Samarah: Jurnal Hukum Keluarga dan Hukum Islam Volume 9.
No.
November 2025 ISSN: 2549 Ae 3132.
E-ISSN: 2549 Ae 3167 DOI: 10.
22373/sjhk.
The Transformation of Gala and Mawah:
Towards the Sharia Gala Bank Microfinance Model in Aceh Wardiah Hamid National Research and Innovation Agency.
Indonesia Dedy Sumardi Universitas Islam Negeri Ar-Raniry Banda Aceh.
Indonesia I Made Suarsana National Research and Innovation Agency.
Indonesia Muhammad Dachlan National Research and Innovation Agency.
Indonesia Hamsiati Hamsiati National Research and Innovation Agency.
Indonesia Email: ward006@brin.
Abstract: The Acehnese society has long practiced customary economic arrangements such as gala .
and mawah .
rofit-sharin.
However, the traditional gala practices are frequently exploitative and inconsistent with the Sharia principles, as lenders exercise full control over collateralized productive In addition, the potential of mawah as a cooperative economic mechanism has not been fully realized.
This qualitative study examines the transformation of these customary practices into sustainable Sharia-based microfinance institutions through a case study of their implementation in Southwest Aceh.
Data were collected through observations and in-depth interviews.
The findings indicate that KSPPS Baitul Qiradh Gala Muamalah, commonly known as the AuGala Bank,Ay has initiated a revitalization of local economic wisdom grounded in Sharia A fundamental transformation is evident in the gala practice through the application of a rahn (Sharia paw.
contract, whereby the institution holds only the collateral, while productive assets, such as rice fields, remain under the management of their owners.
This arrangement enables farmers to continue agricultural production and generate income.
For working capital financing, the institution employs a mudharabah .
rofit-sharin.
contract with a flexible postharvest repayment system.
The AuGala BankAy model has successfully transformed previously harmful practices into equitable, farmer-empowering, and Shariacompliant transactions.
Consequently, this initiative demonstrates how traditional economic practices can be effectively adapted into a modern, sustainable economic framework rooted in local culture, serving as a model for communitybased economic development.
Keywords: Gala.
Mawah.
Gala Bank.
Economic Heritage.
Aceh ic Submitted: August 10, 2025 ic Accepted: December 31, 2025 http://jurnal.
ar-raniry.
id/index.
php/samarah icPublished: December 31, 2025 The Transformation of Gala and Mawah Wardiah Hamid, et.
DOI: 10.
22373/sjhk.
Abstract: Masyarakat Aceh memiliki praktik ekonomi adat gala .
dan mawah .
agi hasi.
Namun, praktik gala tradisional seringkali bersifat eksploitatif dan bertentangan dengan syariah karena pemberi pinjaman menguasai sepenuhnya aset produktif yang dijaminkan.
Di sisi lain, potensi mawah sebagai skema kerja sama belum dioptimalkan.
Penelitian kualitatif ini menganalisis bagaimana kedua praktik ini dapat ditransformasikan menjadi lembaga keuangan mikro syariah yang berkelanjutan, dengan studi kasus pada praktik yang masih eksis di Aceh Barat Daya.
Data diumpulkan melalui observasi dan wawancara.
Hasil penelitian menunjukkan bahwa KSPPS Baitul Qiradh Gala Muamalah, atau "Bank Gala" berinisiatif merevitalisasi kearifan lokal dengan prinsip syariah.
Transformasi fundamental terjadi pada praktik gala, di mana "Bank Gala" menerapkan akad rahn .
adai syaria.
Lembaga ini hanya menahan surat jaminan, sementara aset produktif seperti sawah tetap dikelola oleh pemiliknya.
Hal ini memungkinkan petani untuk terus bekerja dan memperoleh penghasilan.
Untuk pembiayaan modal kerja, digunakan akad mudharabah .
agi hasi.
dengan sistem pengembalian pascapanen yang Model "Bank Gala" terbukti berhasil mengubah praktik yang merugikan menjadi transaksi yang adil, memberdayakan petani, dan sesuai syariah.
Inisiatif ini berdampak pada keberhasilan adaptasi tradisi menjadi pilar ekonomi modern yang berakar pada budaya lokal, serta menjadi model pengembangan ekonomi masyarakat yang berkelanjutan.
Kata Kunci: Gala.
Mawah.
Bank Gala.
Warisan Ekonomi.
Aceh Introduction The Acehnese society has a long history of distinctive economic practices that predate the emergence of modern financial systems.
Among these practices, gala and mawah have been transmitted across generations and remain integral to local economic life.
