The ethical paradox in Islamic cooperatives: A lesson learned from scandalous fraud cases in Indonesia’s Baitul Maal Wat Tamwil

This paper examines the value interplay and governance challenges among cooperatives, particularly operating in an extreme environment such as Indonesia’s BMTs (Islamic cooperatives). act a “bridge” for small medium enterprises to gain financial support unobtainable from more formal institutions. have experienced unprecedented growth Indonesia. Recently, there has been alarming increase instances magnitude of fraud BMTs. is built on micro?level evidence showing how creation disruption lead cooperatives. The author focuses specific process understand incidents disrupt internalised values affect organisational governance. findings indicate overlapping cooperatives settings need better alignment between micro macro minimise fraud.