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Shaping Entrepreneurial Performance In Small Business Sectors: Does Islamic Financial Institutions’ Support Matter?

Author

Listed:
  • RIZALDI YUSFIARTO

    (Faculty of Islamic Economics and Business, Universitas Islam Negeri Sunan Kalijaga, Yogyakarta, Indonesia)

  • ISLAM ABDELJAWAD

    (Faculty of Business and Communication, An-Najah National University, Nablus, Palestine, West Asia)

  • LAILATIS SYARIFAH

    (Institute of Islamic Banking and Finance, International Islamic University Malaysia, Kuala Lumpur, Malaysia)

  • ROMZIE ROSMAN

    (Institute of Islamic Banking and Finance, International Islamic University Malaysia, Kuala Lumpur, Malaysia)

  • AHMAD FEBRIYANTO

    (Faculty of Islamic Economics and Business, Universitas Islam Negeri Sunan Kalijaga, Yogyakarta, Indonesia)

  • MUHAMMAD HANIF IBRAHIM

    (Faculty of Islamic Economics and Business, Universitas Islam Negeri Sunan Kalijaga, Yogyakarta, Indonesia)

Abstract

This study explores the role of Islamic financial institutions’ (IFIs) support in the entrepreneurial success of Muslim-owned micro, small and medium-sized enterprises (MSMEs). It also integrates the constructs of Islamic financial literacy, management control systems and the alleviation of financial constraints as key components of business internalization. The study involved 265 Muslim MSME owners, who were analyzed using partial least squares structural equation modeling (PLS-SEM). The empirical results reveal that IFIs play a significant role in enhancing entrepreneurial performance by enabling MSME actors to access both tangible and intangible resources critical to business success. Furthermore, the findings emphasize that IFIs act not only as capital providers but also as entrepreneurial support organizations, facilitating strategic guidance to support economic transformation through a more integrated approach grounded in Islamic values.

Suggested Citation

  • Rizaldi Yusfiarto & Islam Abdeljawad & Lailatis Syarifah & Romzie Rosman & Ahmad Febriyanto & Muhammad Hanif Ibrahim, 2025. "Shaping Entrepreneurial Performance In Small Business Sectors: Does Islamic Financial Institutions’ Support Matter?," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 30(02), pages 1-29, June.
    • Handle: RePEc:wsi:jdexxx:v:30:y:2025:i:02:n:s1084946725500141
    DOI: 10.1142/S1084946725500141
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    More about this item

    Keywords

    Islamic financial institution; entrepreneurial support organizations; Islamic financial literacy; alleviation of financial constraints; micro; small and medium-sized enterprises;
    All these keywords.

    JEL classification:

    • B21 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Microeconomics
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General

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