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Economy

Banks, startups and watchdogs harness Islamic finance opportunities

New wave of Shariah-compliant services fuses innovation and tradition

BTPN Syariah's Islamic microfinance borrowers gather to make payments.

JAKARTA/SINGAPORE -- Early one August morning, before the heat became unbearable, several dozen people gathered in a courtyard in the Indonesian village of Kasaman, not far from Jakarta. They were there to repay debts -- and to simply be seen.

"Everyone, please check the details of your contracts." Seated before the crowd of mostly women, the staff of BTPN Syariah shouted instructions. The Islamic bank hosts similar meetings across the country: Residents who take out small loans under Shariah-compliant microfinance arrangements gather every two weeks to make payments in front of their neighbors.

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