The Role of Member Trust in Mediating the Influence of Sharia Financial Literacy and Sharia Governance on BMT Member Participation

Abstract

This study examines the mediating role of member trust in the relationship between sharia financial literacy and sharia governance on member participation in Baitul Maal wat Tamwil (BMT). Although previous studies have emphasized the importance of literacy and governance in Islamic financial institutions, limited empirical evidence explains how these factors translate into active member participation. This study addresses this gap by positioning trust as a key behavioral mechanism within Islamic microfinance. A quantitative approach was employed using survey data collected from 210 BMT members, determined based on the indicator-to-sample ratio. Data were analyzed using Structural Equation Modeling–Partial Least Squares (SEM-PLS) to test both direct and indirect relationships among variables. The results show that member trust has a strong and significant effect on member participation (β = 0.773; p < 0.001). Sharia financial literacy significantly influences member trust (β = 0.416; p < 0.001), as does sharia governance (β = 0.450; p < 0.001). Furthermore, member trust significantly mediates the effect of sharia financial literacy on participation (β = 0.321; p < 0.001) and the effect of sharia governance on participation (β = 0.348; p < 0.001). This study is limited by its cross-sectional design and focus on BMT members in a specific context, which may restrict generalizability. Future research may apply longitudinal designs or comparative institutional settings. This study provides empirical evidence that trust is a critical mediating variable linking cognitive and governance factors to participatory behavior in Islamic microfinance institutions.