Valley International Journal Digital Library

VIJ Digital library
Articles

Financial Inclusion through Islamic Microfinance: Empirical Evidence from Developing Countries

PDF
  • Muhammad Syahrul Hidayat,
  • Nurul Mazidah,
  • Didik Supardana Setia Aksana,
  • Nurhayati
Muhammad Syahrul Hidayat
State Islamic University of Sunan Ampel Surabaya
Bio
Nurul Mazidah
State Islamic University of Sunan Ampel Surabaya
Didik Supardana Setia Aksana
State Islamic University of Sunan Ampel Surabaya
Nurhayati
State Islamic University of Sunan Ampel Surabaya
Published in : International Journal of Scientific Research and Management (IJSRM) , Vol. 11 No. 11 (2023)

Submission to VIJ 2023-11-10

Keywords

  • Financial Inclusion, Islamic Microfinance

Copyright (c) 2023 Muhammad Syahrul Hidayat, Nurul Mazidah, Didik Supardana Setia Aksana, Nurhayati

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

This study explores the important role played by Islamic microfinance in promoting financial inclusion in developing countries. Using empirical evidence, this research shows how Islamic microfinance institutions have helped in reducing poverty and improving the economic welfare of underprivileged communities. Through secondary data analysis and case studies, this research highlights how sharia economic principles such as the prohibition of riba (interest) and the emphasis on asset-based contracts have facilitated access to financial services for individuals previously underserved by conventional financial institutions. This research also discusses the challenges faced by the Islamic microfinance sector and provides recommendations for the future

