JULO-JULO TEMBAK PHENOMENON IN PADANG CITY:

Evaluation Study On Role Baitul Mal Wa Tamwil (BMT) in Liberating

Society from Moneylenders

By: Dr. Rozalinda, M.Ag

Sharia Faculty Lecturer IAIN Imam Bonjol Padang

rozaldi.chaniago@gmail.com

Abstract

The majority of small traders in Padang City borrow capital from moneylenders.In tradisional markets, the transaction between the merchant and the moneylenderspacked in form of julo-julo tembak and julo julo panjang. The chairmen julo julo lendthe capital to traders with additional interest. The problem in this study is what are thefactors that cause people still use the services of moneylenders? How does the role ofBMT in freeing people from the bondage of moneylenders?

The results of the study it is found that people still use the services ofmoneylenders because: First, demand for capital. Second, loan process is quick, theprocedure is easy. Third, the difficult access to the financial institutions. Fourth, less ofsocialization about the existence of BMT. Fifth, the low awareness of the practice ofreligion in usury prohibition. Meanwhile, BMT whose mission to free the society fromusury economy has not shown a significant of role.

Keywords: moneylender, usury, julo-julo tembak, julo-julo panjang,

microfinance.

A. Backgaround of the Problem

Policies about development of Islamic Microfinance

Institutions (LKMS) Baitul Maal Wat Tamwil (BMT) has an important

position for the improvement of living standards and the economy

ofr the society. Seeing this a strategic position, BMT is

expected to be a major pillar of national economic defense

system. BMT as Islamic Microfinance Institutions have a

significant role in helping small and medium-sized businesses.

The presence of BMT is considered capable of solving the problem

of capital experienced by small traders who are not able to

access credits on banking. These institutions play a role in

stimulating small businesses productive and release people from

the bondage of moneylenders.

However, existing fact on traditional markets in the city of

Padang, most traders borrow money from moneylenders. This happens

because they have difficulty borrowing money from financial

institutions, banks. They were forced to borrow money from

moneylenders, because moneylenders considered able to meet their

needs immediately, easier requirements despite high interest

rates.

In this market, the practice of moneylenders is done in form

Julo-julo Tembak. Managers called by the chairman Julo-julo or induak

julo-julo. The chairman Julo-julo Tembak lend capital to traders over a

certain period with the addition of interest. The Loans

Rp1,000,000,00 have to be paid for Rp1,200,000,00 during 40

days they have to pay Rp30,000,00 daily or Rp20,000,00 for 60

days. That was explained by Eti a chairman Julo-julo in Pasar Raya

Padang explaine.1 There are Many Practice money lenders in the

community of Padang that lead the small business merchants in the

city does not grow well. Most of its profits spent to pay teh

high loan, that is 20%.

1 Eti ( Mak gendut ), Chairman of Julo-julo, Interviews, Padang, May27, 2012.

Ideally, the presence of BMT can free people from the

bondage of moneylenders. But the fact, not all the people can

liberate themselves from the bondage of moneylenders. As

recognized by Anto, for those who want to get a quick funds, they

still asked their need to head Julo-julo, even though high interest

rates. The traders prefer to borrow from the chairman Julo-julo

because the process is faster. Just wait a few moments, funds can

be obtained immediately. If they go to BMT must meet

administrative requirements and surveyed at advance and take

three or four days.2

One phenomenon that is unique and deserves to be

investigated is fast growing of BMT in Padang. Since 1996 in

Padang it have been established, led by BMT Taqwa Muhammadiyah,

based in Pasar Raya Padang. What's interesting is the placement

office of BMT Taqwa Muhammadiyah took in market base region.

This market is the operational base of the chief Julo-julo Tembak

(lender) that offers financing services in a short time. 3

The problem why many people who use the services of

moneylenders ? what are the factors that cause people still use

the services of moneylenders, there have many BMT existed in

Padang City and easily accessible by the public. How the role of

BMT Taqwa Muhammadiyah in freeing people from the bondage of

moneylenders.

2 Anto, Trader, Interviews, Pasar Raya, May 27, 2012.3 Ismail, Director of BMT Taqwa Muhammadiyah, Interviews, Padang,

February 21, 2012.

B. Research Methodes

This research is a qualitative descriptive study, to find

express the role of BMT in freeing people from the bondage of

moneylenders and observe the factors that lead people still

depend on moneylenders. The source of the data in the study is

that people who have been involved in the practice of

moneylenders, ranging from head Julo-julo up to the merchants who

utilize the services of moneylenders. Because the population can

not be predicted, the sample taken throughsnowball sampling. In

addition, the data was also obtained from the BMT Taqwa

Muhammadiyah Padang.

