Socioeconomics Development

1. Set up an model ethics and socioeconomics
development in mainstream economics
Set up an model ethics and socioeconomics
development in TSR case
TSR for Better Civilization

2. Contents
What is socioeconomics development?I
No. 2
How the Implementation of socioeconomic development in
mainstream ?
II
How the implementation of socioeconomic development in Islamic
finance ?
III

3. What is ethics in development ?
“Development = Economic Growth + Social Change”
Ethical development
is such as sustainable
development , What
is sustainable
development ? its
mean the
development should
be given the impact
not only for recent
generation but also
for the next
generation (Reardon
and Vosti, 1995)

4. How the Implementation of socioeconomic development in mainstream ?
As Example is Implementation in Microfinance
Microfinance
Enviromnetal Concerning
Social PerformanceFinancial Performance
The originality of microfinance objective, it's
to achieve the double bottom line. That is
mean microfinance institutions are mindful
not only about financial performance, but
also by social indicators. Econometric
analysis is used to assess financial
performance, and guidance is provided for
extending the analysis of social performance
indicators or MFIs have a double aspect:
financial and not-for-profit. It is, therefore,
appropriate to assess their performance by
means, not only of financial ratios, but also
by means of social indicators (Frank, 2008;
Armendariz and Labie, 2011; Hudon, 2011;
Stuart, 2011; Balkenhol and Hudon, 2011; Cinca
et al, 2011).

5. How the Implementation of socioeconomic development in mainstream ?
In other word the MFIs was designed to serve
unbanked and poor, it's seen by some as a magic
wand against poverty that is supposed to solve it all
(Labie, 2011), but microfinance neither a panacea
nor a magic bullet, and it can’t be expected to work
everywhere or for everyone (Armendariz and
Morduch, 2010).
Social and Environmental bottom line

6. How the Implementation of socioeconomic development in mainstream ?
Then the question comes up, is there a link between poverty
and environmental concerns? The link between poverty and
environment is often mentioned in sustainable development
(Reardon and Vosti, 1995), its mean the development should
be given the impact not only for recent generation but also for
the next generation. Link between poverty and environment
Its shown in recent year, there is an effort from the
development practices to the empowerment of MFIs with
starting to consider their environmental bottom line in addition
to their financial and social objectives (Allet and Hudon,
2013).
Social and Environmental bottom line

7. How the Implementation of socioeconomic development in mainstream ?
But why should microfinance should concern in environmental
bottom line? Allet (2013) mention the clients of MFIs should
be responsible for climate change because they have an
impact on the environment. The clients of MFIs have
contributed in major environmental risk like chemical
pollution, solid and liquid wastes, pollution emissions,
inefficient production processes (energy-consuming, waste-
producing), and degradation of natural resources. Regarding
this risky, there are environmental issues in the community,
such as health and sanitary issues, economic consequences,
risk of conflicts, increased vulnerability and food security.
Social and Environmental bottom line

8. How the Implementation of socioeconomic development in mainstream ?
« To control and monitor the implementation we need Social
Performance Indicator (SPI) «
Social and Environmental bottom line

9. Based on leading
industry initiatives and
practices implemented
successfully by MFIs
Voluntary resource—
not a rating,
regulatory or
certification system

10. “Tracking and
monitoring how the
MFI’s mission is
embedded in its day-
to-day operation is
key.”
–Ellen Willems, Triodos
Investment
Management
 Has a strategy to achieve its social goals.
 Collects, reports, and ensures the accuracy of
client-level data.

11. “What’s important is
that the principals of
the company are true
to the mission and
pursuing goals in a
meaningful way.”
–Asad Mahmood,
Deutsche Bank
 Board is committed to the social
mission.
 Board holds institution
accountable to its social mission
and goals.
 Senior management sets, and
oversees implementation of,
strategy for achieving social goals.
 Recruits, evaluates, and recognizes
employees based on both social
and financial performance criteria.

12. “We want MFIs to be
seen as a place where
clients are treated
responsibly.”
–Stuart Coe,
The Co-operative
Banking Group
 Ensures clients have the
capacity to repay without
becoming over- indebted.
 Communicates in a manner and
language that clients can
understand.
 Treats clients fairly and
respectfully—and has safeguards
to detect corruption and abuse.
 Respects the privacy of individual
client data.
 Has timely and responsive
mechanisms to resolve problems
and improve products and services.

13. "Understanding clients
opens the way to
developing services that
are useful to them.”
–
dit Agricole
 Understands the needs and preferences of different types
of clients.
 Designs products, services, and delivery channels that do
not cause clients harm.
 Designs products, services, delivery models and channels
to benefit clients.

14. "Another socially
responsible business
practice is treating staff
well.”
–Dina Pons, Incofin
 Follows a written Human
Resources policy that protects
employees and creates a
supportive working environment.
 Communicates terms of
employment and provides training
for essential job functions to all
employees.
 Monitors employee satisfaction
and turn-over.

15. “Microfinance stands
on two pillars—one is
financial, the other is
social—and without
both the industry will
never have the impact
we want.”
–Nancy Samy, former
Deputy Executive Director
of Sanabel, Egypt
 Has growth rates that are
sustainable and appropriate for
market conditions.
 Has a financing structure that is
appropriate to a double bottom line
institution.
 Pursuit of profits does not
undermine long-term sustainability
or client well-being.
 Compensates senior managers
appropriately for a double bottom
line institution.

