Sharia Governance in Islamic Microfinance Institutions: The Role of The Sharia Supervisory Board at BMT Islam Abdurab Pekanbaru

Abstract

Background: The rapid growth of Islamic microfinance institutions in Indonesia underscores the need for effective Sharia governance, particularly to ensure consistent compliance with Sharia principles at the operational level.
Purpose: This study aims to analyze the role of the Sharia Supervisory Board (SSB) in overseeing the implementation of Sharia principles at BMT Islam Abdurab Pekanbaru, Indonesia.
Design/methodology/approach: This study employed a descriptive qualitative methodology, utilizing in-depth interviews and document analysis. Thematic analysis was conducted to examine the SSBs’supervisory functions, challenges, and strategies.
Findings/Result: The findings show that the SSB plays a strategic role as a supervisor, advisor, and internal coach in ensuring compliance with fiqh muamalah. However, supervision is constrained by limited execution authority, insufficient human resources with integrated Sharia finance expertise, and rapid development of Sharia financial products and technology. To address these challenges, the SSB conducts periodic Sharia audits, strengthens Sharia-based standard operating procedures, enhances internal capacity, and coordinates with the National Sharia Council (DSN-MUI) and academic institutions.
Conclusion: SSB supervision at BMT Islam Abdurab operates effectively but requires institutional strengthening and support for an integrated system.
Originality/value (State of the art): This study offers empirical insights into Sharia supervision practices in Islamic microfinance, an underexplored area in the literature on Sharia governance.

Keywords: sharia supervisory board, sharia governance, compliance with sharia principles, sharia microfinance institutions, sharia audit