To obtain data on the phenomenon the moneylenders and role

BMT to overcome of moneylenders, this study capture the data

with: 1) an interview with the head Julo-julo, traders and the

BMT. 2) Observation, by observing the transactions done by

traders and head Julo-julo on the market. 3) Documentation of the

number of customers who use the services of Muhammadiyah Taqwa

BMT Padang and the number of traders in traditional markets in

Office Market Padang City.

C. BMT As Islamic Microfinance Institutions

Reluctance of the banking institutions in providing capital

for informal sector entrepreneurs, make them become them the

target of moneylenders. Therefore, one of which is expected to

be a source of capital for the small business sector are

microfinance institutions including Islamic microfinance

institutions such as BMT.4

BMT is an integrated independent business cored Baitul Mal

wa Tamwil with the activities to develop productive efforts in

improving the quality of small business economy. In addition, BMT

can also accept zakat, donation, and the charity, as well as

distribute.5 In contrast to other microfinance (microfinance

institutions), BMT as the Microfinance institution sharia has its

own privileges. BMT is not only as an intermediary microfinance

institutions purely business oriented, but it also has other

functions that are social function.

The general role of BMT is to provide guidance and funding

that based on sharia system. As an Islamic financial institution

that have direct contact with the small community life, the

existence of BMT has several roles namely, a) To far away people

from the non-Islamic economic practices, actively do

socialization among the people about the importance of the

Islamic economic system. This can be done with trainings on how

to Islamic trading. b) Conduct training and small business

financing. BMT should run actively the function as micro finance

institutions, for example by doing of mentoring, coaching,

4 Helmi Haludin, “Membangkit Kearifan Lokal dalam Pemberdayaan EkonomiSyariah, Paper presented at the Governing Council Seminar Silakda andIndonesian Intellectuals Association (ICMI) Regional Organization of Padang ,Padang April 28, 2012.

5 PINBUK BMT Pedoman Cara Pembentukan BMT Balai Usaha Mandiri Terpadu, (Jakarta:PINBUK , t , t ), p. 1.

counseling, and monitoring of the client businesses or the

general public. c) Removing dependence of people from

moneylenders. The Communities tyhat still depend moneylender

caused be moneylender able to meet the needs of the community in

the immediate funding problems. On short time BMT should be able

to serve the community better, for example, funds are always

available at any time, a simple procedure, and so forth.6

This means the existence of BMT plays a very important role

in order to empower the small economically community and to

releasi them from the bondage of moneylenders. In case, BMT can

be more proactive in accommodating the needs of the community,

especially small traders in their capital problems. The existence

of BMT has been able to become an alternative funding source for

small businessesman, especially small businessesman that are

informal.

D. Factors That Cause Publics Used Moneylenders Service

Accordance with the extent of the problem in this study,

this study only focused on the markets where BMT Taqwa

Muhammadiyah existing there. Namely Pasar Raya, Bandar Buat

Market, Lubuk Buaya Market, and Market Siteba.

The practices of moneylenders in the traditional markets in

the city of Padang had happened for long time. The business

sometimes done by a family, group or individual. For example, in6 Zainul Arifin, Dasar-dasar Manajemen Bank Syariah, (Jakarta: Alvabet ,

2002), p. 163-165.

the Pasar Bandar Buat, this business has been done by the family

for generations, so that the circulation of money among traders

has already they mastered. 7

Before explaining about the factors that cause people

utilize the services of moneylenders, previously will be

described the mechanism of the practice of moneylenders in the

traditional markets in the city of Padang. The forms of

transactions carried out by the lender in traditional markets in

the city of Padang is packaged in a Julo-julo Tembak and Julo-julo

Panjang.

1. Julo-julo Tembak

Julo-julo Tembak is a form velocity of money among chief or

head Julo-julo with people who need quick funds by receiving money

from the head of Julo-julo and re pay it fo certain period. For

example, someone who need of funds as much as Rp 1,000,000,00 it

will pay Rp1.200.000,00 to the head of Julo-Julo. She should pay

daily Rp30,000,00 for 40 days, or Rp20,000,00 for 60 days. The

loan as much as Rp3,000,000,00 it will be paid Rp3.600.000,00.

She should pay daily Rp60,000,00 for 60 days.8

2 . Julo-julo Panjang, or Julo-julo Banomor or Julo-julo Barisi.

