<![CDATA[Introduction: Baitul Maal wat Tamwil (BMT) plays an important role in strengthening Islamic microfinance and expanding financial access for micro, small, and community-based enterprises. However, BMT institutions in Indonesia face increasing challenges arising from digital financial transformation, intensified competition within the microfinance sector, limited institutional capacity, governance weaknesses, and changing expectations among customers and microentrepreneurs. These challenges require BMTs to move beyond conventional operational practices toward institutional transformation that integrates Islamic principles, professional governance, technological innovation, and sustainable financial practices. This study aims to analyze the institutional revitalization of Baitul Maal wat Tamwil (BMT) in North Sumatra and develop an institutional transformation model for strengthening sustainable Islamic microfinance. Methods:The study employs a qualitative approach with a case study design. Data were collected through in-depth interviews with BMT managers, employees, members, and relevant stakeholders, complemented by direct observation and institutional documentation. The data were analyzed using the Miles and Huberman interactive model, consisting of data reduction, data display, and conclusion drawing. Qualitative data analysis was supported by NVivo to identify recurring themes, relationships, and institutional patterns. The credibility of the findings was strengthened through source and methodological triangulation. Results: The findings reveal that BMT revitalization in North Sumatra is shaped by four interrelated institutional transformation mechanisms. First, institutional governance strengthening is achieved through improvements in organizational accountability, transparency, risk management, professional human resource development, and compliance with Islamic principles. Second, digital transformation enhances the accessibility, efficiency, and responsiveness of BMT services through digital payment systems, technology-based financing administration, customer databases, and digital communication. Third, sustainable Islamic microfinance innovation is reflected in the development of financing products that respond to the needs of microentrepreneurs while maintaining the principles of fairness, risk sharing, and avoidance of riba, gharar, and maysir. Fourth, community-based economic empowerment strengthens the social function of BMT by integrating financing with entrepreneurial assistance, financial literacy, business mentoring, and the mobilization of Islamic social funds. The findings further indicate that the effectiveness of these mechanisms depends on the integration of institutional professionalism with the social and religious values underlying the BMT model. Conclusion and suggestion: This study proposes an Institutional Transformation Model for Sustainable Islamic Microfinance, in which BMT revitalization is understood not merely as organizational restructuring but as a multidimensional transformation involving governance, digitalization, Islamic financial innovation, and community empowerment. The model demonstrates that sustainable BMT development requires a balance between financial sustainability, institutional professionalism, technological adaptability, and the social mission of Islamic microfinance. BMTs in North Sumatra can therefore strengthen their institutional resilience by combining modern management practices with Islamic ethical principles and community-oriented financial services. Future research could quantitatively test the proposed institutional transformation model across BMTs in different regions of Indonesia and examine the influence of digital transformation, governance quality, Islamic financial literacy, and social capital on BMT sustainability.]]>
