The Influence Of Sharia Financial Literacy On Msmes Performance: The Study Case In Indonesian Muslim Entrepreneur Community (Kpmi) On Java Island

Abstract

Abstract.  Maqashid Sharia is essential to benefit society, especially in business activity. Currently, Indonesia with a majority of Muslims, this country has a low number of entrepreneurs below Singapore, Malaysia, and Thailand. Based on data from the Ministry of Cooperative Small and Medium Enterprises of Indonesia in 2019, there are 65.47 MSMEs units in Indonesia. This is also not supported by financial literacy, especially in terms of Sharia Financial literacy because Indonesia has still low with a number of literacy 8.93%. In fact, Sharia financial products can have a big impact performance of MSMEs in running their business, which means Sharia financial literacy as well. The Indonesian Muslim Entrepreneur Community (KPMI) is the largest association of Muslim entrepreneurs who are running their businesses to be sustainable and improve their performance in business activity so that can reach Maqashid Sharia and this Sharia financial literacy is important for KPMI. This study used a quantitative approach with 160 respondents in Java island using a questionnaire and was analyzed using PLS-SEM. To conclude, this research on members of KPMI on Java island that proved Sharia financial literacy has a significant influence on their performance.

Keywords: Maqashid Sharia, Sharia Financial Literacy, MSMEs performance.