Challenges and Opportunities in Developing Microtakaful

Transcription

1. CHALLENGES AND OPPORTUNITIES IN DEVELOPING MICROTAKAFUL IN MUSLIM MAJORITY COUNTRY : A CASE STUDY OF INDONESIA 11th Harvard University Forum on Islamic Finance RADITYA SUKMANA, Ph.D The author is the head of master degree program in Islamic economics at Universitas Airlangga, Indonesia. momyadit@gmail.com And SUTAN EMIR HIDAYAT, Ph.D The author is an assistant Professor and academic advisor for Islamic finance at University College of Bahrain. sutan@ucb.edu.bh or st_emier@yahoo.com.       
2. Challenges And Opportunities In Developing Microtakaful Presentation Outlines •  •  •  •  Introduction Structure and Business Models of Microtakaful The Importance of MSME in Indonesia Challenges in Developing Microtakaful in Indonesia •  Opportunities in Developing Microtakaful in Indonesia •  Conclusion
3. Challenges And Opportunities In Developing Microtakaful Introduction •  Objec&veofIslamicfinanceàmaslahah(Hidayat,2010). •  Achieved?Theneedofthepoor? •  TheimportanceofIslamicmicrofinanceàsupportedby microtakaful •  Microinsuranceisposi&velycorrelatedtoeconomic growth(BackandWebb,2003;LimandHaberman, 2003;Erlbecketal,2011). •  Microtakafulworksverywellforthepoorpeoplein Indonesia(Erlbecketal,2011) •  MicrotakafulinIndonesiaiss&lllessdeveloped(Ingram andMcCord,2011).
4. Challenges And Opportunities In Developing Microtakaful Objectives of the Study •  This paper aims to provide the challenges and opportunities in developing Microtakaful in Indonesia •  Library study based method is adopted. It is a kind of qualitative research approach.
5. Map of Indonesia (Bank Indonesia, 2013; Indonesian Statistical bureau, 2013) : 1.  TotalPopula&on230 million(2011) 2.  Five biggest islands: 1.  JAVA 2.  KALIMANTAN 3.  SUMATERA 4.  SULAWESI 5.  PAPUA 3.  MemberofG20 4.  %muslim=85% 5.  Biggesteconomyinthe Muslimworld 6.  Exchangerate(Rupiah-Rp) USD1=Rp11.000 5
6. StructureandBusinessModelsof Microtakaful •  Microtakaful business models are the same as Takaful business models (Haryadi,2007;Erlbecketal,2011;Khan,2011;Barwari;2012). Aspects Wakala Mudarabawith suplussharing Mudaraba withoutsurplus sharing Hybrid Waqf Takafuloperator's shareininvestment profits Feeasapercentage oftotalinvestments Profitshare Profitshare Profitshare Feeasapercentage oftotalinvestments Takafuloperator's shareinunderwriBng surplus Notavailable Profitshare Notavailable Profitshare Notavailable OperaBngexpenses Borneby shareholderswhich arecompensatedby upfrontchargeof wakalafees Borneby shareholdersandno fees Borneby policyholdersand chargedatyear end Bornebyshareholders whicharecompensated byupfrontchargeof wakalafees Borneby shareholderswhich arecompensatedby upfrontchargeof wakalafees
7. TheImportanceofMSMEinIndonesia (MinistryofCoopera&onwww.depkop.go.id,retrieved2012) No   1 2 3 4     1 2 3 4     1 2 3 4   Indicator Numbers of Unit MSMEs Micro Small Medium   Number of Labor MSMEs Micro Small Medium   Contribution to GDP MSMEs Micro Small Medium   Unit Unit Unit Unit Unit Unit   Person (unit) Person Person Person Person   Rp Billion Rp Billion Rp Billion Rp Billion Rp Billion   Year 2010 Numbers 53,823,732 53,207,500 573,601 42,631   Numbers 99,401,775 93,014,759 3,627,164 2,759,852   Numbers 3,466,393.3 2,051,878 597,770.2 826,745.1     Share 99.99 98.85 1.07 0.08   Share 97.22 90.98 3.55 2.7   Share 57.12 33.81 9.85 13.46  
8. Challenges in Developing Microtakaful in Indonesia (Ascarya and Yumanita, 2005; Rosengard, 2007; Ingram et al, 2011; Ernst & Young, 2013; Hidayat, 2013b; Ya’u, 2013) •  Regulation –  No mandatory policy (Motor Vehicle Accident and Health Insurance Policies) •  Awareness of the microtakaful –  Less awareness on the existence of microtakaful •  Human resources –  Difficulties for microtakaful providers to get the best talent.
9. OpportuniBesinDevelopingMicrotakaful inIndonesia (Siebel,2008;Patel,2008;Nugroho,2009 •  Economicgrowth ;Bhacy,2011;BankIndonesia,2012;Ernst& Young,2013) –  2013(5.8%) –  Moredomes;cdemand •  Popula;on –  Rank4th(237Million)intheworldaEerChina,IndiaandUSA –  60%ofthepopula;on(around140million)isintheproduc;ve age(15to54yearsold) •  NumberofMusliminIndonesia –  85%isMuslim –  MostlyinwesternpartofIndonesia •  ThegrowthofIslamicbankingandfinanceIndustry –  30%growthannually –  >60%financingisgiventoMSME
10. Conclusion •  Being the largest Muslim country, Indonesia has opportunities to develop microtakaful industry. •  However, there are certain challenges that must be overcome.
11. Challenges And Opportunities In Developing Microtakaful THANK YOU
12. Challenges And Opportunities In Developing Microtakaful Definition of the MSMEs Table 8 .3 (Based on the interiew by IMFI practitioner No Classification Range of given financing 1 Super micro Less than USD 100 2 Micro USD 100 - USD 500 3 Small USD 500 – 5000 4 Medium USD 5000 – USD 20,000 12