The Role of Islamic Financial Technology in Reducing Economic Vulnerability in Indonesian Muslim Communities
Peran Teknologi Finansial Syariah dalam Mengurangi Kerentanan Ekonomi pada Masyarakat Muslim Indonesia
DOI:
https://doi.org/10.34306/al-waarits.v3i1.1006Keywords:
Sharia Fintech, Economic Vulnerability, Financial Inclusion, Home EconomicsAbstract
Digital transformation in the financial sector has accelerated the growth of Islamic financial technology (Islamic fintech) in Indonesia. This development is highly relevant as many Muslim communities continue to face economic vulnerability, including limited access to formal financing, low financial literacy, and unstable household income. Islamic fintech offers a strategic alternative by providing technology-based financial services while upholding Islamic principles of justice, ethics, and social welfare. This study examines the role of Islamic fintech in reducing economic vulnerability among Muslim communities in Indonesia. The analysis focuses on its contribution to improving financial inclusion, expanding access to affordable halal financing, and strengthening the economic resilience of vulnerable households. The study advances Islamic fintech literature by shifting the analytical focus from technology adoption and institutional aspects toward household-level economic vulnerability. A qualitative descriptive approach is employed through literature review, analysis of regulatory documents issued by the Financial Services Authority, industry reports, and an examination of Islamic digital financial practices, including sharia-compliant peer-to-peer lending, digital zakat and waqf platforms, and Islamic electronic wallets. The analysis integrates empirical insights with the maqāṣid al-sharīʿah framework. The findings indicate that Islamic fintech enhances access to financing for low-income groups, increases participation in the digital financial ecosystem, and promotes transparency and efficiency in managing religious social funds. The study concludes that Islamic fintech has strong potential to strengthen economic stability among Muslim communities in Indonesia, provided it is supported by improved digital literacy, effective regulation, and cross-institutional collaboration.
References
[1] I. Qizam, I. Berakon, and H. Ali, “The role of halal value chain, sharia financial inclusion, and digital economy in socio-economic transformation: a study of islamic boarding schools in indonesia,” Journal of Islamic Marketing, vol. 16, no. 3, pp. 810–840, 2025.
[2] F. Yusuf, R. Widayanti, S. R. Putri, and A. Wellington, “A comprehensive framework for enhancing blockchain security and privacy,” Blockchain Frontier Technology, vol. 4, no. 2, pp. 171–182, 2025.
[3] M. Y. Bahtiar, “Integrating islamic social finance and islamic fintech for household financial resilience in indonesia,” Journal of Islamic Economics and Finance, vol. 1, no. 2, pp. 84–96, 2025.
[4] A. Delhi and A. Sijabat, “The role of technology adoption in scaling startupreneur business models in the digital economy,” Startupreneur Business Digital (SABDA Journal), vol. 3, no. 2, pp. 141–147, 2024.
[5] A. Ascarya, “The role of islamic social finance during covid-19 pandemic in indonesia’s economic recovery,” International Journal of Islamic and Middle Eastern Finance and Management, vol. 15, no. 2, pp. 386–405, 2022.
[6] B. Sugiharto, H. Harkim, J. E. Pandiangan, and N. L. D. H. L. Gaol, “The role of islamic financial technology in strengthening msme resilience and ethical financing,” Golden Ratio of Auditing Research, vol. 6, no. 1, pp. 425–435, 2026.
[7] F. Rahardja, L. K. Choi, R. C. Wijaya, and R. A. Sunarjo, “Gamification in digital startups: Enhancing user engagement and business growth,” Startupreneur Business Digital (SABDA Journal), vol. 4, no. 1, pp. 1–11, 2025.
[8] I. Istianah and L. Nugroho, “Strengthening economic stability in muslim families: The role of islamic financial literacy post-covid-19,” Social and Economic Bulletin, vol. 1, no. 3, pp. 176–191, 2024.
[9] T. R. Nuryitmawan, “The impact of islamic fintech on poverty alleviation in indonesia: A socio-economic implications,” Airlangga Journal of Innovation Management, vol. 4, no. 2, pp. 136–146, 2023.
