Settlement Of Disputes For The Financing Of Micro Finance Financing (Dispute Study In Baitul Maal Wat Tamwil (BMT) Medan City)

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Settlement of Financing Agreement Disputes at Micro Finance Institutions: Case Study of Baitul Maal Wat Tamwil (BMT) Medan City

Introduction

In the realm of micro finance institutions, disputes arising from financing agreements can be a significant challenge. Baitul Maal Wat Tamwil (BMT) is one of the non-bank financial institutions that focuses on economic activities of small entrepreneurs, adhering to the principles of sharia and cooperatives. As a cooperative-based institution, BMT is governed by the Cooperative Legal Umbrella, which includes the Work Guidelines, Health Assessment, and BMT Statutes/Bylaws (AD/ART) as per Law No. 25 of 1992 concerning Cooperatives. In Medan, there are 50 BMT operating, as per data from the North Sumatra Business Incubation Center and Small Business (Pinbuk) in 2010. This study aims to reveal the legal provisions governing the settlement of financing agreement disputes in BMT, analyzing alternative forms of dispute resolution, and how to apply it in the field.

Background of the Study

BMT is a crucial institution in the economic activities of small entrepreneurs, and its operations are governed by the principles of sharia and cooperatives. The Cooperative Legal Umbrella provides a framework for BMT's operations, including the Work Guidelines, Health Assessment, and BMT Statutes/Bylaws (AD/ART). However, disputes arising from financing agreements can be a significant challenge for BMT. In Medan, there are 50 BMT operating, and it is essential to ensure that these institutions have a clear understanding of the legal provisions governing dispute resolution.

Methodology

This study uses primary data obtained from the field, reinforced by secondary data. Data analysis is carried out qualitatively with steps: data classification, data translation, conclusions, and verification. The selection of the research location sample was carried out by purposive sampling technique, aiming to get a representative sample.

Results

The results of this study showed that there are two legal provisions governing dispute resolution in micro financial institutions:

  1. Law No. 50 of 2009 concerning the Second Amendment to Law No. 7 of 1989 concerning Religious Courts.
  2. Law No. 30 of 1999 concerning Arbitration and Alternative Dispute Resolution.

These two laws provide a framework for dispute resolution in micro financial institutions, including BMT. The study also found that two options for resolving Islamic economic disputes can be taken, namely through a litigation process in court or non-litigation (arbitration and alternative dispute resolution). In practice, the completion of the financing contract dispute in BMT is generally carried out through family deliberations and friendship. Legal channels are rarely taken by BMT in resolving disputes, and Basyarnas (National Sharia Arbitration Agency) is also not the first choice, due to the lack of understanding of BMT regarding the existence and function of this institution.

Discussion

The results of this study highlight the importance of understanding the legal provisions governing dispute resolution in micro financial institutions. BMT micro financial institutions should choose Basyarnas as a legal choice in completing financing contract disputes, aiming to achieve legal certainty based on Islamic economics. In addition, it is necessary to socialize the existence, role, and function of Basyarnas as a dispute resolution institution in Islamic economic institutions. This will help BMT understand the important role of Basyarnas in realizing legal certainty in the sharia economic sector.

Conclusion

In conclusion, this study highlights the importance of understanding the legal provisions governing dispute resolution in micro financial institutions. BMT micro financial institutions should choose Basyarnas as a legal choice in completing financing contract disputes, aiming to achieve legal certainty based on Islamic economics. The right socialization will help BMT understand the important role of Basyarnas in realizing legal certainty in the sharia economic sector.

Recommendations

Based on the results of this study, the following recommendations are made:

  1. BMT micro financial institutions should choose Basyarnas as a legal choice in completing financing contract disputes.
  2. It is necessary to socialize the existence, role, and function of Basyarnas as a dispute resolution institution in Islamic economic institutions.
  3. BMT should understand the important role of Basyarnas in realizing legal certainty in the sharia economic sector.

Limitations of the Study

This study has several limitations, including:

  1. The study only focuses on BMT micro financial institutions in Medan.
  2. The study only analyzes the legal provisions governing dispute resolution in micro financial institutions.
  3. The study does not provide a comprehensive analysis of the dispute resolution process in BMT micro financial institutions.

Future Research Directions

Future research should focus on the following areas:

  1. A comprehensive analysis of the dispute resolution process in BMT micro financial institutions.
  2. An analysis of the effectiveness of Basyarnas as a dispute resolution institution in Islamic economic institutions.
  3. An analysis of the impact of Basyarnas on the sharia economic sector.

