Enhancing the MSME Islamic financial inclusion in Indonesia: an institutional theory perspective
The concept of financial inclusion is a complex problem, and it was constructed by several aspects ranging from socio-cultural, psychological, economic, geographical and political issues. Financial inclusion under the conceptualisation of institutional theory highlights the role of institutions in...
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Main Authors: | , |
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Format: | Article |
Language: | English |
Published: |
North American Business Press
2023
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Subjects: | |
Online Access: | http://irep.iium.edu.my/110251/7/110251_Enhancing%20the%20MSME%20Islamic%20financial.pdf http://irep.iium.edu.my/110251/ https://articlegateway.com/index.php/JAF/article/view/6042 https://doi.org/10.33423/jaf.v23i2.6042 |
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Summary: | The concept of financial inclusion is a complex problem, and it was constructed by several aspects ranging
from socio-cultural, psychological, economic, geographical and political issues. Financial inclusion under
the conceptualisation of institutional theory highlights the role of institutions in active markets, government,
communities and societies in explaining the financial exclusion phenomenon, emphasising its vital position
as the component in influencing the realisation of financial inclusion. By implementing this theory, the main
objective of this study is to examine and identify the roles of involved institutions as a critical determining
factor to attain Islamic financial inclusion for the Micro, Small, and Medium-sized Enterprise (MSME)
sector in Indonesia by incorporating the notion of “Institutional Isomorphism” in their operation. This
study suggests that by integrating the institutional pressure in the institutional environment of the three
involving sectors, namely: The public sector, Islamic financial services providers and the MSMEs industry,
this system will intensify the chance of the MSMEs sector in embracing Islamic financial inclusion, improve
their productivity, and contribution to Indonesia’s sustainable economy. |
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