This study uses data from the survey IFLS-4 (Indonesia Family Live Surveys-wave 4) to analyze the impact of competition between lenders on cli­ent behaviour. IFLS-4 contains data on self-reported habits of community residents (312 community) decision to access to Islamic Micro Finance Institu­tion (Islamic MFI), named Baitul Maal wat Tamwil (BMT). This data con­tains specific type of BMT’s location which could be accessed by community, with variously geographical distances. This data also is enriched by the presence of another type of conventional MFI. This study found that in­creased competition suggesting clients to change their behaviour. The pres­ence of conventional MFI and theirs proximity as indicator of competition, very instrumental in determining access to BMT. Interesting finding, for religious type borrowers, they tend to sustain their access to BMT whose more far geographical distance, even conventional MFI presence inside their vil­lage. Thus, this study suggests that the expansion of financial inclusion stra­tegy of Islamic MFI should also be specifically determined by behaviour of and the BMT’s location among the community.


Micro Finance, Islamic, Competition, Borrower, Access

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