to improve the ability of employees to assess
prospective members. The study also found that FMEA is effective in overcoming financing problems
in BMT.

Keywords: Financing problems, NPF, BMT, FMEA