At Julo-julo Panjang, participants are required to pay in

advance to a certain period eg six times, for members who wish to

receive money Julo-julo, it takes the serial numbers first. As7 Fazat Rafiah, Chairman of BMT Taqwa Muhammadiyah Bandar Buat Market,

Interviews, Padang, August 1, 2012.8 Epa, Merchant, Chairman of Julo-julo, Interviews, Padang, July 22,

2012.

described Ermaini a merchant who also serves as chairman Julo-julo

in Pasar Lubuk Buaya Padang that participants pay to head Julo-

julo according to the number of rounds plus one or the term "Bakaki

Satu". For example, round 100 days, Rp11,000,00 installment, per

day, a participant pays to the head as much as 100 times.9

Mechanism Julo-julo Tembak and Julo-julo Panjang begins with

candidate borrower Julo-julo expressed his wish to borrow

sufficient funds to head of Julo-julo. Chairman of Julo-julo will give

the loan on that day. The loans that can be obtained from

1,000,000,00 until Rp5.000.000,00. Julo-julo Panjang on traditional

market in the city of Padang has not need specific requirements

and procedures. However, the element of trust Julo-julo of chairman

toward the candidate prospective borrower is very important,

because it will affect to lending given. Mechanism the

moneylenders practices packaging Julo-julo Tembak or Julo-julo Panjang

that occured in the traditional markets in the city of Padang on

generally the same. For late payments due to certain reasons, the

payment can be doubled in the next day or or given additional

amount of days the payment should be. The case like this do not

sanction. However, the person categorize in the " black list" by

the head of Julo-julo so that he will not be given a loan or will

not get additional loans any more. 10

Majority of street vendors in the markets in Padang admitted

that they participate in Julo-julo Tembak and panjang, banomor.

9 Ermaini, Trader, Interviews, Padang, August 2, 2012.10 Nel, Head of Julo-julo, Interviews, Padang, July 30, 2012.

Demand for Julo-julo Tembak is quite high. In a day a head Julo-julo

can rotate as much money Rp80.000.000, this declared by Darmalis,

a chairman Julo-julo who opened the business in Pasar Raya. 11

The high demand for the services of moneylenders in the

traditional market in the city of Padang is caused by several

factors as follows:

1. The need for capital and other urgent needs.

The main cause of the traders borrow money to moneylenders

are factors the need of capital or other urgent needs. The

traders borrow money to moneylenders to trade. They admitted

using Julo-julo Tembak is for capital needs and other needs. War, a

merchant, who had borrowed from the chairman of Julo-julo at Pasar

Raya Padang explained.12

2. The loan process is fast, easy procedure, and the repayment

period is relatively short.

Another reason traders borrow money to moneylenders is

because the loan process quickly and without any conditions. The

way is just convey the desire to borrow money to head Julo-julo,

someone immediately can get the loans on that day.13 The traders

used to familiar with Julo-julo because the procedure is easy, and

the process is fast, they can borrow money in real time without

being burdened with any requirement, just based on trust, and

without borg.14 Because this easyness, cause the the traders11 Darmalis, Chairman of Julo- julo, Interviews, Padang, July 21, 2012.12 War, Merchant, Interviews, Padang, July 30, 2012.13 En, Trader, Interviews, Padang, July 30, 2012.14 Kasmawati, Chairman of Julo-julo, Interviews, Padang, July 21, 2012.

enjoy to Julo-julo Tembak. This means that the existense of

moneylenders in the traditional markets because the traders need

funds quickly and there is no requirement needed. They are not

concerned about how much the interest, the most important thing

is get additional capital quickly. In addition, there is

dispentation if they can not pay, for example because of illness.

This situation can’t be met at the bank or BMT. The loans are

done in short term such as monthly, weekly, even daily. These

short term loans can only be made by the moneylenders.15

3. Difficulty accessing financial institutions.

Among the fundamental reason why traders prefer to use the

services of moneylenders is the difficulty of accessing financial

institutions including BMT. This is due to the process and

requirements to get financing from banks or BMT are assessed

complicated, there are many requirements, the survey should be

used, the procedure is long, there is slaughtering on the money

received. Meanwhile, the traders generally need fats money in

hurry.

That is the reason, that most traders prefer to use the

services of the money lenders than to BMT. Financing process is

too long and use collateral. Because the complexity of the

requirements and procedures for financing at a bank or BMT, make

traders at Pasar Siteba Padang finally come to head Julo-julo.16

In addition, because they trade full day, it's difficult to go to15 Winda, Traders , Interviews, Padang, July 21, 2012.16 Bayu Abbas, Merchant, Customer of BMT, Interviews, Padang, July 19,

2012.

the bank. They are reluctant to leave their trade to take care of

all the requirements and come to BMT. So traders do not want to

borrow funds to BMT .