16. Vision of the Smart Campaign
The Smart Campaign envisions a fundamental
transformation of the microfinance industry in four key
ways:
Focus on
clients
•All industry
stakeholders
will put the
interests of
clients first
Transparent
and prudent
services
•MFIs will
provide
transparent,
respectful,
prudent
financial
services
Full integration
of client
protection
•Client
protection
principles will
be fully
integrated into
all
microfinance
operations
Gain pro-
consumer
reputation
•The
microfinance
industry will be
distinguished
as leader in
responsible
finance

17. • Internal self-assessment (1 full day) or
external audit
• Centralized (top management) or participatory
approach (different stakeholders and levels of
the MFI)
• 2-3 day process (centralized) / 5-7 day
(participatory)
The SPI tool
Methodological options

18. Context and strategies
• Rural, women business sector
• Mature MFI
• Previous crises in MF sector
(i.e: over-indebtedness, mission drift) has
pushed social agenda forward
SPI results
• Strong and balanced performance
• Range of services and Benefits to clients can
be improved
The SPI Tools (my previously research)
Example of results: A participatory
MFI
0%
20%
40%
60%
80%
100%
Targeting the poor
and excluded
Adaptation of
services
Benefits to clients
Social
responsibility
0%
20%
40%
60%
80%
100%
Geographic Targeting
Individual targeting
Pro-poor methodology
Range of traditional
services
Quality of services
Innovative and non
financial services
Economic benefits
Client participation
Empowerment
SR towards staff
SR towards clients
SR towards community
and environment

19. How the Implementation of socioeconomic development in TSR ?
“From Tawhid in the primal to Tawhid in the Hereafter
through learning in unification of knowledge in the
world-systems”
“The dynamics inherent in this correspondence leads
to a massive field of complex analytical
developments in the widest domain of socioscientific
inquiry”
.
.
Universality of the Tawhidi worldview methodology arises from the
fact that the simple primitive conception of the oneness of Allah or the
unity of divine knowledge as expressed by the relation:

20. How the Implementation of socioeconomic development in TSR ?
The analytical paradigm of the Tawhidi worldview is
a singular and emphatic advance in the functional
understanding of unity of the divine
law in action in learning fields.
.
circular causation model of unified reality the
Hereafter is a functional concept like Tawhid

21. Implementation on TSR
Reinvent the Heritage
Falah
Adil Equality Maslahat
Ukhuwah
Syariah Akhlak
Tauhid and Maqhadis Sharia
Islamic Economic Values
Believe on Allah
Humanity
Nationalism
Democration /Musyawarah
Social Justice
National Heritage (Pancasila)
• Etthics, Moral that
appropriate with maqhasid
sharia
• Good Governance
• Real Sector Development
• Limitation of Bubble
Economic
• Inclusion of the Society in
the Economic Growth
• Ekonomiic participatory
based on justice and
equality
• Equal acces to economics
resources
• Enforcement to
implementation of profit
and loss sharing .
• Sincronize of between
financial system and riil
sector
• Sustainable & responsible
investment.
• Prudential practices.
• Sharia compliance.
Indonesia
Society
Well Being
Interaction , Integration
Ω, S

22. • Definition is try to be better through continous improvement :
– “You are the best nation produced [as an example] for mankind. You enjoin what is right and
forbid what is wrong and believe in Allah . If only the People of the Scripture had believed, it
would have been better for them. Among them are believers, but most of them are defiantly
disobedient “ (Q.S. Ali Imran (3) : 110).
EXCELLENCE (IMTIYAAZ)

23. • Perilaku (behaviour) developed the trusty and positive thinking
.
“O you who have believed, avoid much [negative] assumption. Indeed, some
assumption is sin. And do not spy or backbite each other. Would one of you like to eat
the flesh of his brother when dead? You would detest it. And fear Allah ; indeed, Allah
is Accepting of repentance and Merciful.” (Q.S. Al Hujuraat (49) : 12).
TEAMWORK (‘AMAL JAMA’I)

24. • Perilaku: developed positive plan and way to get of ridha
– Sincerity
– ” And who is better in religion than one who submits himself to Allah while
being a doer of good and follows the religion of Abraham, inclining toward
truth? And Allah took Abraham as an intimate friend..” (Q.S An Nisaa (4) :
125).
HUMANITY (INSAANIYAH)

25. Definition: (developed ethic code and doing
postive way)
– ” O you who have believed, be persistently standing firm for Allah , witnesses in justice,
and do not let the hatred of a people prevent you from being just. Be just; that is nearer
to righteousness. And fear Allah ; indeed, Allah is Acquainted with what you do..” (Q.S.
Al Maa-idah (5) : 8).
INTEGRITY (SHIDDIQ)

26. • behavior:
– Good Governance
• " Indeed, Allah loves a person who if does something done as
possible (orderly and neat)." (H. R. Imam Baihaqi dari Aisyah).
• “The words of friend Ali Bin Abi Talib: "The truth (haq al) is not in
managing / organizing (tandhim) well will be defeated by evil are in
managed / well organized."
CUSTOMER FOCUS (TAFDHIILU AL-’UMALAA)

27. “ When we born to the world we are crying and the people was smile, and when
die, We will smile and the people will cry”
It’s mean our mission as representative of Allah (Khalifatullah) has been
completed