Strategic Alliances between Sharia Microfinance Institutions and Financial Technology in Strengthening Small Micro Enterprises for Socio Economic Justice

Author : Euis Amalia (Universitas Islam Negeri Syarif Hidayatullah Jakarta), Indra Rahmatullah (Universitas Islam Negeri Syarif Hidayatullah Jakarta)

Abstract : Sharia microfinance and financial technology have very significant role as an effective solution in accessing finance for small and micro enterprises.

By utilizing qualitative methods and critically analyzing specific case study, this research aims to investigate business model used, type of contracts employed, legal aspects, and the risk mitigation. Data was obtained from interview several experts and practitioners of sharia microfinance and financial technology institutions.

The research suggest that the business model used was based on crowd funding compliant with sharia principles. This means that the legality of the cooperation between the sharia microfinance institutions and the financial technology provider has strong basis both in positive law and fatwa. In this case, the risk mitigation for consumer protection is guaranteed by specific government regulations.

The research showed that the strategic alliance between sharia microfinance institution and financial technology firm is capable for strengthening access to capital sources for small and micro enterprises. It also improves community financial literacy and financial inclusion, so that socio-economic justice can be realized.

This research could contribute to the creation of innovative products concerning sharia microfinance, sharia financial technology, and the formulation of policies related to strengthening of institutional cooperation.

Keywords: Crowd Funding, Financial Technology, Sharia Microfinance, Strategic Alliances, Socio Economic Justice

Journal : IQTISHADIA Volume 13 Issue 2 2020

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