Structural Equation Modeling to Analysis of Customer’s Decision in the Utilization of Baitul Maal Wat Tamwil for Agribusiness Development

Abstract

The banking is one of the drivers of the development of the entire Indonesian nation.  Based on Law No. 72 of 1992, permitting business activities with the principle of profit sharing for the Bank. The bank itself can operationally not touch the small community in the countryside. Therefore BMT (Baitul Maal Wat Tamwil) is needed to become one of the Islamic microfinance institutions that can meet the needs of the community. This study aims to analyze how customer perceptions of BMT, How customer decisions in the use of BMT and what are the dominant factors that influence customer decisions in the use of BMT. The research method used is descriptive quantitative with 88 respondents, of which 35 are agricultural customers and 53 are non-agricultural customers. The analytical method used is descriptive analysis and PLS (Partial Least Square) analysis. Based on the results of the study showed that with the high risk of financing in the agricultural sector, many BMTs are reluctant to provide financing in the sector. Factors that influence customer decisions consist of internal factors and external factors. These two factors significantly influence customer decisions in the use of BMT for the development of rural agribusiness in Cisitu District, Sumedang Regency.