These arrangements are commonly applied in the sectors of trade, agriculture .
articularly rice fields and dry field.
, and livestock.
Gala has been known among the Acehnese since at least the eighteenth century and continues to be practiced today.
Broadly defined, a gala refers to a form of capital lending that involves the use of movable or immovable assets as collateral, including rice fields, gold, houses, and vehicles.
The motivations for engaging in a gala vary, ranging from the expansion of business capital to the fulfillment of consumptive needs such as wedding and funeral expenses, as well as the financing of Christiaan Snouck Hurgronje.
De Atjyhers (Leiden: E.
Brill, 1.
Amirul Hadi.
AuAceh in History: Preserving Traditions and Embracing Modernity,Ay MIQOT: Jurnal Ilmu-Ilmu Keislaman 37, no.
Suhaimi.
Abdurrahman, and Ishak.
AuExistency Of Mawah (Product Shar.
Of Agricultural Land In A Traditional Law Society In Kuta Cot Glie Sub-District.
Aceh Besar District,Ay Jurnal IUS Kajian Hukum Dan Keadilan 9, no.
Azharsyah Ibrahim.
AuPraktik Ekonomi Masyarakat Aceh Dalam Konteks Ekonomi Islam: Kajian Terhadap Sistem Mawah Dan Gala,Ay The Aceh Development International Conference, no.
March .
http://jurnal.
ar-raniry.
id/index.
php/samarah The Transformation of Gala and Mawah Wardiah Hamid, et.
DOI: 10.
22373/sjhk.
This mechanism is often preferred because it is perceived as more practical and expedient than a formal bank loan.
Nevertheless, the traditional implementation of a gala frequently results in economic disadvantages for those who pawn their assets.
Empirical observations indicate that most individuals resort to gala to meet consumptive demands, such as education, healthcare, housing construction, or marriage ceremonies, while only a limited number utilize it as capital for productive economic activities.
3 As a consequence, pawners often suffer income losses due to reduced agricultural yields while their land is under pawn.
In extreme cases, the inability to redeem the pawned assets may ultimately lead to the permanent loss of ownership, particularly of rice By contrast, mawah is a crop-sharing custom that has existed in Aceh since at least the sixteenth century.
The sustainability of mawah is closely linked to the strong tradition of mutual assistance within Acehnese society, which is also consistent with Islamic values.
In agricultural practice, mawah is most commonly found in rice field management, where landless farmers are able to cultivate land owned by others through various contractual arrangements.
These include land-use agreements in exchange for a share of the harvest, wage-based arrangements as daily agricultural laborers, and cooperative agreements involving the sharing of both production costs and yields.
5 In addition to agriculture, mawah is also applied in the livestock sector, where profit-sharing arrangements are determined according to the sex of the animals.
Several forms of mawah have proven effective in improving community livelihoods by enabling landless farmers to sustain agricultural activities as a source of income.
Consequently, greater participation in mawah arrangements is associated with higher household income, as mawah functions as a supplementary economic Nelly et al.
AuA Pattern of Empowerment of Traditional Values Mawah as a Model of Poverty Alleviation Based on the Supply Chain Strategy,Ay International Journal of Supply Chain Management 9, no.
Ikhsan Fajri and Muksal.
AuImplementasi Akad Pembiayaan Syariah Pada GALA (Gadai Tradisiona.
,Ay Islam Universalia: International Journal of Islamic Studies and Social Sciences 3, no.
Muhammad Ali et al.
,Ay MawahAy Profit Sharing System with Local Acehnese Wisdom Based on Islamic Perspective,Ay Journal of Law.
Politics and Humanities 4, no.
Fahriansah Fahriansah.
AuTransaksi Ekonomi Klasik Masyarakat Aceh (Analisis Kelayakan Taqnin Hukum Ekonomi Syaria.
,Ay Ihtiyath : Jurnal Manajemen Keuangan Syariah 1, no.
Hassanain Haykal.
Johannes Ibrahim, and Shelly Kurniawan.
AuBuilding Sharia Law Banking System In Global Economic Development Under Local Wisdom Basis,Ay Revista de Gestao Social e Ambiental 18, no.
Sri Sudiarti.
Pangeran Harapan, and Nanda Safarida.
AuMawah & Cater Di Aceh: Studi Peningkatan Kesejahteraan Masyarakat,Ay Al Muamalat Jurnal Hukum Ekonomi Syariah i, no.
http://jurnal.
ar-raniry.
id/index.
php/samarah The Transformation of Gala and Mawah Wardiah Hamid, et.
DOI: 10.
