Publisher

UNISBARUNISBAR

Journal One moment, please...One moment, please... Abstract

This study aims to explore lending and debt practices in Islamic commercial law within Indonesias modern business sector, focusing on Micro, Small, and Medium Enterprises (MSMEs) and Islamic financial institutions. The research addresses the ongoing tension between the idealism of Sharia principles emphasizing fairness, transparency, and the prohibition of riba and the pragmatic realities of business financing. A descriptive qualitative approach with a case study design was applied. Data were collected through semi-structured interviews with MSME entrepreneurs and Islamic finance practitioners, supported by limited field observations due to incomplete access to some respondents. The findings reveal that the understanding of Sharia principles among MSME actors remains partial, often limited to the prohibition of interest, while practical lending is still dominated by conventional banks. Although several Islamic financing contracts, such as murabahah and qardul hasan, are applied, administrative fees and procedural complexity remain barriers to full Sharia adoption. Low Islamic financial literacy and limited product innovation also hinder broader engagement with Islamic financing. Nevertheless, participants noted that Sharia-based loans provide spiritual comfort and ethical reassurance compared to interest-bearing credit systems.

Conclusion

The study concludes that business financing among MSMEs in North Sumatra remains largely dominated by conventional financial institutions due to easier access and faster services.However, awareness and preference for Sharia-compliant financing are gradually increasing, as reflected in the adoption of murābaḥah and qard al-ḥasan contracts.This research highlights a persistent tension between the ideals of Islamic law and the pragmatic realities of business operations, emphasizing the need for product innovation, regulatory support, and literacy development to strengthen the role of Islamic finance in promoting inclusive and sustainable business growth.

Future Research

Further research should investigate the diverse experiences across various business sectors, such as agriculture, manufacturing, and digital entrepreneurship, to understand the nuances of Sharia compliance in different contexts. Additionally, exploring the evolving landscape of digital consumer behavior and the emergence of Sharia-based peer-to-peer (P2P) lending ecosystems in Southeast Asia is crucial for identifying innovative financing models. Finally, studies should focus on developing adaptive regulatory frameworks that support the growth of ethical and inclusive Islamic finance while addressing the challenges of technological transformation and global market dynamics, ensuring that these frameworks are both responsive and supportive of sustainable economic development within the principles of Sharia law.

References

1. PELUANG DAN TANTANGAN SYARIAH PADA LEMBAGA KEUANGAN SYARIAH | ECOTECHNOPRENEUR : Journal Economics, Technology... doi.org/10.62668/ecotechnopreneur.v2i01.538PELUANG DAN TANTANGAN SYARIAH PADA LEMBAGA KEUANGAN SYARIAH ECOTECHNOPRENEUR Journal Economics Technology doi 10 62668 ecotechnopreneur v2i01 538
2. A simple method to assess and report thematic saturation in qualitative research | PLOS One. simple method... doi.org/10.1371/journal.pone.0232076A simple method to assess and report thematic saturation in qualitative research PLOS One simple method doi 10 1371 journal pone 0232076

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Pages	14
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