Incidencia de la comunicación en la imagen interna

The process through which BMTs are established resembles that of conventional cooperatives and includes several stages and administrative procedures. At the initial stage, the founder's role and commitment are critical, as they will determine the success of the new BMT. For more detail, the following diagram describes the process through which BMTs are established:

Figure 4.2: The Process of BMT establishment

(Source: Aziz, 2006, p.10)

Sequentially, BMTs must go through the following stages:

1) A group of initiators (Muslim leaders, entrepreneurs, teachers, and other influential people) commit to the BMT establishment.

2) The initiators disseminate the idea of BMT creation to community leaders and prominent social leaders. This may involve village officials and administrators, as well as activists with Islamic mass organizations, religious educational institutions, charitable organizations, ICMI, MUI, Indonesian Mosque Council, Islamic Religious Counselors, Young Da'i (Islamic propagators), Islamic social organizations, local NGOs, and benefactors. 3) After disseminating the idea of BMT development, the initiators create a

small committee for BMT establishment. The core committee consists of three to five persons who are willing to dedicate the time and energy necessary for BMT establishment. It consists of a chairman, secretary, and treasurer, and has several tasks, including: a) extending support and ensuring the involvement of at least twenty local figures. The small committee and

Initiatorsand steering committee

Community leaders and prominent member of society

Founding committee Capital stimulant Initiator support Formation of management Initial capital Potential BMT management

Training and Internship Preparation for

operational (Infrastructure, cooperation legal entity)

BMT start to operate PINBUK or local

cooperative department

founders subsequently define an Anggaran Dasar (Articles of Association, AD) and Anggaran Rumah Tangga (Bylaws, ART),the vision, mission, and objectives of the proposed institution, as well as its standard operating procedures (SOP). b) Collecting initial capital and donations from Islamic organizations, mosques, and other philanthropists. c) Raising funds in the form of mandatory savings, principal savings, and special principal savings. In this model, BMT founders provide capital of IDR 500,000 to IDR 1 million or more. This may be paid at the beginning of each month or in installments. In urban communities, a minimum of IDR 20–35 million is necessary to establish a BMT; in rural areas, the amount is between IDR 10– 20 million.

4) The founders create a board, including a manager and staff, who are responsible for the daily operations of BMT. These individuals must participate in training and internship at a local PINBUK or the Department of Cooperatives and SMEs. The founders and the board prepare for operations by preparing an office building as well as supporting infrastructure, equipment, and essential office supplies; they also seek legal recognition of their BMT.

5) The BMT is ready to operate and receives an operational certificate from the local PINBUK.

6) Once a BMT has assets of IDR 75 million, it can request the legal status of "Islamic Cooperative" from the regional Department of Cooperatives and SMEs.

According to Article 25 of Law No. 22 of 1992 on cooperatives, an Annual General Meeting (AGM) is the structure with the highest authority in a cooperative. As such, for operations the AGM delegates authority to the management of the cooperative. To guarantee professional performance, the board appoints a manager to handle everyday business activities. BMTs that have the legal status of cooperative have an organizational structure as follows:

Manager

Annual General Meeting

Management (Chairman, secretary

& treasurer Sharia supervisory board

Internal control system Management supervisory board Baitul Tamwil Clients Staff Beneficiary Marketing

division Teller Accounting

Baitul Maal

Figure 4.3: Organizational Structure of BMT

(Source: Azis, 2006, p.19; Nazirwan, 2015, p.178; fieldwork, 2017)

As can be observed from Figure 4.3, BMTs have a relatively simple organizational structure that nonetheless embrace a modern organizational concept, with a clear division between governance, management, and operational functions. The AGM is an annual meeting that is attended by the founders and representatives of members. Usually, it makes such critical decisions as approving or rejecting the yearly financial report, the disbursement of dividends, and the appointment of management and supervisory board members. The AMG also appoints sharia

supervisory boards that oversee the business activities of BMT and ensure that these activities are in-line with sharia principles. It also provides advice to the management, managers, and financial supervisors related to the sharia aspects of finance and reviews the financial products and services offered by the BMT. In addition, the AMG selects a supervisory board to oversee the implementation of the

BMT's operational principles.

Each BMT is governed by a management board, which is responsible for supervising and controlling the activities of the BMT, including its daily operations. Another principal responsibility of this board is to provide general directions and policy recommendations to the managers. To monitor the BMT's performance, the board regularly meets with BMT manager. At the AMG, it publishes and presents its annual management report. Under this board is a manager or director who supervises the BMT's daily operations and, more importantly, is responsible for balancing the baitul tamwil and baitul maal divisions.

In running the BMT's operations, the manager is supported by at least three functional staff. First, marketing is the primary profit-making unit, responsible for selling and marketing the BMT's savings and financing products. Marketing staff also conduct client screening, financing analysis, collections, and non-performing loan management. Second, there is at least one teller, who is in charge of handling cash transactions and serving clients or members. Third is the accounting staff, who are responsible for bookkeeping, reporting, and general administrative functions.