22373/sjhk.
activity for many community members.
6 Similarly, in livestock-based mawah, the Acehnese have developed specific profit-sharing schemes.
The partnership formally begins when the livestock owner entrusts the animals to the caretaker.
There is no fixed duration for the mawah agreement, provided that the caretaker remains capable of properly maintaining the livestock.
Profit-sharing arrangements vary depending on whether the cattle are male or female, reflecting differences in productivity and economic value.
The mawah system offers a viable mechanism for improving community welfare, as it enables landless farmers to sustain their livelihoods and supplement household income.
8 Nevertheless, the implementation of mawah remains largely confined to traditional agricultural and livestock sectors.
It is predominantly informal in nature, lacks formal regulatory frameworks, and has not been optimally adapted for application in other sectors such as the creative economy, trade, or services.
9 More broadly, mawah represents a form of economic resource sharing between landowners and cultivators.
however, its practice continues to be limited to private arrangements and has not been institutionalized or widely scaled within the society.
Recognizing both the limitations and the latent potential of these traditional practices, initiatives have emerged to transform and empower local economic institutions.
In Southwest Aceh Regency (Abdy.
, one of the regions where gala and mawah traditions remain prevalent, an innovative institution known as the AuGala BankAy was established.
Founded around 2018Ae2019, the Gala Bank was designed to support economically disadvantaged farmers who are burdened by unfavorable traditional pawn arrangements.
The institution officially commenced operations in 2020 under the auspices of Baitul Qirat Gala Muamalah, a sharia-compliant savings and loan cooperative.
The Gala Bank implements sharia-compliant financing through two principal contractual arrangements: mudharabah, which provides profit-sharing schemes for farmersAo working capital, and rahn, a pawning mechanism in which Suhaimi.
Abdurrahman, and Ishak.
AuExistency Of Mawah (Product Shar.
Of Agricultural Land In A Traditional Law Society In Kuta Cot Glie Sub-District.
Aceh Besar District.
Ay Nelly Nelly et al.
AuThe Implementation Of Mawah Custom Process To Improve The Community Economy In Kuta Baro Subdistrict Aceh Besar,Ay 2020.
Maksalmina Maksalmina.
AuMawah Practices in Aceh: Syariah Legitimacy Based on Fatwas and Islamic Jurisprudence,Ay Al-Mustashfa: Jurnal Penelitian Hukum Ekonomi Syariah 9, 2 .
Mukhtasar Mukhtasar and Angga Syahputra.
AuOptimizing the Mawah Concept for the Economy of the Aceh Community,Ay IQTISHODUNA: Jurnal Ekonomi Islam 9, no.
Suhaimi.
Abdurrahman, and Ishak.
AuExistency Of Mawah (Product Shar.
Of Agricultural Land In A Traditional Law Society In Kuta Cot Glie Sub-District.
Aceh Besar District.
Ay.
Badruzzaman Ismail.
Ensiklopedia Budaya Adat Aceh (Banda Aceh: Majelis Adat Aceh, 2.
http://jurnal.
ar-raniry.
id/index.
php/samarah The Transformation of Gala and Mawah Wardiah Hamid, et.
DOI: 10.
22373/sjhk.
only the collateral is held while the rice fields remain under the management of the farmers.
This approach represents a significant departure from traditional gala practices, in which control over the pawned rice fields is transferred to the In contrast, the Gala Bank prioritizes farmers seeking to redeem their land from conventional gala arrangements.
Within the contemporary global development discourse, there has been a notable shift toward alternative development paradigms that emphasize sustainability, inclusivity, and sensitivity to local contexts.
In this regard, microfinance and sharia-based economic systems have emerged as effective instruments for community economic empowerment, particularly in poverty reduction initiatives and in supporting Micro.
Small, and Medium Enterprises (MSME.
11 IndonesiaAos extensive cultural diversity provides substantial opportunities to draw upon local wisdom as a foundation for innovative and contextually grounded economic models.
Local wisdom is increasingly understood not as a static relic of the past, but as a dynamic and strategic resource capable of adaptation to contemporary socioeconomic challenges.
Customary economic practices such as mawah in Aceh exemplify a hereditary, community-based economic system that has endured over time and embodies fundamental principles of social justice, solidarity, and mutual cooperation.
Alongside mawah, gala practices constitute an integral component of the traditional economic landscape of Acehnese society, although the two are grounded in fundamentally different philosophical principles and produce distinct socioeconomic implications.
