<![CDATA[General Background: The digital transformation in financial services has positioned fintech as a pivotal force in reshaping microfinance dynamics. Specific Background: In the context of Islamic financial institutions, fintech syariah offers a unique opportunity to enhance competitiveness while maintaining sharia compliance. Knowledge Gap: However, limited empirical exploration exists on how sharia-based fintech is strategically implemented within BMTs, particularly in rural Indonesian settings. Aims: This study investigates the role and optimization of sharia fintech in enhancing the competitiveness of BMT UGT Nusantara Capem Sempu, Banyuwangi. Results: Using a qualitative descriptive method through interviews, observations, and documentation, the study finds that fintech integration improves operational efficiency, simplifies financing processes, and boosts member trust. Novelty: The research highlights the contextual adaptation of fintech solutions within a sharia microfinance institution, addressing both technological and cultural-religious imperatives. Implications: Despite positive impacts, challenges such as digital literacy and infrastructure limitations persist. Strategic recommendations include digital capacity building, deeper fintech collaboration, and continuous innovation to ensure long-term competitiveness in the Islamic microfinance sector. Highlights: Enhances efficiency and outreach through digital integration. Strengthens trust while maintaining sharia compliance. Faces challenges in literacy and infrastructure adoption. Keywords: Sharia Fintech, Microfinance, BMT Competitiveness, Digital Transformation, Islamic Finance]]>
