Abstract. The sharia label cannot guarantee an institution can be free from fraud including the Islamic Microfinance Institution (IMFI). Though IMFI has become part of the da'wah about the Islamic economy and usury-free service providers for the community. Therefore, taking efforts to prevent fraud to preserve IMFI is very important. This paper offers a new model of fraud prevention through strengthening internal control systems (ICS), selective HR recruitment processes, and developing Islamic human capital (IHCD) to maintain IMFI's financial performance. In addition to strengthening the control system, prevention efforts have now shifted towards human development. The Islamic values approach to human development will form superior HR with Faith (devotion to Allah), knowledge (knowledge of risk management), and good behavior (Akhlak).

Keywords: IMFI,  Fraud Prevention, Internal Control System, Islamic Human Capital Development