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Islamic financial inclusion determinants in Indonesia: an ANP approach

Author

Listed:
  • Mohammad Mahbubi Ali
  • Abrista Devi
  • Hafas Furqani
  • Hamzah Hamzah

Abstract

Purpose - This study aims to uncover the determinants of Islamic financial inclusion in Indonesia. Design/methodology/approach - This study uses the analytic network process (ANP) to gather expert opinions and responses from academics, regulators and practitioners. Findings - The ANP analysis discovered that the level of Islamic financial inclusion in Indonesia is influenced by two main drivers: the supply and the demand. The demand factors for Islamic financial inclusion, ranked based on their level of significance, are as follows: financial literacy (0.27), religious commitment (0.22), socioeconomic factor (0.19) and social influence (0.17), respectively. From the supply side, primary catalysts for Islamic financial inclusion based on their level of importance are human capital (0.32), product and services (0.24), infrastructure (0.18) and policies and regulation (0.17), respectively. Research limitations/implications - The present study does not include the Islamic insurance sector in its determinant framework of Islamic financial inclusion in Indonesia. Practical implications - This study serves as a reference for regulators in formulating appropriate policy strategies to strengthen the Islamic financial inclusion in Indonesia. Originality/value - This study is a pioneer attempt to identify distinctive factors that influence the level of Islamic financial inclusion in Indonesia by analyzing expert opinions from diverse groups of Islamic finance stakeholders.

Suggested Citation

  • Mohammad Mahbubi Ali & Abrista Devi & Hafas Furqani & Hamzah Hamzah, 2020. "Islamic financial inclusion determinants in Indonesia: an ANP approach," International Journal of Islamic and Middle Eastern Finance and Management, Emerald Group Publishing Limited, vol. 13(4), pages 727-747, July.
    • Handle: RePEc:eme:imefmp:imefm-01-2019-0007
    DOI: 10.1108/IMEFM-01-2019-0007
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    Citations

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    Cited by:

    1. David Mhlanga, 2021. "Factors That Matter for Financial Inclusion: Evidence from Sub-Sharan Africa - The Zimbabwe Case," Academic Journal of Interdisciplinary Studies, Richtmann Publishing Ltd, vol. 10, November.
    2. Francis Lwesya & Adam Beni Swebe Mwakalobo, 2023. "Frontiers in microfinance research for small and medium enterprises (SMEs) and microfinance institutions (MFIs): a bibliometric analysis," Future Business Journal, Springer, vol. 9(1), pages 1-18, December.

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