Indonesia Conference Directory

This study examines the characteristics of Non-Profit Microfinance Institutions (NMFI) clients and discuss the determinant factors used by Islamic NMFI to select the clients. Primary data was collected using questionnaires of 270 respondents including the clients and non-clients of three case study institutions in Jakarta and Yogjakarta Indonesia. Data was analyzed using poverty level analysis and logistic regression. The findings show that clients and the non-clients of NMFIs have a similar profile in relation to age, formal education period, and family size variables. Further analysis of poverty level shows that the majority NMFIs- clients live above the national poverty line, but they live perilously close to the edge of the poverty line. Using logistic regression, this study found that the higher the client-s income level, the higher the probability of their being selected in the program. This finding indicates that Islamic non profit microfinance institutions have not selected the more vulnerable group in society to be their clients. This study suggests some possible barriers to include the poor in the microfinance including institutional selection policy and self exclusion factors.