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Education and microfinance: an alternative approach to the empowerment of the poor people in Indonesia.

There is good reason to combine education with microcredit for poverty alleviation in the poor communities of the developing world, including in Indonesia. Poverty is dangerous, it deprives people of their right to education, their right to good health, their right to freedom of speech, their right to democracy, their right to financial services and of course their right to knowledge enhancement, which are all crucial to living a better life. We must therefore, provide services beyond, credits for the poor. In this case, education should be included to each and every development agenda for the poor since it is key to any positive change and sustainable development of people. If well planned and well integrated within the microcredit services, education can serve a good purpose in poverty alleviation. This paper describes how education and microfinance have been used in combination to alleviate poverty in Indonesia, especially in the areas studied. The study uses a multi-cases approach to examine the purposively selected baitul maal tamwil (BMTs) organisations, which are sharia based semiformal microfinance institutions regarded to be among those few integrating education with their financial services.

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