Rural poverty in Indonesia and Islamic economic as a sustainable solution

Based on the preliminary research about household poverty in rural area of West Kalimantan in 2016, we found that working days, age and loan gave significant effect to the rural poverty. Therefore, the aim of this paper is to examine the solution of reducing poverty rate in the rural area through Islamic economic concept. In Islamic economic approach, poverty is not merely caused by material aspect but also moral/ spiritual aspect. Thus, this explanatory research used elaboration of Islamic Economic theory on both aspects to improve well-being in rural society. The Ibnu Khaldun‟s dimension of poverty and the axiomatic approach are used to modify the sustainable livelihood framework into Islamic economic sustainable livelihood framework. The paper found that to reduce the poverty rate in rural area, development of man and his moral aspect should be emphasized and the establishment of Islamic Microfinance as a free interest institution in rural area must be developed.