What is Guyub

Most emerging countries have communities categorized as excluded and underserved, unbanked and underbanked, the bottom of the pyramid (BoP), and ultra poor which have no ability to access bank financing. They are often victims of loan sharks. They should be a target of microfinance, but most banks and also microfinance institutions (MFIs) do not yet do well in serving them. Likewise, Islamic microfinance in fact has also not succeeded in reaching these people. Islamic nanofinance through qardhul hassan is promoted as a new paradigm to fill the Islamic microfinance gap. Through a field experiment for eight months by providing a fund IDR5 million with a maximum loan IDR1 million to provide nanofinancing, this study investigated the financial behavior of the nano-entrepreneurs in managing the qardhul hassan in Indonesia. The outcome of this study is expected to be input for policymakers, especially for the Islamic micro-industry, to come up with financing schemes according to the characteristics of these communities.