THE INFLUENCE OF SHARIA FINANCING ON THE GROWTH OF MICRO, SMALL AND MEDIUM ENTERPRISES

Abstract

Micro, Small and Medium Enterprises (MSMEs) are currently the center of attention of the government and the general public because they have an important role in economic growth. MSMEs that have a strategic role, face common problems that are often encountered, namely limited capital. Most MSMEs in Indonesia are still hesitant to borrow capital from Islamic banks. So here Islamic Banking must show their role towards MSMEs that Islamic banking can be relied on to help them overcome capital difficulties. Namely by, first introducing financing for MSMEs using Islamic principles to micro, small and medium business owners, second about the inhibiting factors that make MSMEs reluctant to borrow capital from Islamic banking, and third is a solution to overcome the problem of inhibiting the implementation of MSME financing using Islamic principles. In addition to Islamic banking, there are Islamic financial institutions specifically for financing. These Islamic Financial Institutions can later help in increasing their business capacity, namely in the form of additional capital, because if MSMEs are successful, the opportunities for workers will increase and the economic figures will increase.