One of the villages in Giligenting, Galis Village, has great potential in marine catches. The potential for fishery resources in coastal areas is quite large, but some people in these areas are still below the poverty line. Efforts to eradicate poverty are also Islamic religious recommendations so that those concerned become pious people. Poverty can be easily recognized and is characterized by conditions of backwardness, powerlessness and incompetence from an economic perspective, as well as large numbers of unemployed people, which in turn triggers income inequality and gaps between population groups. The limited number of productive age population has an impact on processed fish production activities in Galis Village. Thus, the people of Galis sell their processed catch directly to traders without any processing because they do not have the skills to process the catch.

One of the solutions proposed to create a sustainable source of income for the poor is the idea of ​​Islamic microcredit. Sharia microcredit enables poor people to set up micro-enterprises and thus meet their basic needs. The purpose of the loan, monthly income, monthly expenses, interest rate, loan amount, have a significant influence on the possibility of increasing the borrower’s welfare after accessing microcredit. Research with LKMS results has a statistically significant impact on family monthly consumption expenditure which causes a significant increase in people’s living standards.

LKMS performed better in terms of outreach to poor customers. Microfinance has an important role in increasing income levels, children’s education and business progress. LKMS is one solution to create a sustainable source of income for poor communities. Where microcredit allows poor people to set up micro-enterprises and thus be able to spend on their basic needs. Sharia microfinance is an effective tool for poverty alleviation throughout the world and Sharia microfinance is a beneficial model that improves individual welfare not only for Muslims but also for non-Muslims well. LKMS provides an important impetus for realizing financial inclusion, especially for women, low-income earners and rural poor. Sharia microcredit can be a tool for sustainable socio-economic development. The LKMS financing model can help reduce poverty and the problem of loan sharks.

Author: Atik Purmiyati, S.E., M.Si.