6 Mawah is based on productive, cooperative profitsharing arrangements, whereas traditional gala operates as a pawning system that, in practice, often raises concerns regarding compliance with the Sharia This fundamental distinction provides a critical point of departure for the analysis undertaken in this study.
The establishment of the Sharia Financing Savings and Loans Cooperative (Koperasi Simpan Pinjam dan Pembiayaan Syariah.
KSPPS) Baitul Qiradh Gala Muamalah, commonly referred to as the AuGala BankAy in Southwest Aceh Regency (Abdy.
offers a compelling case study.
This initiative reflects both legal and social efforts to transform customary Carla Galluccio and Francesca Giambona.
AuCultural Heritage and Economic Development: Measuring Sustainability over Time,Ay Socio-Economic Planning Sciences 95 .
Luis Cysar Herrero-Prieto.
AuCultural Heritage.
Creativity and Economic Development,Ay Regional Studies 54, no.
Harriet Jane Deacon.
AuCultural Heritage.
Creativity and Economic Development,Ay Cultural Trends 29, no.
Sugeng Sugeng et al.
AuStrengthening Sharia Microfinance Regulations And Business Models In Indonesia,Ay Jurnal Hukum Dan Peradilan 13, no.
Rusjdi Ali Muhammad and Dedy Sumardi.
Kearifan Tradisional Lokal: Penyerapan Syariat Islam Dalam Hukum Adat Aceh (Banda Aceh: Dinas Syariat Islam Aceh, 2.
http://jurnal.
ar-raniry.
id/index.
php/samarah The Transformation of Gala and Mawah Wardiah Hamid, et.
DOI: 10.
22373/sjhk.
economic practices into a modern microfinance institution that is structured, measurable, and aligned with Sharia principles.
These developments prompt broader questions regarding how local traditions, such as gala and mawah, can be preserved and strengthened as the foundations of a sustainable, heritage-based economy.
Culture-based economic theory emphasizes that culture, including traditions and local wisdom, possesses intrinsic economic value capable of enhancing community welfare and reinforcing social cohesion.
Empirical evidence suggests that the Cultural Development Index positively correlates with the Human Development Index, underscoring the importance of integrating heritage-based activities into economic development strategies.
Such an approach places local communities at the center of development while leveraging social capital as a key resource.
Nonetheless, limited governmental attention to the systematic management and development of these local traditions remains a significant challenge.
This study focuses on the gala and mawah practices as implemented by communities in Southwest Aceh Regency.
Aceh Province.
In this region, these traditions continue to be preserved and function as everyday financial mechanisms within local society.
Notably, the gala tradition has undergone institutional transformation, culminating in the establishment of a formal financial entity known as the Gala Bank.
This research examines the gala and mawah practices observed among the people of Southwest Aceh Regency.
Aceh Province.
The local community continues to maintain and preserve these traditions as everyday financial Notably, the gala practice has evolved into a formalized financial institution known as Gala Bank.
This study investigates the role of the gala and mawah traditions as foundational components of a heritage-based economy.
Data were collected through participant observation and in-depth interviews with traditional leaders, community figures, and government officials, as well as through the analysis of relevant documents.
The Historicity of Gala and Mawah in Acehnese Custom The Acehnese people have a long history of engagement in diverse forms of economic activity that predates the emergence of modern transactional Within this historical context, two distinctive practices, gala and mawah, have become deeply embedded in the economic and social life of Acehnese Nurlina and Iskandar Muda.
AuThe Analysis of the Effects of Capital Expenditure and Human Development Index on Economic Growth and Poverty in East Aceh Regency,Ay International Journal of Economic Research 14, no.
Siectio Dicko Pratama and Rizal Rahadiana.
AuMultidimensional Poverty and Its Effect on the Economy of Aceh Province,Ay Bappenas Working Papers 6, no.
Azharsyah Ibrahim.
AuIndonesian Horizons in Islamic Finance: Navigating Risk.
Innovation, and Social Impact,Ay Share: Jurnal Ekonomi Dan Keuangan Islam 13, no.
http://jurnal.
ar-raniry.
id/index.
php/samarah The Transformation of Gala and Mawah Wardiah Hamid, et.
DOI: 10.
22373/sjhk.
These long-standing practices reflect local adaptation and indigenous wisdom in addressing economic needs across various sectors, including trade, agriculture .
articularly rice fields and dry field.
, and animal husbandry.
Gala has been known and practiced among the Acehnese since at least the eighteenth century.
In essence, a gala refers to a pawning system that emerged as a community-based response to persistent economic hardship.
The motivations for engaging in gala are diverse and closely linked to immediate financial One principal motivation is the provision of business capital, through which income generated from economic activities may be used to repay debts.
