Banda Aceh to establish sharia financial institution

BANDA ACEH -- The Banda Aceh municipal government in Aceh plans to establish a Sharia microfinance institution in the form of a limited liability company following a discussion on regulations for the formation of the company.

Member of the Local Regional Legislative Assembly Iskandar Mahmud remarked here on Monday that the plan to establish the Sharia microfinance institution was the initiative of the executive board.

"The limited liability company to be formed is PT Syariah Mikirah Mualamah Micro Finance Company, which will belong to the Banda Aceh city government," Mahmud noted.

In addition to the draft law on the formation of a limited liability company, he said, the executive also proposed the draft law on Banda Aceh City's capital investment in PT LKM Syariah Mahirah Muamalah.

"Two laws will be in place to serve as a legal basis for the establishment of PT LKM Syariah Mahirah Muamalah, and two draft laws have already been discussed by the legislative and executive," Mahmud remarked.

The Golkar Party politician stated that the draft law for the establishment of PT LKM Syariah Mahirah Muamalah and the draft law for capital participation in the company have been discussed with the Ministry of Home Affairs and the Government of Aceh Province.

"According to the results of the consultation, the Banda Aceh city government is allowed to establish a limited liability company that will be a regional-owned enterprises, or BUMD," Mahmud explained.

In terms of the ownership of shares, he pointed out that Banda Aceh city government will have a minimum 51 percent stake in PT LKM Syariah Mahirah Muamalah, and this is a mandate of the local government law.