<![CDATA[Background: Baitul Maal Wat Tamwil (BMT) is a distinctive Indonesian form of Islamic microfinance because it combines cooperative membership, commercial microfinance, and a moral commitment to riba-free transactions. Objective: This study explains why some BMTs in South Sumatra survive, reform, and expand, whereas others stagnate or collapse. Methods: The study applies a qualitative multiple-case design with inductive thematic analysis of seven BMT cases: BMT Al-Aqobah Palembang, KSPPS BMT Bina Ummat, BMT Insan Mulia Palembang, Kopsyah BMT Prima Lempuing Jaya, BMT Surya Barokah Palembang, KSU Syari’ah BMT Trans Mekar Sari Mandiri, and BMT Puskopis. Interviews, observations, institutional documents, and descriptive financial indicators were triangulated with literature on Islamic microfinance, cooperative governance, mission drift, and institutional sustainability. Results: Islamic identity attracts legitimacy but does not automatically generate resilience. Surviving BMTs convert moral legitimacy into accountable organizational routines through selective financing, transparent administration, member proximity, digital and administrative adaptation, human resource development, and real-sector anchoring. Fragility emerges when weak internal control, non-selective financing, insider opportunism, overlapping collateral, and withdrawal delays erode community trust. Contribution: The article advances a survival–fragility framework in which moral-Shariah identity, community embeddedness, governance discipline, and adaptive capacity operate as mutually reinforcing conditions for BMT sustainability.]]>
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