However, despite its potential as a productive financial mechanism, empirical observations indicate that gala is predominantly utilized to meet consumptive rather than productive needs.
These consumptive needs include the financing of education, healthcare, housing construction, and family ceremonies such as weddings.
Education, in particular, is widely regarded in Aceh as a fundamental obligation for every child, irrespective of household economic conditions.
consequently, gala often serves as an alternative means of funding educational expenses.
In addition, gala is frequently employed to finance major life-cycle events, including weddings, circumcision ceremonies, and funerals.
Such practices have become deeply ingrained in Acehnese cultural life, where individuals often make considerable efforts to secure the necessary funds, commonly by pawning assets to relatives, friends, or family members, to ensure that these events proceed in accordance with social expectations.
In practice, a gala involves borrowing capital by using oneAos possessions as collateral, which may include movable or immovable assets such as rice fields, gold, houses, and vehicles.
This mechanism is often preferred because it is perceived as more practical and expedient than obtaining loans from banks, which typically involve lengthy and complex procedures.
The speed and accessibility of gala make it particularly attractive to individuals with urgent financial needs.
However, despite its apparent convenience, the traditional gala practice in Aceh presents significant challenges and, in some cases, conflicts with Islamic A primary concern arises from the management of mortgaged assets.
Under the conventional gala system, the pawnbroker, often referred to locally as a tengkulak, assumes control over the collateral and retains its proceeds.
For Denys Lombard.
Le Sultanat dAoAtjyh Au Temps dAoIskandar Muda, 1607-1636 (Paris :
EAcole francaise dAoExtreCme-Orient, 1.
Christiaan Snouck Hurgronje.
Aceh: Adat Istiadatnya (Jakarta Indonesia: Indonesian Netherlands for Islamic Studies, 1.
Anthony Reid.
AuWar.
Peace and the Burden of History in Aceh,Ay Asian Ethnicity 5, no.
Fakhriati Fakhriati.
AuIndians Hybrid Communities in Aceh,Ay in Proceedings of the 9th Asbam International Conference (Archeology.
History, & Culture In The Nature of Mala.
(ASBAM 2.
, 2022.
Jajat Burhanudin.
AuIslamic Turn in Malay Historiography: Bustan AlSalatin of 17thCentury Aceh,Ay Studia Islamika 28, no.
http://jurnal.
ar-raniry.
id/index.
php/samarah The Transformation of Gala and Mawah Wardiah Hamid, et.
DOI: 10.
22373/sjhk.
instance, if a rice field is mortgaged, the pawnbroker cultivates the land and enjoys the harvest during the mortgage period.
This arrangement is problematic from an Islamic legal perspective, which stipulates that ownership and control of an asset must remain with its rightful owner.
Consequently, traditional gala has been criticized for its exploitative nature, sometimes likened to ijon .
llegitimate deb.
and, in certain cases, considered even more predatory than conventional loan sharking.
The negative consequences of the traditional gala .
system are acutely experienced by the community.
One of the most significant impacts is the reduction in the pawnerAos income from rice cultivation while the land remains Since rice paddies constitute the primary means of production and livelihood for rural communities, the temporary loss of the right to cultivate them directly diminishes farmersAo capacity to meet daily needs and repay their debts.
In such circumstances, farmers, such as Mr.
Suadi, are often compelled to seek employment elsewhere or request assistance from relatives in order to settle loans, as the pawnbroker assumes control over their rice fields.
This situation frequently leads to permanent loss of ownership when pawners are unable to redeem or repay the loan.
Consequently, many community members have lost their rice paddies to pawnbrokers, a pattern that has persisted For example, during the 1977 famine in South Aceh, failed rice harvests left farmers unable to repay debts, resulting in the transfer of land ownership to lenders.
While traditional gala may serve as a temporary solution in times of economic hardship, its overall impact on improving community welfare has been limited, and in many instances, it has led to further financial losses.
Traditional gala practices are generally informal, often lacking formal written agreements and relying instead on receipts and the acknowledgment of the Keujrueng Blang .
raditional rice field leade.
or Keuchik .
illage hea.
The Keujrueng Blang plays a critical role in regulating gala transactions, ensuring proper management of the rice fields, and monitoring land use.
However, if a gala transaction is not reported to the Keujrueng Blang, the leader assumes no responsibility for the arrangement.
Historically, despite its exploitative potential, gala held considerable social value, as the abundance of land allowed landless individuals to cultivate othersAo fields.
Over time, however, as land became Interview with Su'aidi.
Rice Farmer.
