The impact of financial technology adoption on economic empowerment in Islamic microfinance

Abstract

This study aims to analyze the impact of financial technology (fintech) adoption on economic empowerment within Islamic microfinance institutions, with financial inclusion acting as a moderating variable. The research employed the Partial Least Squares Structural Equation Modeling (PLS-SEM) method, gathering data from 75 respondents through a Likert-scale-based questionnaire. The findings reveal that fintech adoption has a significant impact on economic empowerment, while financial inclusion strengthens this relationship, although its influence is relatively smaller compared to fintech itself. The implications of this research highlight the necessity of improving financial literacy, digital infrastructure, and supportive regulations to ensure optimal benefits of fintech within Islamic microfinance.

Keywords: Fintech; Islamic microfinance; economic empowerment; financial inclusion; PLS-SEM