AGRICULTURAL BUSINESS DEVELOPMENT EFFORT THROUGH MUDHARABAH FINANCING

(Case Study of KSPPS BMT Sumber Barokah Mandiri Kediri)

Abstract

This study aims to identify and analyze the application of mudharabah financing in agricultural business development. Data collection includes observation, interviews and documentation. The results of this study indicate, First, in the application of mudharabah financing, the capital used by BMT (Islamic Microfinance Institution) Sumber Barokah Mandiri comes from member savings and BMT fundraising products with the profit sharing ratio between BMT and members is 60%: 40%. Second, mudharabah financing for agricultural business development, BMT finances 100% of all costs required by farmers (members) in agricultural business, ranging from land rental costs to harvest costs. Funds from BMT will be realized in the form of goods, except for service fees which are converted into money, according to the needs that have been previously proposed by the farmers. In this financing, both farmers and BMT will benefit equally, where farmers will not lose material because all costs are borne by the BMT, and on the other hand BMT can rotate capital for additional BMT business income while helping empower farmers.