Even the traders who have long been a customers in BMT

admitted due to didn’t get funding from BMT make them finally go

to Julo-julo. They also admitted they have ever applied for a loan

to BMT, the loan process is difficult, requirements too much. In

the process of borrowing needs three times meeting with the BMT,

it did not get a loan. Finally, they borrow to the chairman Julo-

julo.17

4. Lack of socialization of the BMT.

Many street vendors still use the services of moneylenders

in traditional markets is due they don’t know the existence of

BMT. Some of the street vendors in Pasar Raya Padang are not

familiar with BMT at all. The reality is due to the lack of

socialization of the existence of Islamic Microfinance

Institutions that had stood since the 29 September 1996. With

time that a long enough, the existence of BMT should be well

known among traders where the BMT was located. The socialization

of the BMT to customers about Islamic microfinance institutions

is still limited. The lack of socialization of BMT and Islamic

economics to society, cause them do not know that borrow in BMT

less costly than to moneylenders. So they prefer to use Julo-julo

Tembak.18

17 Misnawati, Merchant, Interviews, Padang, August 2, 2012. 18 Robi Adrian and Bayu Abbas, Merchants, Customers BMT, Interviews,

Padang, July 19, 2012.

5. Low awareness of the practice of religion theaching in usury

prohibition.

Most traders understand that Julo-julo Tembak is hot money, not

a blessing, interest. So some of them do not participate Julo-julo

Tembak. even, there are traders who see Julo-julo Tembak was not

halal. They feel that the trade with the capital through

moneylenders money does have not a blessing. Most of its profits

spent to pay out the high interst which reached 20%. He must go

into debt and debt again, finally the money they get earned to

pay installment.19

Although the practice of moneylenders in the community in

the city of Padang resulted some of small traders in the city can

not growing, because Julo-julo Tembak is " hot money ". However,

the fact that most traders still depent their capital to the head

Julo-julo. The knowledge and understanding about usury prohibition

by some traders were ignored because of an urgent need.

According Fazat Rafiah, education and understanding of

religious factors also affect responden of the street vendors

toward moneylenders, when they need quickly funds, they come to

Julo-julo Tembak, even though they know that in BMT pay installment

is cheaper than Julo-julo Tembak. Because of their very need,

urgent, the issue of religious teachings, they ignore it.20

19 Fazat Rafiah, Chairman of BMT Taqwa Muhammadiyah Pasar Bandar Buat,Interviews, August 1, 2012.

20  Fazat Rafiah, Chairman of BMT Taqwa Muhammadiyah Pasar Bandar Buat,Interviews, August 1, 2012.

DEMAND Capital or other needsThe process is quick, simple procedure, without collateral

SUPPLYLoans are

packaged in-Julo-julo Julo-

tembak and Julo-julo panjang

The process is quick, simple procedure, without

collateralShort repayment

time, and flexible

Ironically, the heads Julo-julo scattered in the traditional

market in the city of Padang is mostly already performed the

pilgrimage in fact already repeatedly. However, according to

Kasmawati a chairman Julo-julo at Pasar Raya Padang their business

is not usury. He also admitted he was not a loan shark, his

bussiness is halal. He lend money to traders only to help.

According to the chairman Julo-julo that this business has been

operated since 1984, the business in which they carry out is

halal, for helping people in need of capital. They undergo this

effort by surroundig the market, so it is natural they ask more

for "balanjo" of capital provided to traders and the public.

Moreover, they also borrow from the bank, there installments and

interest to be paid. According to them, it is impossible they

lend money freely without profit “maminjam anda”, while traders

get profit from the capital that they lend. The transaction is

done on the basis of compliance. So, his business is not usury.21

Transactions between traders with head Julo-julo is the same as

the interaction of supply and demand where moneylenders offer

money needed by traderslike that are able to be seen in the image

below:

Figure 1

Transactions Moneylenders in Traditional Markets in Padang

21 Kasmawati, Chairman of Julo-julo, Interviews, Padang, July 21, 2012.Mar, Chairman of Julo-julo, Interviews, Padang, July 30, 2012.