[10] A. Abudaqa and I. Noburu, “Optimizing digipreneurship in the growth of the digital millennial creative economy ecosystem,” Startupreneur Business Digital (SABDA Journal), vol. 4, no. 1, pp. 24–34, 2025.
[11] M. Said, A. N. D. Putra, M. Tahir, S. Selfiani, and A. H. Madi, “Enhancing islamic financial inclusion in indonesia: Innovative strategies for rural and eastern regions,” Priviet Social Sciences Journal, vol. 5, no. 12, pp. 220–232, 2025.
[12] A. A. Muhammad, A. Ibrahim, A. A. Yakub, H. Khan, and N. Hamzah, “The role of islamic finance in promoting economic justice and financial inclusion among marginalised communities,” Suhuf: International Journal of Islamic Studies, vol. 37, no. 1, 2025.
[13] I. M. Putri, D. P. Ramadhani, P. Indriyani, E. N. Aidah, and A. P. Cahyani, “Predictive analytics in attendance systems for employee productivity and accountability,” International Transactions on Education Technology (ITEE), vol. 3, no. 2, pp. 104–113, 2025.
[14] A. A. Najib, “The role of islamic financial literacy in strengthening socio-religious resilience among coastal women,” Dirosatuna: Journal of Islamic Studies, vol. 7, no. 1, pp. 78–98, 2024.
[15] S. Sahrani, D. Damirah, and W. Andika, “Financial literacy: Digital islamic finance in community economic development,” in Proceedings of the International Conference of Islamic Economics and Business (ICONIES), vol. 10, no. 1, 2024, pp. 879–888.
[16] O. Jayanagara and S. Watini, “The role of smart automation in tourism industry management using smart pls,” International Transactions on Artificial Intelligence, vol. 2, no. 1, pp. 7–23, 2023.
[17] V. R. P. Pratama, “Financial inclusion of muslim communities in indonesia,” The Es Accounting And Finance, vol. 4, no. 01, pp. 216–229, 2025.
[18] A. Ibrahim et al., “Indonesian horizons in islamic finance: Navigating risk, innovation, and social impact,” Share: Jurnal Ekonomi dan Keuangan Islam, vol. 13, no. 1, pp. vi–xi, 2024.
[19] N. P. L. Santoso, R. Nurmala, and U. Rahardja, “Corporate leadership in the digital business era and its impact on economic development across global markets,” IAIC Transactions on Sustainable Digital Innovation (ITSDI), vol. 6, no. 2, pp. 188–195, 2025.
[20] A. Shofawati, “The role of islamic fintech in indonesia to improve financial inclusion for resolving sdgs,” in Artificial intelligence, Fintech, and financial inclusion. CRC Press, 2023, pp. 112–134.
[21] S. Alhammadi, “Expanding financial inclusion in indonesia through takaful: opportunities, challenges and sustainability,” Journal of Financial Reporting and Accounting, 2023.
[22] U. Rahardja, C. T. Sigalingging, P. O. H. Putra, A. Nizar Hidayanto, and K. Phusavat, “The impact of mobile payment application design and performance attributes on consumer emotions and continuance intention,” Sage Open, vol. 13, no. 1, p. 21582440231151919, 2023.
[23] A. Hidayat, W. Akbar, M. Ardiansyah, and E. A. B. Ibrahim, “The impact of sharia economics on the vision of a golden indonesia 2045,” Jurnal Ilmu Ekonomi dan Bisnis Islam, vol. 6, no. 2, pp. 116–140, 2024.
[24] J. Siswanto, Hendry, U. Rahardja, I. Sembiring, E. Sediyono, K. D. Hartomo, and B. Istiyanto, “Deep learning-based lstm model for number of road accidents prediction,” in AIP Conference Proceedings, vol. 3234, no. 1. AIP Publishing LLC, 2025, p. 050004.
[25] H. H. Adinugraha, M. Shulhoni, and D. Achmad, “Islamic social finance in indonesia: Opportunities, challenges, and its role in empowering society,” Review of Islamic Social Finance and Entrepreneurship, pp. 45–62, 2023.
