Micro Waqf Bank : Combination of Microfinance and Community Development in Islamic Finance

This study aims to unveil the business processes, the business characteristics, and the benefits of the empowerment programs by Islamic Microfinance Institutions with the model Micro Waqf Bank located in Jombang Regency, East Java Province. The method used in this study is in-depth interviews, observations, and documentation conducted at Bank Wakaf Mikro Tebuireng Mitra Sejahtera, Bank Wakaf Mikro Denanyar Sumber Barokah, and Bank Wakaf Mikro Bahrul Ulum Barokah Sejahtera. These business entities are basically sharia microfinance institutions and incorporated as cooperative with the micro waqf as a marketing identity. This research compares and analysis the data from interviews with documentation and observations in the field and found interesting findings. Results show that although the business processes and characteristics of the business have in common with other cooperative lenders, the results of economic empowerment perceived by customers are strongly unique. Recipients of financing strongly benefited from the economic empowerment. These institutions are also benefited the surrounding community. The existence of these lending institutions under the pesantren improve the economic welfare of the surrounding community.