Islamic Cultural Role of Traditional Market Traders in Selecting Business Finance and Its Impact on the Welfare of the Traders (Case study on Mataram Islamic Heritage Traditional Market Traders in Yogyakarta Special Province)

Anung Pranowo, Muslich Anshori, Muhamad Nafik Hadi Ryandono


There is a strong influence of Islamic leadership that establishes the socioculture of the community. Therefore, market traders become the integral part of the socio-culture that live and thrive in the community.

The trading business financing source choices of Islamic Mataram heritagetraditional market tradersin Yogyakarta Special Region consist of Islamic and non-Islamic finances. Islamic finances come from their own funds, Grants, consignments, and BMT, while non-Islamic finance is the Usury Financing System. The socio cultural state of Kotagede and Plered market traders is Islamic than Gentan market traders'.  The reasons of this research informant to choosenon-Islamic finance are the small amount of loans granted by BMT, and the informant limitation in accessing existing Islamic financial institutions while the informant is in urgent need of additional capital immediately.Islamic finance sourced from own funds, those are grants and consignments, do not add the trade financing structure, because there is no cost additional burden associated with the business financing addition. Non-Islamic business financing in this study are business-financing trade with usury system in which practically informantis more influenced by her/his desire and rationality that states that there is limited access to cheap and Islamic financing sources.

Informants who use Islamic business financing averagely progress good business performance. Informants who use the trade financing from their own capital, grants and entrusted goods interpret welfare not just measured based on the material alone, as well as the ones who usetrade financing from BMT. Informants who use non-Islamic trade financing averagely also show a relatively good business development, but there is substantive difference in the informant attitude.

The Islamic Mataram heritage traditional market trader conditions in Yogyakarta Special Region could be grouped into the rich and the poor. It was seen from the prosperity line indicators. There were 10 informants that classified in the rich category (2 Gentan traders, 5 Kotagede traders, and 3 Plered traders) and 5 informants that classified in the poor category they were 4 informants from Gentan market and 2 informants from Plered market.

Some market trader informants categorized as muzaki[1] already do the obligation to pay the income zakat[2]. They are five informants from Kotagede market and 2 informants from Plered market who perfectly pay income zakat by 2.5% of the income after the autonomous consumption cost and the nisab[3].However, there are some informants categorized as muzaki but they have not paid income zakat (1 informant from Plered market and 3 informants from Gentan market).Those four informants are categorized as muzaki just this recent year, before, they were categorized as mustahik[4]. There are 6 market trader informants categorized as mustahik, they are 4 informants from Gentan market and 2 informants from Plered market. From the six informants categorized as mustahik, 3 informants use non Islamic trade financing and they are from Gentan market, while the other 3 informants use Islamic trade financing and they are from Plered market.

This research did not find any informant who has problems with welfare under six sharia maqosid compliances. The number of informants who use Islamic trade financing is an adaptive response to the Islamic socio-cultural conditions. Financing from their own funds, grants, consignments and BMT is a trade financing that does not violate syar’i law and is in accordance with the Islamic cultural norms. While, financing by interest or usury system that used by some informants in Gentan market is also an adaptive response related to the looseIslamic socio cultural conditions; it can be used as a reflection of the lessenedcultural norms influence of Islamic leadership.

Keywords: Islamic culture, trade financing, welfare trader.

[1]Muzaki: a person who has to pay zakat

[2]Zakat: alms that obligated to muslims when their wealth complies certain amounts

[3]Nisab: minimum amount of property subject to zakat

[4]Mustahik: a person who entitled to zakat

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