Analysis of Sharia Microfinance Institution Behavior from the Maqasid al-Shariah Perspective

Abstract

Islamic microfinance institutions (IMFIs) are expected to expand financial inclusion while simultaneously promoting justice, welfare, and ethical conduct. Their performance therefore cannot be assessed solely through profitability or outreach; it must also be evaluated according to the objectives of Islamic law (maqasid al-shariah). This study analyzes the behavior of sharia microfinance institutions in Bandung through the five essential dimensions of maqasid al-shariah: protection of religion (hifz al-din), life (hifz al-nafs), intellect (hifz al-'aql), progeny (hifz al-nasl), and wealth (hifz al-mal). A qualitative descriptive case-study approach was employed using literature review, field observation, in-depth interviews with relevant stakeholders, and document analysis. Data were interpreted through content and thematic analysis, with triangulation used to strengthen credibility. The findings indicate that sharia compliance mechanisms, financial education, customer protection, family-oriented empowerment, and transparent asset management are central expressions of maqasid within microfinance practice. Nevertheless, implementation remains uneven because of limited maqasid literacy, human-resource capacity, pressures for financial sustainability, and differences in internal sharia governance. The study argues that IMFIs need to move beyond formal contract compliance toward an outcome-oriented model that integrates social impact, customer capability, family welfare, and responsible financing. A maqasid-based operational framework can strengthen both the legitimacy and developmental contribution of Islamic microfinance.