| Summary: | This study investigates the determinant factors of SMEs in choosing financing from Baitul Maal wat
Tamwil (BMT) as one of Islamic financing modes in West Sumatera.Moreover, this study also determines the important level of key factors which influenced the SMEs in choosing their Islamic financing.This research has been conducted in West Sumatera and the population of this study is all SMEs which used or potentially to use BMT financing.However, because the number of population is unknown, this study collected the data from 300 SMEs by using Cochran’s formula to calculate the number of sample.In addition, to analyze the data, this research deployed exploratory factor analysis (EFA) and analytical
hierarchy process (AHP) as the analysis tools.The results found 12 determinant factors for SMEs in
choosing financing from BMT, including profit sharing systems, proximity to the customers, service quality, customer cost, service charges, risks and benefits, repayment methods, fund installment, funding submission process, service schedule, training for customer and interest-free loans.Furthermore, by using AHP analysis this study found the level of importance of 12 factors respectively, including fund installment, repayment methods, risks and benefits, interest-free loans, funding submission process, training for customer, service schedule, profit sharing systems, service quality, proximity to the customer, the customer cost and service charges.
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