References

  1. Law No. 50 of 2009 concerning the Second Amendment to Law No. 7 of 1989 concerning Religious Courts.
  2. Law No. 30 of 1999 concerning Arbitration and Alternative Dispute Resolution.
  3. Basyarnas (National Sharia Arbitration Agency).

Appendices

  1. Appendix 1: Research Methodology
  2. Appendix 2: Data Analysis
  3. Appendix 3: Results

Note: The references and appendices are not included in the content, but they should be included in the actual study.
Frequently Asked Questions (FAQs) about Settlement of Financing Agreement Disputes at Micro Finance Institutions: Case Study of Baitul Maal Wat Tamwil (BMT) Medan City

Q: What is Baitul Maal Wat Tamwil (BMT) and how does it operate?

A: BMT is a non-bank financial institution that focuses on economic activities of small entrepreneurs, adhering to the principles of sharia and cooperatives. It is governed by the Cooperative Legal Umbrella, which includes the Work Guidelines, Health Assessment, and BMT Statutes/Bylaws (AD/ART) as per Law No. 25 of 1992 concerning Cooperatives.

Q: What are the common disputes that arise in BMT micro finance institutions?

A: The common disputes that arise in BMT micro finance institutions include disputes related to financing agreements, such as disputes over loan repayment, interest rates, and contract terms.

Q: What are the legal provisions governing dispute resolution in micro finance institutions?

A: The legal provisions governing dispute resolution in micro finance institutions include Law No. 50 of 2009 concerning the Second Amendment to Law No. 7 of 1989 concerning Religious Courts and Law No. 30 of 1999 concerning Arbitration and Alternative Dispute Resolution.

Q: What are the options for resolving Islamic economic disputes?

A: The options for resolving Islamic economic disputes include litigation in court and non-litigation (arbitration and alternative dispute resolution).

Q: Why is Basyarnas (National Sharia Arbitration Agency) not the first choice for BMT micro finance institutions?

A: Basyarnas is not the first choice for BMT micro finance institutions because of the lack of understanding of BMT regarding the existence and function of this institution.

Q: What is the recommendation for BMT micro finance institutions in resolving disputes?

A: The recommendation for BMT micro finance institutions is to choose Basyarnas as a legal choice in completing financing contract disputes, aiming to achieve legal certainty based on Islamic economics.

Q: Why is socialization of Basyarnas important?

A: Socialization of Basyarnas is important because it will help BMT understand the important role of Basyarnas in realizing legal certainty in the sharia economic sector.

Q: What are the limitations of this study?

A: The limitations of this study include the focus on BMT micro finance institutions in Medan, the analysis of only the legal provisions governing dispute resolution, and the lack of comprehensive analysis of the dispute resolution process in BMT micro finance institutions.

Q: What are the future research directions?

A: The future research directions include a comprehensive analysis of the dispute resolution process in BMT micro finance institutions, an analysis of the effectiveness of Basyarnas as a dispute resolution institution in Islamic economic institutions, and an analysis of the impact of Basyarnas on the sharia economic sector.

Q: What are the implications of this study for BMT micro finance institutions?

A: The implications of this study for BMT micro finance institutions are to choose Basyarnas as a legal choice in completing financing contract disputes, aiming to achieve legal certainty based on Islamic economics, and to socialize the existence, role, and function of Basyarnas as a dispute resolution institution in Islamic economic institutions.

Q: What are the implications of this study for the sharia economic sector?

A: The implications of this study for the sharia economic sector are to promote the use of Basyarnas as a dispute resolution institution, to increase the understanding of Basyarnas among BMT micro finance institutions, and to promote the development of the sharia economic sector.

Q: What are the implications of this study for the Indonesian government?

A: The implications of this study for the Indonesian government are to promote the development of the sharia economic sector, to increase the understanding of Basyarnas among BMT micro finance institutions, and to promote the use of Basyarnas as a dispute resolution institution.

Q: What are the implications of this study for the international community?

A: The implications of this study for the international community are to promote the development of the sharia economic sector, to increase the understanding of Basyarnas among BMT micro finance institutions, and to promote the use of Basyarnas as a dispute resolution institution.

Note: The FAQs are not exhaustive, but they cover some of the most common questions related to the topic.