Mujiatun, S., Badawi, A. (2023) Root Cause Analysis Factors Against Islamic Banking Financial Inclusion

Abstract

Purpose: The aim of this study is to analyze the achievement of Islamic financial inclusion targets through increasing the digitization of Islamic banking in Indonesia using the Islamic financial inclusion index. Theoretical framework: The theoretical framework shows that financial inclusion is the biggest challenge in improving Islamic finance, this is in line with the targets from the road map from regulators and previous research, one of which is in 2020. So that if financial inclusion does not increase, it can hamper the development of Islamic finance in a comprehensive and sustainable. Design/methodology/approach: The Method using the root cause analysis method of the inhibiting factors for Islamic banking financial inclusion and a literature study that examines the financial inclusion index and the results of Islamic financial inclusion research. Findings: From the research that has been done, it containing that the level in Islamic financial inclusion from 2019 to 2021 is 76.91% even though the 2024 financial inclusion target by the regulator is 90%. For this reason, a strategy for achieving Islamic financial inclusion through digitalization is needed, including opportunities from the post-covid-19 era that support sustainable digitalization. Research, Practical & Social implications: The research results imply that the regulators and Islamic banking must induce the financial inclusion index achievement towards the 2024 target. Originality/value: This article is an academic contribution that allow an understanding about research Root cause analysis factors against islamic banking financial inclusion.