The purpose of this chapter is to analyze the impacts of COVID-19 on Islamic Finance and particularly on Islamic banks and Islamic Microfinance Institutions (IMFIs) in Indonesia. The content analysis with secondary data is used to elaborate the impact of COVID-19 to Islamic finance in general and the Focus Group Discussion (FGD) was conducted to the selected Islamic Microfinance stakeholders which are registered in the Ministry of Cooperatives and SMEs in Indonesia to derive their inferences on the impacts of the Coronavirus Pandemic on Islamic Microfinance Institutions in Indonesia. In general, the Islamic financial institutions are affected tremendously by this COVID-19 pandemic particularly the Islamic banks and IMFIs in Indonesia. Since micro, small and medium enterprises (MSMEs) are the majority of Islamic Microfinance Institutions’ clients, all forms of IMFIs in Indonesia namely Baitul Mal Wattamwil (BMT), Bank Wakaf Mikro (BWM), and Islamic rural bank (BPRS) are affected in terms of liquidity, asset quality, operational activities, and profitability by the outbreak of COVID-19. Many MSMEs that are mostly dependent on daily cash to run their operation are no longer in the business due to large scale of social restrictions applied in many areas across Indonesia. This study is the first of its kind and the insights were taken directly from those are involved in the management of IMFIs.