Sharia fintech contribution to empowering halal-labeled MSMEs in Batang Regency

Abstract

This study examines the role of Islamic fintech in encouraging financial inclusion and empowering halal-labeled MSMEs in Batang Regency. The results show that sharia fintech has successfully provided easier access to financing, improved operational efficiency, and expanded market reach for MSMEs. The implementation of transparent and fair sharia principles, such as profit-sharing mechanisms and the prohibition of usury, has built strong trust among MSMEs towards digital financial services. Sharia fintech not only offers financing solutions that comply with Islamic values but also supports MSMEs in enhancing their competitiveness in a rapidly changing market environment. However, the study also identifies several challenges, particularly low levels of digital literacy among MSME actors and limited technological infrastructure, which can hinder the optimal utilization of sharia fintech services. To maximize the potential of Islamic fintech, continuous efforts are needed to enhance the digital financial literacy of MSMEs and to provide adequate supporting infrastructure in rural and semi-urban areas. Collaboration between the government, financial institutions, and sharia fintech industry players is crucial to create a conducive ecosystem that supports the sustainable growth of halal-labeled MSMEs in Batang. Overall, the study concludes that sharia fintech plays a crucial role in empowering halal-certified MSMEs, enabling them to contribute more significantly to the local economy, generate employment opportunities, and promote inclusive economic development. Despite existing challenges, the potential for the development of sharia fintech in Batang remains highly promising