ROLE OF SYARIAH MICROFINANCE INSTITUTION FOR STRENGTHENING MICRO,SMALL AND MEDIUM ENTERPRISES (SME) Dewi Cahyani Puspitasari,S.Sos,MA ABSTRACT The application of financial inclusive policy was expected by many parties to be a financial service which aimed to increase the access to economic development and poverty alleviation in Indonesia. Various dynamics and problems in the implementation of a financial policy demands a synergy by involving all stakeholders, either the government or private, and also syariah micro financial institution (LKMS). The existence of SME and financial inclusive policy gives a chance to overcome the unbanked people problem caused by the limited distribution agency of financial services. The interesting thing which was studied by the writer is the role of lkms for business agents. One of the business agents was facilitated by baitul maalwat tamwil (BMT) in the provision of financial services supported the improvement and development of business. The facilitation provided by BMT was not only given in the operational fund level, but also the funding consultation, management and marketing support. Thus, BMT has strategic role, especially in developing economy business for entrepreneurs to produce msmes through investment activities. It could be done by asking the people to save so the money might be amenable for financial savings. 0