Institutionalizing faith and economic justice: A comparative case study on Islamic and Catholic credit cooperatives in Indonesia

Abstract

This study examines the role of religion in promoting economic justice through the establishment of credit unions. Economic inequality remains a persistent global challenge, and previous research shows that both religion and cooperatives are significant contributors of socioeconomic transformation. Using a comparative case study approach, this study explores how religious values are put into practice in Islamic- and Catholic-based credit cooperatives in Indonesia. Data were collected through observation, in-depth interviews, and secondary sources. The findings show that economic and social inequality, together with theological principles regarding economic justice, are key factors driving the establishment of credit cooperatives. This comparison further reveals differences in how economic justice is theologically articulated. Islamic cooperatives integrate religious principles explicitly into their operational frameworks, whereas Catholic cooperatives embed these principles implicitly. Religious networks play a critical role in the cooperative formation, organizational development, member mobilization, and trust-building. The two traditions also differ in their relationship with the state. Islamic religious networks exhibit closer ties to state institutions than their Catholic counterparts. This study makes a contribution to the discourse on religion and economic justice by providing empirical evidence of how faith-based collective action fosters inclusive economic initiatives through cooperative institutions.