DEMAND Capital or other needsThe process is quick, simple procedure, without collateral

SUPPLYLoans are

packaged in-Julo-julo Julo-

tembak and Julo-julo panjang

The process is quick, simple procedure, without

collateralShort repayment

time, and flexible

Difficulty access financial institutionsLack of socialization BMT and Islamic economics

Lack of awareness about the practice of religion teaching about prohibition of usury

Urgent needs requires availability of funds rapidly. Only

moneylenders who they think is capable of helping them in

difficult moments like that, they do not care with high interest

as long as their needs are met. While the bank or BMT only able

to provide an attractive offer with a series of procedures and

requirements that precisely according to them is hard. From all

the hassle of obtaining a loan from a bank, or BMT, the ease of

obtaining loans from moneylenders, low educational background,

and the lack of information about BMT makes street vendor

concluded that only moneylenders the way out of their economic

problems daily. Moneylenders assumed by merchants has a

strategic role to overcome the problem of short term capital.

Surprisingly, facing money lenders who freely offer money in

the markets, government and related agencies seemed to keep

silent. Scholars and preachers seems let the usury practice

dominate the market. BMT or other microfinance institutions

passively waiting for traders to come to be in the customer.

From the business aspect, the chairman Julo-julo distribute

money to its members whereas a financial institution distribute

money to customers have the same position, both look for

profit. The difference lies only in the legality and contract.

Money lenders distribute fund and look for profit for personal

gain has no business legality. Meanwhile, financial institutions

distributing funds and looking for profits not for personal gain,

but for the benefit of the institution and the community together

as well as having a strong business legality. Financial

institutions doing business to collect funds and distribute it to

the people governed by laws and regulations.

If seen on the definition usury meaning, ziyadah is

additional capital more or less,22 So the practice Julo-julo Tembak

or Julo Julo Panjang/Banomor/Barisi, is usury. The word rente comes from

the Dutch "rente" which means the interest or profit. Actors

rente called rentenir. Rentenir is a person who informally

provide loans (loans) to customers by charging a very high

22 Sayyid Sabiq, Fiqh as- Sunnah, Juz III, (Lebanon: Dar al-Fikr, 1983), p.176.

interest, or often called lintah darat mean people who earn a

living with interest.23

In Islam, the practice of interest or usury prohibited.

Interest according to the scholars means additional money on

lending transaction (al-qard/credit) were calculated from capital

without take into consideration the results of the amount based

on capital a certain period, that be calculated with certainty in

advance based on a percentage of the amount of loan. Rente were

practiced by lenders in the study of jurisprudence called usury.

If we look at the meaning of interest or "balanjo" capital or "kaki

satu" it certainly is categorized nasiah usury, namely Additional

required taken by the loan from the debtor, as the balance of

debt payment delay.24

In addition, from the Islamic perspective, the financial

institution sharia as BMT or Islamic banks distribute funds to

its customers using the murabaha financing, mudharaba financing,

or bai bitsaman ajil of financing. Taking advantage in the purchase

contract or agreement for deviding results is allowed in Islam.

While money lenders distribute the funds to the community in the

form qardh or credit debts. In Islam, taking advantage in the

contract in dept is usury (riba). As pointed out in the prophetic

traditions.

23 Pusat Pembinaan dan Pengembangan Bahasa Indonesia, Kamus Besar BahasaIndonesia, (Jakarta: Balai Pustaka, 1990), p. 743.

24 Abdurrahman al-Juzairi, Ala al-Fiqh al -Arba'ah Mazahib, Juz III, (Mesir:Maktabah al-Kubra al-Tijariyah , 1969), p. 245.

و ه�� ة� ف�� ع�� ف� ن� ى م� ر ج���� ���رض� ل ق� لم :ك��� ة وس��� ال رس�ول ال�لة ص�لى ال�لة ع�لي" ال: ق�� ة ق�� ى ال�لة ع�ي� ع�ن4 ع�لى رض�

ى هق� ي" ة ال�ب8 رج� ج�� ا. ا> ب?� وه ال�ر ن4 وج�� ة م� 25 وج�

All accounts payable including profitable are usury.

E. Role BMT Taqwa Muhammadiyah in Frees Society of Moneylenders

Shackles

As described before, in general, traders in the tradisinal

markets in Padang City borrow money from moneylenders. Usurious

transactions are packaged in the form of Julo-julo Tembak and Julo-

julo Panjang. It has been applied since long time before the BMT

stood.

Discussion about the role of BMT in freeing people from

moneylenders will be focused on the process of financing at BMT,

socialization of Islamic economics done BMT to the community and

its role in freeing society from moneylenders.

