Sustainable Financial Inclusion: The Role of Islamic Commercial Bank Financing in MSMEs

Abstract

The presence of Islamic Commercial Banks is an alternative source of MSME financing. In general, MSMEs have classic problems in the form of low levels of financial literacy and inclusion in Islamic banking. This study aims to analyze how financial inclusion influences BUS on MSME financing in Indonesia. This study uses a quantitative descriptive method of Ordinary Least Square analysis. The estimation results show that dimensions d1 and d2 have a significant positive effect on MSME BUS financing in Indonesia. Meanwhile, the d3 dimension has a negative relationship and does not affect MSME BUS financing in Indonesia. This indicates that MSMEs do not make financing from BUS the ultimate goals of using banking services. The development of digital financing services is an alternative to fulfilling funds for MSMEs. Islamic banks must develop products and services that suit the needs of a diverse society. In addition, the government must have regulations that support and encourage the development of Islamic banking and financial inclusion.