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Islamic Economics for the Needy: Prospect and Challenges in Islamic Microinsurance in Indonesia


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Tanggal Publikasi: 5 Agt 2012


Shariah-compliance could be a positive element towards the realization of the poverty alleviation in the developing economy. By this spirit, the number of Micro Islamic Financial Institutions has grown significantly. It proves the alignment between Islamic economics and the subsistence society. By February 2012, there are about 344 sharia cooperation and 5000 Islamic Micro Financial Institution spread all over Indonesia.

Other than needs for financial access, low income society also needs for insurance services. The poor face more potential risks compared to the wealthy, yet they are more vulnerable to the same risks for they don’t have enough resources to cover them.

As microinsurance until now is a relatively new concept within the microfinance industry only few MFIs offer insurance products. The first Islamic Microinsurance was established in 1997 in Lebanon (Erlbeck et.all, 2011). Later, other majority Muslim populated countries started to establish the Islamic microinsurance service providers around 2010; Indonesia, Malaysia, Sri Lanka, Bahrain and Pakistan (Patel, n.a.; ICMIF takaful, 2010). In Indonesia, there are now two existing providers and one other new comer yet to offer the Islamic microinsurance service.

This research will study the prospect and challenges for the Islamic microinsurance service in Indonesia. To achieve the goal, focus will be given to observing and exploring problems and challenges encountered in providing the service, and so the proper order of priorities and potential solutions could be given in order to broaden the untapped market segment. Thus, the significance of this research is to put effort on decreasing the gap between the big population of Muslim in Indonesia and the number of Islamic microinsurance service provider.

Both primary and secondary data are utilized to explore the problems, challenges, and alternatives of solution of providing Islamic microinsurance services. Some suggestions are made for the sustainability of the present findings. Row data will be gathered through depth interviews and questionnaires mainly containing 2 questions about the problem and potential solution in developing Islamic microinsurance in Indonesia. Interviewees included experts; some of them are managers in Islamic Microfinancial institutions, and some others are academician and researchers.

The ANP approach allows us to use quantitative and qualitative information; this makes this methodology more flexible. The method will contribute many advantages since this research counts on the experts’ perception for making estimations. The process of ANP comprises four major steps, which are: 1) Model construction and problem structuring, where the problems and challenges will be decomposed into a rational system like a network; 2) Pairwise comparisons matrices and priority vectors; 3) Supermatrix formation; and 4) Selection of best alternatives (Chung et al, 2006).

The remainder of this research will be structured as follows: Section two will discuss the theories underpinning the study. Section three will make an overview of Islamic microfinance with brief discussion on the profile of the Islamic microinsurance providers in Indonesia. Section four will discusses the methodology used for the study while section five will present the findings. Section six will highlight the limitation of the study while section seven will conclude.


Islamic microinsurance, prospect, challenges, ANP


Priantina, Anita, Islamic Economics for the Needy: Prospect and Challenges in Islamic Microinsurance in Indonesia (August 5, 2012). 

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