Pawoh Village.
Susoh District.
Southwest Aceh Regency.
June 24, 2025.
Interview with Muhammad Nasir.
Traditional Leader of Suak Bakung Village.
South Aceh.
June 22, 2025.
Interview with Miswar.
Traditional Leader of Air Pinang Village.
South Aceh.
June 22, 2025 http://jurnal.
ar-raniry.
id/index.
php/samarah The Transformation of Gala and Mawah Wardiah Hamid, et.
DOI: 10.
22373/sjhk.
increasingly scarce and social dynamics evolved, gala gradually assumed a more negative role, with monetary lenders gaining disproportionate power.
In contrast, mawah is a longstanding custom in Aceh, dating back to the sixteenth century, and functions as a model of cooperative access to capital.
The success of mawah is closely linked to Acehnese cultural values of mutual assistance and community solidarity, which are deeply intertwined with respect for Islamic principles.
In essence, mawah, literally meaning Auprofit-sharingAy in Indonesian, represents a collaborative economic arrangement that allows landless or resource-limited individuals to engage in productive agricultural and livestock activities while sharing the resulting benefits.
The practice of mawah, often referred to as agricultural bondageAiis particularly prevalent in rice field management, reflecting the large number of farmers in Aceh who do not own land.
Many of these farmers cultivate rice fields owned by others under various mawah arrangements.
Beyond agriculture, mawah is also practiced in the livestock sector, involving animals such as cattle, buffalo, oxen, and goats.
Several common mawah schemes exist between farmers and landowners.
In one arrangement, the farmer rents the land from the owner and pays a portion of the harvest as rent.
In another, the landowner compensates the farmer with a wage for labor, while in some cases, the landowner entrusts the land entirely to the farmer, with both harvest and production costs shared according to a mutually agreed contract.
These agreements can be highly specific, stipulating, for example, the number of coconut trees planted or the precise distribution of produce after harvest or fruiting.
In livestock-based mawah, profit-sharing is generally determined by the sex of the animal.
For instance, if a cattle owner entrusts livestock for rearing, the profits from bulls and heifers are divided differently.
However, this system is not without challenges.
for example, if a buffalo produces only one calf, complications may arise in determining an equitable distribution of profits.
Mawah serves as an important mechanism for enhancing community livelihoods, particularly for landless farmers.
Through mawah, farmers are able to continue cultivating rice fields for their subsistence, thereby increasing their Interview with Syaiba Ibrahim.
Chairperson of the Aceh Traditional Council.
Southwest Aceh Regency.
June 25, 2025.
Interview with Ishak.
Customary Advisor of the Aceh Traditional Council.
Southwest Aceh Regency.
June 25, 2025.
Rusjdi Ali Muhammad.
AuReconciliation for the Settlement of Criminal Cases:
Reactualization of Local Wisdom in Indonesian Criminal Law [Upaya Perdamaian Untuk Penyelesaian Perkara Pidana: Reaktualisasi Kearifan Lokal Dalam Hukum Pidana Indonesi.
,Ay Legitimasi: Jurnal Hukum Pidana Dan Politik Hukum 10, no.
2 (November 19, 2.
, p.
Interview with Hamdani, a community leader from Meukuta Village.
Southwest Aceh.
June 23, 2025 Interview with Miswar, a member of the Aceh Traditional Council.
Southwest Aceh Regency.
June 25, 2025 http://jurnal.
ar-raniry.
id/index.
php/samarah The Transformation of Gala and Mawah Wardiah Hamid, et.
DOI: 10.
22373/sjhk.
potential income, which grows proportionally with the number of mawah arrangements they participate in.
In this sense, mawah also functions as a supplementary economic activity, providing communities with an additional source of income.
The system relies heavily on trust and the deeply ingrained culture of mutual cooperation .
otong royon.
within Acehnese society.
Despite its potential, the practice of mawah faces several limitations.
Its application remains largely confined to the agricultural and livestock sectors and has not been extended to other areas of economic activity.
As a traditional system, it encounters various practical challenges and has not yet been fully optimized.
Furthermore, mawah continues to operate informally, limited to the private sphere, and lacks formal regulation or widespread institutional support.
This indicates that mawah has not been integrated into the modern economic system and largely functions outside formal structures, such as the Gala Bank, which specifically targets rice farmers.
To provide a clearer perspective, the traditional Acehnese practices of mawah and gala can be compared as follows.
Criteria Definiton Basic Principles of Productive Cooperation Nature of Transaction Main Object Profit Sharing Scheme Roles of the Parties Main Risks Mawah A cooperative agreement for the management of productive assets, operating under a profitsharing system.