1. Financing Process in the BMT Taqwa Muhammadiyah

BMT efforts made to rid the society of moneylenders is in

the form of financing. BMT distributes financing to customers

still maintaining the precautionary principle with establish some

terms and procedures, they are a) There is a business and it has

25 Abu Bakr Ahmad ibn al-Husayn ibn Ali al-Bayhaqi, Sunan al-Bayhaqi,(Assembly Dairah al-Maarif al-Nizamiyyah al-Kainah, 1344 H), Juz 2 p. 72.

been running for at least one year. b) There is a guarantee like

land certificates, gold, and deposits in BMT. c) Eligible

administration such as ID cards, family card and Certificate of

Business from the official market. The financing process need

three days, after the requirements are obtained, surveyed, the

the committee meeting, then disbursement. Financing process for

loans above Rp15.000.000,00, could reach four days or one week,

and loan for 50,000,000, the process could take more than a week.

This mechanism is done because the money distributed are customer

money. So there needs to be caution because it is a mandate. If

the some customer want to get load any more, his installment of

funding run smoothly, could be disbursed the next day because no

survey anymore.26

As with banks, BMT as financial institutions, in

distributing financing to community needs to pay attention to a

few key principles relating to the overall condition of the

customer candidate. This principle is known as the principle 5C,

namely the character, capacity, capital, colateral, and

conditions of economy.27 Mainly speaking, the process of

providing financing in BMT carried out in five stages, namely

finance proposal, finance analysis, finance committee meeting,

the binding of financing, and the disbursement of funds.

26 Ismail, Director of BMT Taqwa Muhammadiyah, interviews, Padang, July25, 2012.

27 Veithzal Rivai, Islamic Financial Management, Jakarta Rajawali Press, 2008,p. 348-352.

Most traders in traditional markets in the city of Padang

are customers of BMT Taqwa Muhammadiyah, they save their money

in BMT and get additional capital to finance trade. The processes

and the procedures financing in BMT Taqwa Muhammadiyah are not

difficult.28

In addition, the traders in traditional markets there are

just being a customer savers in BMT. According to Eti a trader

Market Padang Siteba he takes advantage of BMT services only to

save money, to get financing they don’t want, because they are

lazy with conditions, and the procedure is very complicated have

quarantee, and should be surveyed first.29

There are also traders besides utilizing the services Julo-

julo and also use the services of BMT Tawqa Muhammadiyah to

obtain additional capital to trade them. Instead, head Julo-julo

also become customers in BMT Islamic microfinance institutions

whose mission is to free people from moneylenders. A few traders

in traditional markets in the city of Padang claimed that they

have borrowed to BMT. Installment in BMT, according to them,

lighter than the installments to chairman Julo-julo, but because

there is an urgent need, finally they back to Julo-julo Tembak.

That was sai by Arnalis a trader who borrows Julo-julo Tembak also

borrow at BMT. Borrowing to BMT the payment is lighter, but

28 Robi Adrian, Vendors, Customers BMT, Interviews, Padang, July 19,2012.

29 Eti and Imah, Traders, Interviews, Padang, July 22, 2012.

sometimes BMT requirements make difficult the traders to obtain

the loans. While Julo-julo meet the needs of merchants quicker.30

2. Socialization about BMT and Islamic Economics to the public

BMT efforts to educate and socialize BMT has been done since

BMT stands up, through lectures during prayer time at zhuhur,

through the brochures, or visiting the traders by marketing of

BMT to explain about BMT and its products. BMT socialization to

society done by penetrating the market and into the small

traders, socialization about BMT to society. Socialization obout

BMT lecturing to community was done in the form of education

about how to borrow money to BMT, what are the requirement, and

so on.31

To this day there has been no form of socialization BMT in

an attempt to minimize the practice of money lenders in the

market place where the BMT existed. BMT has never done

socialization to the dealer or lender about the prohibition of

usury or interest. Instead they have repeatedly perform the

pilgrimage. They themselves do not recognize that the business is

usury. Instead, they get angry when called moneylenders.

Justification of this business is their intention that just to

help traders who has trouble in the capital problem. According to

Kasmawati, chairman of Julo-julo at Pasar Raya Padang, he walked

around the market, the money that she spinned from bank, it has

30 Arnalis, Trader, Interviews, Padang, July 25, 2012.31 Syafri Muluk, Trader, Customer BMT, Interviews, Padang, August 1,

2012

also interest to be paid, so that ‘s why there are also interest

or “balanjo”.32

3. Role BMT in Liberating Society from the moneylender.

Generally, small traders or street lack shortage of

capital to run the business, also to fulfill their daily needs.

While, to obtain loans from formal financial institutions such as

banks is very difficult. Furthermore small traders are generally

not able to provide guarantees for lending purposes. As a

shortcut, mostly small traders in traditional markets as clients

of moneylenders. Reason to lending capital to moneylenders

among traders are "forced" to even though interest rates higher.

