West Science Interdisciplinary Studies
Vol. 1 No. 11 (2023): West Science Interdisciplinary Studies

The Effect of Sharia Financing Availability on Economic Growth of MSMEs in Sukabumi

Moh Gifari Sono (Universitas Muhammadiyah Luwuk)
Eko Sudarmanto (Universitas Muhammadiyah Tangerang)
Dyah Palupiningtyas (STIEPARI Semarang)
Efendi Sugianto (Universitas Pertiba Babel)



Article Info

Publish Date
23 Nov 2023

Abstract

This research investigates the effect of the availability of Islamic financing on the economic growth of Micro, Small, and Medium Enterprises (MSMEs) in Sukabumi. A sample of 197 MSMEs participated in the study, providing data on Islamic financing utilization, financial performance indicators, and other relevant variables. The analysis employs Structural Equation Modeling with Partial Least Squares (SEM-PLS) to examine the relationships between these variables. The results reveal a significant and positive relationship between the availability of Islamic financing and the economic growth of MSMEs. Additionally, the study uncovers the mediating role of financial performance indicators, indicating that improved financial performance acts as a mechanism through which Islamic financing positively influences economic growth. Furthermore, the moderation analysis highlights the varying impact across different enterprise sizes, with medium-sized enterprises experiencing a more pronounced positive effect. The practical implications of these findings are discussed in the context of policy, financial institutions, and MSME owners. Policymakers can use the results to design targeted policies, financial institutions can refine their strategies, and MSME owners gain insights into the benefits of utilizing Islamic financing.

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Journal Info

Abbrev

wsis

Publisher

Subject

Humanities Economics, Econometrics & Finance Social Sciences

Description

Journal that publishes multidisciplinary research articles, which include: Humanities and social sciences, Business Economics, Cooperatives & Banking, Sharia Economics, Development Economics, HR Development, Taxation and Commercial Insurance, Communication, Technique, Informatics, Information ...