A Comprehensive Analysis of Fraud in Cooperatives: An Integrative Anti-Fraud Model Based on Governance, Technology, Organizational Culture, and Islamic Business Ethics (Maqashid Shariah)

Abstract

Fraud is a serious threat that erodes the integrity, financial health, and sustainability of cooperatives as family-based microfinance institutions. This concern has intensified in Indonesia following a series of large-scale savings-and-loan cooperative default cases—most notably KSP Indosurya, with estimated losses reaching IDR106 trillion, and KSP Sejahtera Bersama, which harmed roughly 186,000 members with losses of IDR8.8 trillion—underscoring the weakness of governance and oversight in the national cooperative sector. This study aims to comprehensively analyze the characteristics, causal factors, and prevention, detection, and handling strategies of fraud in cooperatives, while developing an integrative anti-fraud model that combines conventional management perspectives with fiqh muamalah and maqashid shariah. The study employs a systematic literature review (SLR) following the protocols of Tranfield et al. (2003) and Keele (2007), searching Scopus, Web of Science, and Google Scholar for literature published between 2010 and 2025. The findings show that fraud in cooperatives can be explained in a complementary manner through the fraud triangle (Cressey, 1953), fraud diamond (Wolfe & Hermanson, 2004), and fraud pentagon (Crowe Horwath LLP, 2011); however, these theories remain insufficient to capture the ethical-normative dimension that is distinctive to Islamic cooperatives (KSPPS/BMT). This study identifies a research gap in the form of fragmented scholarship—separated between conventional cooperative governance studies and Sharia-compliance studies on full-fledged Islamic banks—and the absence of a framework that coherently integrates governance, technology, organizational culture, and Islamic ethics/law for the cooperative context. The novelty of this study lies in the development of a Four-Pillar Integrative Cooperative Anti-Fraud Model, which adds a “Shariah Ethics and Compliance” pillar—encompassing the role of the Sharia Supervisory Board, the internalization of amanah (trustworthiness) and ihsan (benevolence), the prohibition of gharar and khiyanah, and maqashid shariah (hifz al-mal)—to the three conventional pillars (governance, technology, and organizational culture). The model offers a theoretical contribution to value-based cooperative risk management, as well as practical implications for regulators (the Ministry of Cooperatives and SMEs, OJK), Sharia Supervisory Boards, and KSPPS/BMT practitioners in designing holistic, maslahah-oriented fraud-prevention systems.

Keywords: fraud; cooperatives; KSPPS/BMT; Sharia governance; maqashid shariah; fraud pentagon; systematic literature review; integrative anti-fraud model.