Abstract
Fintech is one of the drivers of the existence of a movement to improve MSME finance, especially the lower middle class through Islamic financial institutions. The development of digital technology, including in the Islamic financial industry, has had a major influence with the existence of financial technology (fintech), all forms of transactions are faster, easier, and more efficient, without the need to meet in person. Financial technology collaboration with Islamic financial institutions, especially Islamic banking can increase financial inclusion at MSMEs in Indonesia. The implementation of Fintech in the Islamic banking industry will facilitate and bring business players closer, especially MSMEs to access Islamic financial service products offered and apply for financing directly without having to go directly to the branch offices. Such a model, in addition to making it easier for MSME sector business people to gain financial access, can also improve financial inclusion and improve the performance of Islamic banks. Efforts to increase the capacity of micro businesses that were originally unbankable can be increased to bankable. Where the role of related institutions such as banking and fintech, which is currently becoming popular in the community, can contribute and build micro businesses to become more independent and encourage economic development in Indonesia with the collaboration of banking institutions and micro businesses in financing.
Highlights
Micro businesses have survived quite well especially in certain business sectors in Indonesia, the government formulated a new paradigm to be able to develop the micro business sector to be more optimal
The inefficiency of sharia banks and the low quality of sharia bank assets compared to conventional banks have an impact on the low stability of sharia banks compared to conventional banks
One of the basic policies in investment is the empowerment of a people's economy, which encourages the development and protection of MSMEs based on employment data (KUMKM News)
Summary
Micro businesses have survived quite well especially in certain business sectors in Indonesia, the government formulated a new paradigm to be able to develop the micro business sector to be more optimal. With the existence of restrictions on business fields and investment value for MSMEs in the context of growing the business climate described in Article 7 paragraph (1) of Law Number 20 Year 2008 about Micro, Small and Medium Enterprises stated: "The government and regional governments foster a business climate by setting laws and policies that include aspects of: funding and institutional support”. That with the hope of micro-businesses that have informal characteristics, they can become formal sector businesses that have begun to be touched by banking institutions and the increasing business capacity in free trade, especially in Indonesia, so that funding difficulties that become a classic problem today can be answered. This is because MSMEs do not have access from banking financial institutions
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