The Effectiveness of Sharia Financing in Enhancing Financial Inclusion

Abstract

Financial inclusion is an important aspect in sustainable economic development, especially for community groups that have not been reached by conventional financial services. Sharia finance has emerged as an alternative that has the potential to increase financial inclusion through various sharia-based financing products, such as murabahah, mudharabah, musyarakah, and ijarah. This study aims to review the effectiveness of sharia financing in increasing financial inclusion in Indonesia using a literature review method. The results of the study indicate that sharia financing plays a significant role in supporting the growth of micro, small, and medium enterprises (MSMEs), improving community welfare, and expanding access to formal financial services. However, challenges such as low sharia financial literacy, limited accessibility, and suboptimal regulations are still the main obstacles. Therefore, strategies to improve education, utilize sharia fintech, and provide stronger policy support are needed to accelerate the growth of sharia-based financial inclusion in Indonesia.