[26] M. Masrizal, R. Sukmana, and B. Trianto, “The effect of islamic financial literacy on business performance with emphasis on the role of islamic financial inclusion: case study in indonesia,” Journal of Islamic Marketing, vol. 16, no. 1, pp. 166–192, 2024.
[27] I. Geraldina, A. Muktiyanto, and U. Rahardja, “Boosting esg performance: Overcoming collusion among entrepreneurial family and institutional shareholders,” Aptisi Transactions on Technopreneurship (ATT), vol. 7, no. 1, pp. 48–60, 2025.
[28] H. Hamzah and A. Yudiawan, “The contribution of infaq funds to socio-economic resilience during covid- 19 pandemic: An islamic economics insight from indonesia,” HTS Teologiese Studies/Theological Studies, vol. 79, no. 1, 2023.
[29] D. Agustia, W. Wibowo, N. Laila, A. R. Sridadi, and N. Anridho, Sustainability and Digital Transformation in Global Vulnerability-Current Issues in Accounting and Shariah Economics. Airlangga University Press, 2024.
[30] H. Karimah, A. A. Ahmad, and M. A. A. Akbar, “Empowering the informal economy through islamic social finance: Insights from islamic economic principles for inclusive development,” At-Taradhi: Jurnal Studi Ekonomi, vol. 16, no. 1, pp. 14–33, 2025.
[31] M. Alsaghir, “Digital risks and islamic fintech: a road map to social justice and financial inclusion,” Journal of Islamic Accounting and Business Research, 2023.
[32] R. Sylvia, A. Hayat, R. Zulelli, and A. Maiyo, “Integration of waqf and technology in islamic microfinance institutions (imfis): A systematic review of social efficiency, financial inclusion, and msme empowerment in developing countries,” Asian Journal of Management, Entrepreneurship and Social Science, vol. 5, no. 02, pp. 1128–1147, 2025.
[33] M. Vince, “Digital wallets for impactful financial inclusion: Innovative strategies based on sharia economics and cybersecurity in indonesia,” 2025.
[34] A. Saifurrahman and S. H. Kassim, “Regulatory issues inhibiting the financial inclusion: a case study among islamic banks and msmes in indonesia,” Qualitative Research in Financial Markets, vol. 16, no. 4, pp. 589–617, 2024.
[35] M. R. Rukmanda, H. Bisri, D. Jubaedah, D. Gojali, and S. Hadi, “Empowering sharia-based micro, small and medium enterprises (msmes) in indonesia: A socioeconomic and ethical framework for inclusive development,” International Journal of Nusantara Islam, vol. 13, no. 2, pp. 245–256, 2025.
[36] A. F. Sebayang, “The role of islamic crowdfunding for poverty reduction in indonesia,” in Innovation and Transformation of Islamic Economics. IGI Global Scientific Publishing, 2026, pp. 59–80.
[37] L. Latifah, “Regulatory and ethical duality in indonesia’s fintech p2p lending: Conventional vs. sharia models from an islamic economics perspective,” Al-Muhasib: Journal of Islamic Accounting and Finance, vol. 5, no. 1, pp. 74–98, 2025.
[38] T. Widiastuti, S. Ningsih, A. Prasetyo, I. Mawardi, S. Herianingrum, A. Robani, M. U. Al Mustofa, and A. F. Hady, “Developing an integrated model of islamic social finance: toward an effective governance framework,” Heliyon, vol. 8, no. 9, 2022.
[39] I. Asrofi, “Principles and objectives of islamic economics as an alternative solution to contemporary economic problems,” FAWAID: JOURNAL OF ISLAMIC STUDIES, vol. 1, no. 3, pp. 93–100, 2025.
[40] B. Harahap, T. Risfandy, and I. N. Futri, “Islamic law, islamic finance, and sustainable development goals: A systematic literature review,” Sustainability, vol. 15, no. 8, p. 6626, 2023.
