Small-scale business ignore Islamic bank edict
Small-scale business ignore Islamic bank edict
M. Taufiqurrahman, The Jakarta Post, Jakarta
Some small-scale businesspeople expressed on Thursday
indifference to the proposed Indonesian Ulemas Council (MUI)
edict that prohibits bank interest, saying such an instruction
might hamper business.
Rubiono, who runs a shop selling wooden window and door frames
on Jl. Pejompongan in Central Jakarta, said what really mattered
most for businesspeople like him was easy access to funds,
regardless of the interest applied by either banks, pawn houses
or cooperatives.
"Most of the shop owners here are devout Muslims, yet they
obtain credit with a monthly interest of 25 percent from local
cooperatives and we don't feel sinful about it," Rubiono, who has
been on the haj pilgrimage, told The Jakarta Post.
"God knows we run a decent and fair business to earn a living
for our children," he added.
Despite the high interest rate, he said, the cooperatives
provide easier access to obtain loans compared to conventional
banks or its sharia units that apply redundant procedures.
He added he had not been able to obtain a loan from sharia
banks although he had submitted many proposals to them.
On Tuesday, MUI's Edict Commission announced a prohibition on
the payment of interest on deposits and loans involving financial
institutions such as banks, insurance companies, pawnbrokers and
cooperatives, declaring it as riba (usury), which is forbidden
under Islamic law.
The proposed edict, although non-binding, has sparked
criticism, with bankers saying the ban could hurt the banking
sector.
The commission also called on Muslims to use sharia banks.
Some analysts accused executives of sharia banks of having a hand
in cooking up the edict.
Muslim businesswoman Ika Kartika, who runs 13 textile shops in
Tanah Abang textile market, Central Jakarta, said she saved money
in conventional banks, because of the security offered and not
for the interest.
"It is simply because the banks take care of my money in the
safest possible way," she told the Post.
She said that it should be up to Muslim bank customers to
decide whether they would use the service of conventional or
sharia banks.
"Those who consider the interest applied by conventional banks
unlawful according to Islamic teachings can always go to sharia
banks," she said.
To help boost her textile business after a fire that had
ravaged the market earlier this year, she took out a Rp 800
million (US$94,000) loan from a state-owned bank without having
to go through complicated procedures.