Accountability and governance practices in Islamic microfinance institutions : evidence from Indonesia

Handayani, Wuri

Business
March 2015

Thesis or dissertation


Rights
© 2015 Wuri Handayani. All rights reserved. No part of this publication may be reproduced without the written permission of the copyright holder.
Abstract

This thesis presents an explanatory analysis of the accountability and governance practices within Islamic microfinance institutions in Indonesia, adopting Bourdieu’s theory of practice with the triad of concepts of field, capital and habitus. This study is based on the argument that accountability and governance are socially and subjectively constructed through internal and external mechanisms. The internal mechanism includes the organisational history and its culture, while the external factor is the context in which the organisation operates.

The concept of field is a guide to achieving the first research objective in examining the historical development of the Islamic microfinance sector in Indonesia. The changes and developments within the field are the external factors that affect the construction of accountability and governance practices within selected Islamic microfinance institutions in Indonesia (IIMFIs). The historical research method is deemed the most appropriate to provide a narrative history of the development of the field. This was done by interviewing and analysing the secondary data of journal research relating to Indonesia’s socio-political situation over the period, the initiative on microfinance services, the Islamic resurgence movement and the financial reforms. The findings demonstrate that the development of the Islamic microfinance sector is inseparable from the socio-economic and political situation in Indonesia. Therefore, the field of Islamic microfinance is dynamic rather than static: it changes and develops over time.

Furthermore, the concept of capital and habitus helps to achieve the second research objective, to examine the construction and re-construction of accountability and governance within selected IMFIs in Indonesia: BMT A and BTM B. The internal factors of the growth of various types of capital (economic, culture, social and symbolic), imbued by the organisational habitus, constructed the accountability and governance practices. Such practices are developed over the period corresponding to the different stages of organisational growth. Both institutions have evolved from small pilot projects into two of the biggest IIMFIs in Indonesia by developing their own mechanisms of accountability and governance to ensure their capability to continue their operations in the future.

This study offers a unique lens for exploring, in a specific context, the construction of accountability and governance practices, the dynamic aspects of which traditional governance theories are unable to explain.

Publisher
Business School, The University of Hull
Supervisor
Haniffa, Ros
Sponsor (Organisation)
World Bank
Qualification level
Doctoral
Qualification name
PhD
Language
English
Extent
3 MB
Identifier
hull:16433
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