[41] L. Hakim, A. Zikrifah, T. R. Melati, D. Tresnawati, K. Karti, and D. Kresnapatty, “The role of pesantren in economic empowerment of the ummah: A qualitative descriptive study in indonesia,” El-kahfi— Journal of Islamic Economics, vol. 6, no. 01, pp. 108–120, 2025.
[42] S. Akbar, “The role of the islamic development bank (isdb) in socio-economic development in organization of islamic cooperation (oic) countries,” Jisiera: The Journal of Islamic Studies and International Relations, vol. 8, no. 1, pp. 83–113, 2025.
[43] S. Humaira, “Sharia-compliant microfinance and local economic development: The role of bprs under aceh’s sharia financial institution law (qanun lks),” Global Research in Economics and Advanced Theory (GREAT), vol. 2, no. 3, pp. 107–114, 2025.
[44] F. Faizi, A. S. Kusuma, and P. Widodo, “Islamic green finance: mapping the climate funding landscape in indonesia,” International Journal of Ethics and Systems, vol. 40, no. 4, pp. 711–733, 2024.
[45] E. Nadya, M. Maryam, N. Nelly, R. Yulianti, and P. L. Sary, “Advancing sharia-compliant loan models for micro, small, and medium enterprises (msmes) to promote financial inclusion and alleviate poverty,” in Proceeding Medan International Conference on Economic and Business, vol. 2, 2024, pp. 865–881.
[46] R. Ramadiyah and W. Saputra, “Strengthening islamic economic understanding among adolescents in rumbai district, pekanbaru through interactive learning programs and practical halal financial education,” Falsafa: Jurnal Multidisiplin Pengabdian Kepada Masyarakat, vol. 1, no. 1, pp. 64–83, 2026.
[47] E. Ardyan, Y. Boari, A. Akhmad, L. Yuliyani, H. Hildawati, A. Suarni, and L. Judijanto, Metode Penelitian Kualitatif dan Kuantitatif: Pendekatan di Berbagai Bidang. PT. Sonpedia Publishing Indonesia, 2023.
[48] H. Banna, M. K. Hassan, R. Ahmad, and M. R. Alam, “Islamic banking stability amidst the covid-19 pandemic: the role of digital financial inclusion,” International Journal of Islamic and Middle Eastern Finance and Management, vol. 15, no. 2, pp. 310–330, 2022.
[49] N. O. Sinulingga, R. Syahriza, and M. I. Harahap, “The role of islamic social capital in promoting womenˆaC™ s empowerment for community economic growth,” ISLAMICONOMIC: Jurnal Ekonomi Islam, vol. 15, no. 1, 2024.
[50] S. Herianingrum, S. Iswati, A. Ma’ruf, and Z. Bahari, “The role of islamic economics and social institutions during the time of covid-19,” Journal of Islamic Marketing, vol. 15, no. 8, pp. 2144–2162, 2024.
[51] R. D. Kadir, S. Tri Wahyudi, G. Maski, and V. Devia Sagita Sumantri, “The role of financial inclusion in reducing household poverty: insights from eastern indonesia,” Cogent Economics & Finance, vol. 13, no. 1, p. 2588925, 2025.
[52] L. Raimi, I. A. Abdur-Rauf, and S. A. Ashafa, “Does islamic sustainable finance support sustainable development goals to avert financial risk in the management of islamic finance products? a critical literature review,” Journal of Risk and Financial Management, vol. 17, no. 6, p. 236, 2024.
[53] R. Yudaruddin, “Financial technology and performance in islamic and conventional banks,” Journal of Islamic Accounting and Business Research, vol. 14, no. 1, pp. 100–116, 2023.
[54] Bank Indonesia, “Bank indonesia and central bank of the united arab emirates agree to expand cooperation in the area of central banking and islamic finance,” 2023. [Online]. Available: https://www.bi.go.id/en/publikasi/ruang-media/news-release/Pages/sp 2532523.aspx
Downloads
Published
Issue
Section
License
Copyright (c) 2026 Rohim Rohim,Muhtarom Muhtarom, Ighfirli Ilyas, Kgomotso Moyo
This work is licensed under a Creative Commons Attribution 4.0 International License.
