Abstract
Islamic fintech plays a role in encouraging the growth of micro, small and medium enterprises (MSMEs) in Indonesia with their financing segments. The bigger the Islamic fintech, the faster the growth of MSMEs in Indonesia. This study aims to identify macroeconomic factors such as gross domestic product (GDP), interest rates and inflation in driving the growth of Islamic fintech. Using the Ordinary Least Squared (OLS) regression method, the results show that GDP and inflation have a positive effect on the growth of Islamic fintech, while interest rates have a negative effect on the growth of Islamic fintech. Improving macroeconomic conditions will encourage the growth of Islamic fintech which in turn will contribute to the growth of MSMEs, which are the main segment of Islamic fintech financing.
Highlights
The disruptive era marked by the rapid development of digital has begun
Gross Domestic Product (GDP) and interest rates affect the growth of Islamic fintech assets linearly, while inflation does no effect the growth of Islamic fintech assets
Sustainable economic growth will encourage the growth of Islamic fintech assets which in turn will contribute to the growth of financing to the MSME sector so that it can accelerate the growth of MSMEs themselves
Summary
The disruptive era marked by the rapid development of digital has begun. Various changes in the business world that were previously unimaginable have occurred and changed many people's lifestyles. Based on data from the Financial Services Authority (OJK), over the past 3 years, there has been a significant development in peer to peer lending (P2P lending) in Indonesia, it can be seen from the total number of fintech assets as well as the number of players (OJK, 2020a). This is in line with data from the survey results which show that 25.71% of respondents, who are all MSME players, agree that P2P lending fintech is the top main source of funding compared to other financing instruments (DSInnovate, 2021). Digital transactions are considered as a solution in addressing the problems of community needs when most places of business experience closure due to this policy (EconMark, 2020)
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