Assessing Institutional Health and Sharia Compliance of BMT Itqan: A Case Study Using Regulatory Credit-Scoring

Abstract

This study assesses the institutional health and Sharia compliance of Baitul Maal wat Tamwil (BMT) Itqan, a community-based Islamic microfinance institution in Bandung, Indonesia. Employing a qualitative descriptive approach through document analysis and a semi-structured interview conducted on 6 May 2025, the study evaluates six dimensions: general management, institutional structure, capital, asset quality, liquidity, and Sharia compliance. The assessment framework follows the credit-scoring model set out in Regulation No. 7/Per/Dep.6/IV/2016 issued by the Ministry of Cooperatives and SMEs. Results indicate that BMT Itqan achieved the “Good” category across all management, capital, asset, and liquidity dimensions, and was classified as “Compliant” in Sharia supervision, meeting 9 out of 10 indicators. However, limited Sharia literacy among members remains a critical issue that may affect governance quality and long-term sustainability. The findings highlight the importance of strengthening internal audit processes, optimising digital management information systems, and implementing systematic Sharia education programs for members. The study concludes with recommendations for policymakers and cooperative managers to integrate literacy enhancement and Sharia compliance mechanisms to sustain institutional health and strengthen public trust.