Founded by Youth to Combat Economic Crisis
BMT Fastabiq was set up in the Pati Regency in 1998. Following the monetary crisis in 1998, the youth leaders of a local Muslim organization were motivated to collect and distribute alms funds to the needy. In the beginning, they only managed the distribution of baitulmaal (social funds), including zakat (obligatory charity), infaq (charitable spending), shodaqoh (charity), and wakaf (charitable endowments of property) funds (ZISWAF) collected from the local community leaders. The management then decided to use the large amount of collected funds for community development programs and to provide financing to small traders. They invested the funds and used the return for the community’s economic development.
Prioritizing Essential Needs
The management devised a unique approach to utilize the maal (social) funds – the approach prioritized the fulfillment of six main human needs - physical, intellectual, religious, family, social and material. As an initial step, BMT Fastabiq focused on strengthening the quality of their employees who could effectively manage social funds (zakat, alms, and endowment funds) with a socio-entrepreneurship skill (i.e. a combination of economic and social entrepreneurship). Fastabiq trained their employees to become preachers to socialize their model throughout the community.
In the second step, BMT Fastabiq established a childhood education program (Fastabiq Ceria) to improve the level of educational development of employees' families. Gradually, they established seven different programs such as human resource development program (Fastabiq Institute), basic health services (Fastabiq Pratama), public hospitals (Fastabiq Sehat PKU Muhammadiyah Hospital), local retailers (Fastabiq Mart), small-scale retailers (Bedah Kios), and Islamic residence (Fastabiq Residence).
Hiring the Best: Every Employee Is a 'Preacher'
Fastabiq undertakes a rigorous employee recruitment process since every employee must meet the criteria to be recognized as a "preacher". They provide in-house training and on-the-job training for one month, to enable employees to adapt to their vision and become a preacher cum socio-entrepreneur.
Fastabiq came to be recognized as a da’wah (call towards religious teachings) institution managed by individuals who are committed to the teachings of the religion and to their professional work. The company also has a policy to encourage its staff to contribute to social funds, employing the lead-by-example principle.
Award Winning Results Helping the Poor
BMT Fastabiq focuses mainly on the poor traders operating in Pati Regency, Central Java. The BMT engaged in a rigorous competition with the local loan sharks. BMT Fastabiq focused on establishing closeness to the traders and taking them on as members. BMT Fastabiq has been acclaimed as a successful cooperative and won many awards for their tireless work driving the loan sharks out by providing a viable alternative.
Effectiveness of BMT Fastabiq
The BMT has delivered strong financial results, with financing balance increasing from IDR 134 billion in 2017 to IDR 160 billion in 2018. Fastabiq’s social performance appears to be superior to its financial performance. Many staff and members are females as it operates mainly in traditional markets with most of the female traders. Their average financing per borrowers is IDR 29.28 million, higher than that of other BMTs.
Varieties of Products
This BMT offers two types of savings products - saving accounts and time deposit accounts. There is one product saving account, namely a general saving account (SIRELA), which offers profit-sharing based on a daily average balance system. The time deposit consists of two products, namely time deposit for health services and time deposit for sacrificial worship.
Financing products are packaged in accordance with the contract used and adjusted to meet the requirements of members. They commonly use mudarabah (cost-plus financing), ijarah (lease) and murabaha (profit sharing) contracts.
Fastabiq’s baitul maal products comprise of social activities and real sector maal programs. Social programs focus on the provision of basic necessities to the community. Whereas, the real sector maal program set up businesses as wakaf property using funds from zakat, infaq and wakaf. BMT Fastabiq provides managerial oversight to help these businesses grow. Once the business breaks even, BMT Fastabiq offers services through tamwil (commercial) division, if required.
This model has proved to be the backbone of BMT Fastabiq’s success. Their service model attempts to channel tamwil (commercial finance) through maal (social finance) that empowers the poor.
Fastabiq’s model has contributed towards building a trust factor around the brand name. The emphasis on religious practices and focus on delivering through well trained and religiously conscious employees, has helped the BMT gain the loyalty of its members. They also use the same brand equity to compete against the loan sharks who can offer quicker service or banks who can offer higher returns.