Sharing of profits and risks .
rofit-and-loss sharin.
Tradtitional Gala .
A loan agreement in which assets are provided as collateral Investment and business Productive assets such as rice fields, gardens, livestock, fish ponds, and boats Profit-sharing .
according to a flexible agreement .
, 1:1, 1:2, 2:.
Debt and receivables Capital owner .
hahibul ma.
and manager ('ami.
both are Business risks .
, crop failure, livestock deat.
are shared according to the capital/agreement portion http://jurnal.
ar-raniry.
id/index.
php/samarah Loans secured by collateral .
ebt with Valuable assets, typically land or gardens, used as No profit sharing.
pledgee retains the collateral as profit on the Lender/pledgee .
and borrower/pledgee .
Risk of borrower default.
potential exploitation of the borrower The Transformation of Gala and Mawah Wardiah Hamid, et.
DOI: 10.
22373/sjhk.
Sharia Compliance Fully compliant.
aligns with Mudharabah.
Musyarakah, and Muzara'ah principles.
free from usury .
and excessive uncertainty .
Problematic.
suspected of containing usury due to lender control over collateral Source: Results of the Research TeamAos Elaboration The practices of gala and mawah exemplify the spectrum of traditional economic activities in Aceh.
While mawah reflects cooperative principles rooted in mutual assistance and risk-sharing, traditional gala tends toward exploitative outcomes, particularly in cases where borrowers lose control of their collateral.
Both systems illustrate local wisdom in addressing economic needs.
gala demonstrates the urgent need for transformation to align with ethical, religious, and community-oriented values, as exemplified in modern initiatives such as the Gala Bank.
Transforming Gala and Mawah Through the KSPPS Baitul Qiradh "Gala Bank" in Southwest Aceh Given the significant problems associated with traditional gala practices, particularly their detrimental effects on community welfare and their conflict with Sharia principles, there is an urgent need for transformation.
While a shift away from traditional gala has occurred in some urban areas, where modern financial institutions such as banks and official pawnshops are preferred, rural regions like Southwest Aceh Regency (Abdy.
continue to experience the persistence of traditional gala, often resulting in economic hardship for local farmers.
response to this challenge, the Gala Bank initiative offers an innovative solution aimed at Aueradicating harmful practicesAy that conflict with Sharia law.
The Gala Bank program was initiated by the former Regent of Abdya.
Mr.
Akmal Ibrahim, and Deputy Regent Mudzizar MT.
It began in 2017 and was formally established in 2020 as a cooperative under the official name Baitul Qiradh Gala Muamalah Sharia Financing Savings and Loan Cooperative.
The primary objective of the program is to assist economically disadvantaged farmers in Southwest Aceh who are burdened by mortgage debts.
By formalizing a traditional, culture-based economic practice, the Gala Bank seeks both to support local livelihoods and to eliminate harmful practices that conflict with Sharia Priority is given to farmers wishing to redeem their rice fields from the constraints imposed by traditional mortgage arrangements.
The fundamental and transformative distinction between Gala Bank and traditional gala mortgages lies in its strict adherence to Sharia principles.
The Gala Bank operates primarily through two Sharia-compliant contracts:
rofit-sharin.
and rahn (Sharia mortgag.
, both of which are reviewed and supervised by a Sharia Supervisory Board.
http://jurnal.
ar-raniry.
id/index.
php/samarah The Transformation of Gala and Mawah Wardiah Hamid, et.
DOI: 10.
22373/sjhk.
Several key differences distinguish Gala Bank from conventional gala First, regarding collateral control: in traditional gala, the lender .
ften a middlema.
assumes full control over the collateralized rice fields and collects the resulting proceeds.
In contrast, the Gala Bank retains only the legal documentation .
ertificates or deed.
, while the rice fields remain under the management of the farmers, their rightful owners.
22 This arrangement is critical, as it allows farmers to continue cultivating their land, maintain employment, and benefit from the full harvest, thereby protecting their primary source of income throughout the loan period.
Second, the Gala Bank provides interest-free loans, avoiding the practice of usury .
inherent in conventional gala loans and ensuring compliance with Islamic financial principles.
Third, the repayment system is straightforward and based on profit-sharing.
financing is repaid in installments according to the mudharabah agreement.
Experiences of customers such as Mr.
SuAoaidi suggest that this system does not impose a significant burden on farmers.
As he explained in an interview:
It's not easy anymore, but it really feels manageable.
we just pay rent.
borrowed IDR 10 million and repaid IDR 2.
