Sharia Fintech as an Alternative to MSME Financing Based on Islamic Ethics

Abstract

This study aims to explore the role of sharia fintech as an alternative financing for Micro, Small, and Medium Enterprises (MSMEs) in Indonesia. Using qualitative and quantitative approaches, this study analyzes how sharia-based financial technology can increase financial inclusion for MSMEs, which is one of the main pillars of the Indonesian economy. The results of the study show that sharia fintech can expand access to financing for MSMEs in a way that is in accordance with sharia principles, such as avoiding the practice of riba and gharar, and offering profit-sharing-based financing solutions. However, the challenges faced include inadequate regulations and the need to increase digital literacy among MSME actors. The implications of this study suggest the need for a clear regulatory framework and education for MSMEs to maximize the potential of sharia fintech.