The role of financial technology (fintech) in improving Islamic financial inclusion

Abstract

This study aims to analyze the role of financial technology (fintech) in enhancing Islamic financial inclusion in Purwakarta. The main focus of the research is to identify the factors influencing community adoption of Islamic fintech, explore its potential impact on the development of the local Islamic economy, and examine the challenges faced by the community in accessing Sharia-based financial services. This study employs a descriptive qualitative approach using a case study design, involving in-depth interviews with users and providers of Islamic fintech services, direct observations, and analysis of supporting documents. The findings indicate that ease of access, adherence to Sharia principles, transparency, and security are key factors influencing public adoption of Islamic fintech. Moreover, these services significantly contribute to Islamic financial inclusion by expanding financial access for communities previously excluded from formal financial services and supporting Sharia-based MSME financing. However, challenges such as low digital literacy and inadequate regulatory frameworks remain significant obstacles in the implementation of these services. The study highlights the importance of strengthening Islamic financial literacy, enhancing supportive regulations, and fostering collaboration between fintech providers and the government to maximize the impact of Islamic fintech in expanding financial inclusion in Purwakarta.

Keywords: Islamic fintech; financial inclusion; Sharia principles; digital literacy; MSMEs; Purwakarta