5 million per harvest for five harvests, totaling IDR 12.
5 million.
Although there was a slight surplus over the principal, it felt almost like free money or simply rent, because I still received the entire harvest .
or example.
IDR 15 million per harves.
, while Bank Gala's share (IDR 2.
5 millio.
was relatively small compared to my net profit The Gala Bank had a substantial positive impact on the community of Abdya.
The program provides critical assistance to underprivileged farmers burdened by debt, enabling victims of traditional gala practices to redeem their land and resume cultivation.
23 By implementing a Sharia-compliant financial model, the Gala Bank transforms exploitative practices rooted in usury into ethically and religiously aligned mechanisms, thereby addressing harmful financial behaviors embedded in the community.
To date, more than 120 customers have benefited from the program, with over 60% successfully repaying their loans.
The Gala Bank is widely recognized as the only financial institution in Abdya specializing in debt relief and financing tailored specifically for Interview with Salman.
Director of Bank Gala.
Southwest Aceh Regency.
June 26.
Interview with Mukhlis.
Head of Ladang Tuha II Village.
Southwest Aceh Regency.
June 20, 2025 Interview with Salman.
Director of Bank Gala.
Southwest Aceh Regency.
June 26, http://jurnal.
ar-raniry.
id/index.
php/samarah The Transformation of Gala and Mawah Wardiah Hamid, et.
DOI: 10.
22373/sjhk.
In parallel, the Abdya Regency Government initiated the Red and White Cooperative program to further strengthen the local economy.
This initiative aims to provide farmers with affordable access to capital and fertilizers while breaking the cycle of exploitation by middlemen who charge excessive interest.
The program represents a top-down effort to establish legally incorporated cooperatives across 152 villages, with the goal of aligning economic development with local cultural values and improving community welfare.
25 Discussions are ongoing regarding the potential integration of Gala BankAos Sharia-compliant financing model into the Red and White Cooperative framework, reflecting the governmentAos interest in leveraging local wisdom to support sustainable community economic activities.
In summary, the transformation of traditional gala through Gala Bank exemplifies how indigenous economic practices can be adapted within a modern Sharia framework to empower communities and mitigate harmful financial Although its application has not yet extended to the mawah sector, the success of the Gala Bank demonstrates that culture-based microfinance models can generate substantial positive impacts when supported with adequate institutional backing and sustainability measures.
Conclusion The practices of mawah and gala represent two indigenous economic systems that are conceptually and philosophically distinct.
Mawah constitutes a productive, equitable, profit-sharing cooperative model inherently aligned with Islamic jurisprudential principles, such as Mudharabah and Musyarakah.
contrast, traditional Gala, which permits the lender to utilize collateral, has been widely critiqued for potentially incorporating elements of usury and generating inequitable outcomes.
This fundamental divergence underscores the necessity for any revitalization effort to carefully distinguish, reform, and strategically integrate these two systems.
The "Gala Bank" initiative in Southwest Aceh exemplifies a sophisticated socio-financial innovation.
By employing a hybrid contractual framework that combines Rahn (Sharia-compliant paw.
and Mudharabah .
rofit-sharin.
agreements, it achieves two critical objectives: .
reforming the Gala practice by removing usurious elements and restoring its original function as collateral.
institutionalizing the cooperative and equitable spirit of Mawah within a productive and scalable financing structure.
The decision to retain the "Gala" name while embedding the essence of Mawah serves as an effective cultural branding strategy, ensuring community acceptance and legitimacy.
The sustainability of a model such as "Gala Bank" relies heavily on a robust supporting ecosystem and its capacity to navigate a complex Interview with Zedi.
Head of the Department of Industry and Cooperatives and Head of the Economic Subdivision of Abdya Regency.
June 19, 2025.
http://jurnal.
ar-raniry.
id/index.
php/samarah The Transformation of Gala and Mawah Wardiah Hamid, et.
DOI: 10.
22373/sjhk.
regulatory environment.
Active collaboration with local government, academia, and the private sector generates essential synergy.
Nonetheless, as a formal institution, it must comply with governance, risk management, and regulatory standards set by authorities such as the Financial Services Authority (OJK) and the Ministry of Cooperatives and SMEs.
More than a microfinance institution, "Gala Bank" represents an experiment in cultural recontextualization, demonstrating that local wisdom is not a static relic of the past, but a dynamic foundation for developing equitable and sustainable economic solutions.
Its longterm success will be measured not solely by financial performance, but by its ability to balance profitability, community empowerment, and the preservation of the cultural values that underpin its establishment.
References