PDF

References

  1. Amijaya, Rachmania Nurul Fitri. 2019. “Pengaruh Inklusi Keuangan Terhadap Pertumbuhan Ekonomi Di Negara Organisasi Kerjasama Islam (Oki).”
  2. Anon. 2015. “Islamic Microfinance.” Islamic Finance : Instruments and Markets (February). doi: 10.5040/9781472920379.0039.
  3. Ascarya, A., and A. Sakti. 2022. “Designing Micro-Fintech Models for Islamic Micro Financial Institutions in Indonesia.” doi: 10.1108/imefm-05-2020-0233.
  4. Ayu, Fuis Sukma, and Dian Filianti. 2022. “Determinants of Financial Inclusion Information Disclosure of Islamic Rural Banks in Indonesia.”
  5. Azrak, Tawfik, and Muzamil Edema. 2022. “The Role of Islamic and Conventional Microfinance in Tackling Financial Exclusion in Bangladesh, Nigeria, and Uganda.” Shirkah: Journal of Economics and Business 7(2):113–23. doi: 10.22515/shirkah.v7i2.478.
  6. Darmawan, Andre Pupung, A. Erlando, Dwi Budi, and Santoso. 2023. “Examining an Islamic Financial Inclusivity and Its Impact on Fundamental Economic Variables in Indonesia (An Approach of Static Panel Data Analysis).”
  7. Eldomiaty, Tarek, Rasha Hammam, and Rawan El Bakry. 2020. “Institutional Determinants of Financial Inclusion: Evidence from World Economies.” International Journal of Development Issues 19(2):217–28.
  8. Fahlevi, Mochammad, and Annuar Md Nassir D. O. 10. 1080/23322039. 2023. 220296. E. R. -. n.d. “No Title.”
  9. Ginanjar, Adhitya, and Salina Hj Kassim. 2021. “Roles of Islamic Microfinance Institutions in Improving Financial Inclusion in Indonesia: Empirical Evidence from Baitulmaal Wa Tamwil.” Al-Iqtishad: Jurnal Ilmu Ekonomi Syariah 13(1):87–108. doi: 10.15408/aiq.v13i1.19842.
  10. Gortsos, Christos V, and Vasilis Panagiotidis. 2017. “Financial Inclusion: An Overview of Its Various Dimensions and Its Assistance in Reducing Private Sector Insolvency.” Pp. 363–93 in Financial Inclusion: An Overview of Its Various Dimensions and Its Assistance in Reducing Private Sector Insolvency. Springer International Publishing.
  11. Hassan, M. Kabir, Ammar Jreisat, Mustafa Raza Rabbani, and Somar Al-Mohamed. 2022. “Islamic Fintech and Bahrain: An Opportunity for Global Financial Services.” FinTech in Islamic Financial Institutions 65–87. doi: 10.1007/978-3-031-14941-2_4.
  12. Hassouba, Taghreed Abdelaziz. 2023. “Financial Inclusion in Egypt: The Road Ahead.” Review of Economics and Political Science. doi: 10.1108/REPS-06-2022-0034.
  13. Hejazziey, Djawahir. 2015. “THE ESTABLISHMENT OF ISLAMIC BANKING LAW IN POLITICAL PERSPECTIVE.”
  14. Herispon, Herispon. 2019. “PENDEKATAN INKLUSI KEUANGAN DAN TEORI PERILAKU TERENCANA DALAM ANALISIS PERILAKU UTANG.”
  15. Hudaefi, Fahmi Ali. 2020. “How Does Islamic Fintech Promote the SDGs? Qualitative Evidence from Indonesia.” doi: 10.1108/qrfm-05-2019-0058.
  16. Jayanthi, M., and S. S. Rau. 2017. “Financial Inclusion in India.” International Journal of Applied Business and Economic Research 15(22):11–16. doi: 10.12724/ajss.53.3.
  17. Jones, L. 2018. “Guest Editorial: Poverty Reduction in the FinTech Age.” doi: 10.3362/1755-1986.2018.29-2.ED.
  18. Kanta. n.d. “Financial Inclusion Perspective of Reserve Bank of India.”
  19. Mandira Sarma, Jesim Pais. 2011. “Financial Inclusion and Development.” Pp. 613–28 in Challenges in Economic and Financial Policy Formulation. Palgrave Macmillan.
  20. Mehboob ul-Hassan, and M. Usman. n.d. “Building the Entrepreneurship Through Non -Banking Institution: An Empirical Study on the Contribution of GEAR for Economic Development in Islamic Way.”
  21. Ozili, Peterson K. 2023. “Can Social Inclusion Policies Promote Financial Inclusion?” International Journal of Sociology and Social Policy (116971). doi: 10.1108/IJSSP-03-2023-0054.
  22. Pati, U., Pujiyono Pujiyono, and Pranoto Pranoto. 2021. “Sharia Fintech as a Sharia Compliance Solution in the Optimization of Electronic-Based Mosque’s Ziswaf Management.” doi: 10.22304/PJIH.V8N1.A3.
  23. Pu, Ruihui, D. Teresienė, Ina Pieczulis, Jie Kong, and Xiao-Guang Yue. 2021. “The Interaction between Banking Sector and Financial Technology Companies: Qualitative Assessment—A Case of Lithuania.” doi: 10.3390/RISKS9010021.
  24. Sari, Elizabeth Amelia Permata. 2022. “Peran Fintech Syariah Dalam Ekonomi Islam Di Indonesia.” Prosiding National Seminar on Accounting, Finance and Economics (NSAFE) 2(2):122–32.
  25. Sari, yunita resmi, Ika Tejaningrum, Asep Ramdan, Hamidatul Imamah, and dara ayu Lestari. 2016. “Kajian Peningkatan Akses Keuangan Kelompok Masyarakat Atau Pelaku Usaha Melalui Pemanfaatan Produk / Jasa Layanan Keuangan Syariah.” Indonesia Bank 1–82.
  26. Savaşan, Fatih, and Salih Ulev D. O. 10. 1016/j. bir. 2023. 01. 01. E. R. -. n.d. “No Title.”
  27. Sen, G. 2019. “Gender Equality and Women’s Empowerment: Feminist Mobilization for the SDG S.”
  28. Soemitra, Andri. 2018. Peran Pemberdayaan Masyarakat Oleh Lembaga Keuangan Mikro Syariah Dalam Perspektif Sustainable Development Goals (SDGs).
  29. Sugiyono. 2017. Metode Penelitian Kuantitatif, Kualitatif, Dan R&D. Bandung : Alfabeta, CV.
  30. Tajamul Khurshid Bhat, and Imtiyaz Hussain Ganaie. n.d. “Financial Inclusion: A Primary Study on District Anantnag with Special Reference to J&K Bank.”
  31. Widyandri, Dahayu Bethari, and Nisfu Laila. 2022. “ANALISIS PENGARUH MOBILE BANKING DAN KEUANGAN INKLUSIF TERHADAP KINERJA KEUANGAN BANK SYARIAH DI INDONESIA PERIODE 2014-2019.”
  32. Yusop, Zulkornain, and Muzafar Shah Habibullah D. O. 10. 1108/ijoe. 11-2021-1751 E. R. -. n.d. “No Title.”
  33. Zitouni, Takwa, and Khoutem Ben Jedidia. 2022. “Does Islamic Microfinance Contribute to Economic Empowerment in Tunisia?: A Case Study of Zitouna Tamkeen.” Journal of Business and Socio-Economic Development 2(1):67–81. doi: 10.1108/jbsed-10-2021-0143.
  34. Zulkhibri, Muhamed. 2016. “Financial Inclusion, Financial Inclusion Policy and Islamic Finance.” Macroeconomics and Finance in Emerging Market Economies 9(3):303–20.