This activity takes place continuously until finally they become

dependent. However, most merchant user of moneylenders service in

the city of Padang claimed that they do not too unduly

disadvantaged by the presence of moneylenders.

The methods employed by chairman of Julo-julo in attracting

customers is creative enough, by offering an easy and fast

procedure without any requirement to make traders more enjoy it

despite high interest loans. They snare traders just based on

trust, so that when need money for capital and urgent need any

merchant immediately apply for a loan to the lender, although

according to them money Julo-julo Tembak is hot, not a blessing,

and so on. This is the phenomena in society of region that make

religion as power of community development with indigenous

32 Kasmawati, Chairman of Julo-julo, Interviews, Padang, July 21, 2012.

philosophy adat basandi Syarak Syarak basandi kitabullah, there are still

many who do not apply the knowledge of the prohibition of usury.

In general, street vendors in traditional markets used the

services of moneylenders in tackling the problem of their

capital. From the number of traders in the market Bandar buat,

according Fazat Rafiah, 70% use the services Julo-julo Tembak. After

BMT existed, there is about 40% can escape from a moneylender

with became BMT customer. Although they back and forth to Julo-

julo Tembak and to BMT, even doubling them. BMT efforts done in

freeing people from moneylenders is by offering financing with

the requirements and the procedures which is not like banking

standards.33

The traders needs is to get quick funds without the

requirements and easy procedures. While by moneylenders can meet

all the requirements and without any guarantee, so traders more

enjoy to Jolo-julo than BMT, although interest on the moneylenders

is much higher than the margin financing at BMT. That‘s why,

defeated by moneylenders. However, BMT still need to be careful

to apply the principle of financing. For BMT, financing analysis

needs to be done. BMT always try to speed up the financing

process. this is the weakness of BMT that can not provide the

funds immediately, because BMT need to do and through the

financing process correctly.34

33 Fazat Rafiah, Chairman of BMT Taqwa Muhammadiyah Pasar Bandar Buat,Interviews, August 1, 2012

34 Ismail, Director of BMT Taqwa Muhammadiyah, Interviews, Padang, July25, 2012.

From the fact, it can be concluded that BMT has not play a

significant role yet in freeing people from the bondage of

moneylenders. Not maximal effort performed BMT in freeing society

from the loan shark that they tend to be more proactive in

offering their services to merchants, it was evidenced by the

many traders who prefer to relate to the moneylenders.

It was also caused by the socialization have not been

widening up about the existence and function of BMT as Islamic

microfinance institutions in the community, especially to all

traders who are in the market where BMT located. According to

Juliar a trader in Pasar Siteba Padang she never propose a

financing to BMT, because they do not know the process and the

procedures, in addition, it also takes time to manage it. So that

these traders prefer to take Julo-julo because the process of

getting funds quickly and it does not need any requirement.35

Not maximal BMT Taqwa Muhammadiyah in freeing people from

moneylenders can be seen from the imbalance between the number of

existing savers with the number of customers who receive

financing. This showssuggests that BMT only used to save fund,

while the people who receive funding until July 2012 very little,

as shown in the table below.

Table 1

Number Customer Funding and Financing At Taqwa BMT Muhammadiyah

Padang

35  Juliar and Jawanis, Traders, Interviews, Padang, July 22, 2012.

BMT Taqwa

Muhammadiyah

Customer

Funding

Customer

FinancingPasar Raya 4814 person 296 personPasar Bandar Buat 2635 person 173 personPasar Lubuk Buaya 1509 person 201 personPasar Siteba 1001 person 148 person

Source: BMT Taqwa Muhammadiyah in 2012

Based on this fact we can conclude BMT effort in hold the

task as Islamic microfinance institutions that play a role in

freeing the people from the economic practice of usury is not

maximized. BMT has not been proactive in meeting the needs of

merchants who have difficulty in the problem of capital. BMT

defeated quickly in offering services and products to merchants

in effort to minimize the bondage of moneylenders to the

merchant. On the other hand, the moneylenders are more proactive

in offering services to merchants who was difficulties of

capital. The moneylenders walk around the market as "mobile

banks", because they know exactly what is needed trader .

BMT concepts as Islamic mikrofinance institution, is the

concept of managing the funds at the lowest level of the

community is especially small traders. This activity aims to help

small merchants by providing financing in order to expand their

businesses and release the public from dependence on the

moneylenders.

