Institutional Analysis of Bank Syariah Mandiri (BSM) in Channeling Credit Program for Small Enterprises (KUR) at Depok, West Java and Ciputat, South Tangerang

Aims of this case study are to analyze the behavior of BSM related to regulation of KUR, transaction costs and respond of KUR customers. Method of this study is descriptive analysis with reference theory of institutional economics and money lender paradigm. Data is collected by survey with BSM’s customers as a respondent from June to October, 2012. During survey, there are two kinds of interview, namely in-depth interview and questionnaire base interview. The BSM faces two main constraints in implementing KUR program, first, all fund of KUR is from third party (saving and deposit funds) and second, new customers of KUR are mostly un-bankable. The results of this research show as follow; first, more than seventy per cent of new customers have income more than two million IDR per month, they are not poorest, second, BSM gives priority to new customers based on the reference of old customers who are a good performance and have an integrity, third, existence of transaction costs is a significant, the cost is around twelve per cent of total financing, fourth, BSM asks a collateral to new customers under amount of financing value in order to make a commitment between bank and customer and to avoid moral hazards, although this collateral is not required in contract. The implication of these results is that KUR program is not open access to poor or needy peoples, and transaction costs and reference system for new customers are becoming obstacles to access BSM. This is a consequence to avoid Non-Performing Financing by implementing prudential policy.