To achieve that, BMT make breakthrough by 1) Active

sosialization in the community about the importance of the

Islamic economic system. 2) Provide the easeness of the process

and requirements of financing to customers in accordance with the

feasibility assessment. 3) Strengthening the institutions BMT

with character "pick up the ball". Not only easyness of the

requirements and procedures, fast service, sharia based

operations, but also the system "proactive" applied by BMT

managers should be added value for BMT which makes this Islamic

micro institutions can compensate and minimize the influence of

moneylenders in the community. System "pick up the ball" which

become BMT character is a strength that makes it closer to the

society. So that society could prefer to relate with BMT than to

moneylenders.

Ideally with this power, the movement toward liberation of

society from the bondage of moneylenders, usury and the crush of

poverty can be achieved. So that the movement towards economic

development of small communities which has equitable, justice,

and prosperous realized well. Islamic economics aims to improve

the life of the community in a fair and balanced. With this

foundation of all parties involved in the economic process will

not oppress or exploit each other. Moral values for the

fundamental part of economic activity. This is what to say by

changing the economic system and subordinate eksploitattif be

equitable economic system. Changing economic systems that contain

exploitative usury (zulm) be a fair economic system, which

contains a balance between the rich and the poor, who have less

capital with or without capital.

Through Islamic economic system the accumulation of wealth

by a group of people can be avoided, further distribution wealth

to the weak public can be done automatically. Through joint

freedom, the Islamic economic system provides opportunities and

equal access to everyone. Individual ownership is protected,

balanced with a sense of responsibility and a moral foundation

set up to be fair and balanced with no self-interest and ignore

others. All individuals have the opportunity and equal

opportunity to try and allocate its revenue efficiently without

disturbing the balance of the economy. Superiority of Islamic

economic system lies in the extent of harmony and balance can be

made between material and spiritual needs, social needs and

interests individual.

E. Conclusion

Although BMT Taqwa Muhamaddiyah who took traditional market

base in the city of Padang has been long established, people to

this day still use the services of moneylenders in overcoming

their capital problem. This is because: First, the need for

business capital and other urgent needs. Second, the loan process

is fast, easy procedure, and relatively short repayment period.

Third, the difficulty of accessing financial institutions

including BMT. Fourth, the lack of socialization of the BMT.

Fifth, lack of awareness on the issue of religious teaching in

practice usury prohibition.

Meanwhile, BMT Taqwa Muhammadiyah as Islamic Microfinance

Institutions whose mission is to free people from economic usury

does not show significant role yet, because these institutions

are not being proactive in meeting the needs of small traders

toward their capital. This is evidenced by still a small number

of traders who obtained financing from the Islamic microfinance

institutions. So that, the traders who existed in the market

where BMT Taqwa Muhammadiyah be based prefer to use moneylenders

service in overcoming their capital problems. Its expected to the

more management of BMT to be proactive in meeting the needs of

society in terms of capitalization, so that dependence on

moneylenders can be minimized. To the missionaries are expected

to more often give enlightenment and awareness to the community

about the unlawfulness ribawi economy. To government, its expect

to provide facilities for small traders to access loans.

Bibliografi

Arifin, Zainul, Dasar-dasar Manajemen Bank Syariah, Jakarta: Alvabet,

2002

al-Baihaqi, Abu Bakar Ahmad ibn al-Husain ibn Ali, Sunan al-Baihaqi,

Tp. Majelis Dairah al-Maarif al-Nizhamiyah al-Kainah, 1344 H

http://www.pikiranrakyat.com/cetak/2005/1005/09/hikmah/

manajemen.html, 17 Agustus 2006

al-Juzairi, Abdurrahman, al-Fiqh Ala Mazahib al-Arba’ah, Juz III, Mesir:

al-Maktabah al-Tijariyah al-Kubra, 1969

Haludin, Helmi, “Membangkit Kearifan Lokal dalam Pemberdayaan

Ekonomi Syariah, Paper presented at the Governing Council

Seminar Silakda and Indonesian Intellectuals Association

(ICMI) Regional Organization of Padang , Padang April 28,

2012

PINBUK, Pedoman Cara Pembentukan BMT Balai Usaha Mandiri Terpadu, Jakarta:

PINBUK, t,t

Sabiq, Sayyid, Fiqh as-Sunnah, Juz III, Libanon: Dar al-Fikr, 1983

Sudarsono, Heri, Bank dan Lembaga Keuangan Syari’ah, Jakarta: Kampus

Fakultas Ekonomi UUI, 2003

Pusat Pembinaan dan Pengembangan Bahasa Indonesia, Kamus Besar

Bahasa Indonesia, Jakarta: Balai Pustaka, 1990