Jurnal Ekonomi & Keuangan Islam

Does effective governance matter for Islamic social finance? Evidence from mosques in Yogyakarta

Prayudi Ibrahim Nasution — 2026-01-22

Purpose – This paper examines how effective governance influences Islamic social finance management, using mosques in Yogyakarta as a case study during and after the Covid-19 crisis.
Methodology – This study employs a survey with a sample of 360 mosques in Yogyakarta using a quantitative approach with ordinary least squares (OLS) and logit regression models.
Findings – The findings indicate that an increase in the effective governance index score has a positive and significant effect on the fundraising index and zakat distribution, resulting in increases of 0.14 standard deviations and 6.5 percent, respectively. Furthermore, effective governance had a positive and significant effect on the probability of mosques having a financial management system, with a marginal effect of 7.3 poin percentage.
Implication – The government should offer financial management training and support the digitalization of reporting systems as a means of strengthening mosque governance.
Limitations – First, the data used were cross-sectional, which may restrict researchers' ability to identify long-term causal relationships. Second, despite efforts to address endogeneity using several variables, the instruments are theoretically valid but statistically insignificant.
Original – This study is the first to present micro-level empirical evidence from mosques in Yogyakarta, an area that has rarely been explored in Islamic financial governance literature. Furthermore, we used a multidimensional effective governance index that ranges from 0 to 1. The index was then standardized using a z-score to ensure comparability and balance across mosques.

Contractual-based Islamic crowdfunding model for sustainable agricultural financing

Rizal Fahlevi — 2026-01-22

Purpose – This study develops a Sharia-compliant crowdfunding model based on digital technology that integrates four principal contracts in Islamic jurisprudence (salam, istisna’, muzara’ah, and musaqah) to enhance the relevance and effectiveness of agricultural financing in Indonesia.
Methodology – Using a qualitative exploratory approach, we combine relevant literature and content analyses of agricultural crowdfunding campaigns. The model’s internal validity is reinforced through triangulation involving Islamic legal theory, and nationally recognized Sharia regulatory guidelines issued by the Indonesian National Sharia Council (DSN-MUI). Empirical campaign data. were obtained from 15 agricultural crowdfunding campaigns published during 2021-2024 period and validated through thematic analysis and triangulation across documents and campaign reports.
Findings – The findings reveal that most existing campaigns rely on single contracts, such as salam or murabahah, which are inadequate for the seasonal and high-risk nature of agriculture. The proposed multi-contract model offers a more equitable and Sharia-aligned financing framework that accommodates joint risk sharing and production-based returns. Furthermore, digital integration allows for the development of more inclusive, adaptive, and dynamic contracts.
Implications – Theoretically, this study contributes to the Islamic finance literature by introducing a risk-sharing, partnership-oriented financing framework tailored to the agricultural sector. Practically, the model provides actionable insights for Sharia-compliant crowdfunding platforms and financial regulators to promote inclusive and sustainable agricultural finance.
Originality – This study contributes to the literature by proposing a conceptual model of multi-contract agricultural crowdfunding, a novel approach that bridges normative Sharia principles with empirical evidence in the context of Islamic digital financial innovation.

Extending UTAUT3 with Sharia value to predict SOTS adoption among Gen Z

Ulfia Nur Afifa — 2026-01-29

Purpose – This study analyzes the influence of behavioral intention and use behavior on the use of the Sharia Online Trading System (SOTS) among Generation Z investors in Indonesia by extending the UTAUT3 model through the Sharia value variable.
Methodology– This study employed structural equation modeling (SEM) using SmartPLS 4.1 software. Data were collected from 250 Generation Z investors across Indonesia through a purposive random sampling technique based on specific criteria.
Findings – Effort expectancy, price value, and Sharia value had a significant positive impact on behavioral intention. Similarly, habit, performance expectancy, sharia value, and effort expectancy significantly influenced use behavior. In contrast, social influence, facilitating conditions, and hedonic motivation did not significantly affect either intention or use behavior. Notably, there was an unexpected negative relationship between behavioral intention and use behavior, indicating a complex dynamic that requires further investigation.
Implications – This study reinforces the UTAUT3 model within the context of sharia digital finance and emphasizes the importance of effort expectancy, price value, and religious compliance in driving adoption. From a practical perspective, SOTS providers should focus on enhancing effort expectancy and integrating Sharia values to attract young Muslim investors.
Originality – Sharia values are integrated into the UTAUT3 model to examine Generation Z’s adoption of the Sharia Online Trading System (SOTS). This integration addresses a research gap concerning behavioral factors in Sharia fintech within emerging markets.

Valuing what matters in Islamic microfinance: Sharia-based ethics and limits of murabahah

Anggraeni Yunita — 2026-01-29

Purpose – This study examines the effect of murabahah financing on the net business income of small-scale fishermen in coastal Sumatra and tests whether Sharia value added (SVA), a maqāṣid al-sharīʿah-oriented multidimensional construct, mediates this relationship.
Methodology – A structured survey was administered to 310 fishermen selected through clustered sampling across 31 coastal sub-districts in Sumatra. The proposed model was analyzed using partial least squares structural equation modeling (PLS-SEM) to estimate the direct and indirect effects of murabahah implementation, SVA, and net business income.
Findings – Murabahah implementation had a positive and significant direct effect on fishermen’s net business income. Murabahah implementation also significantly affected SVA. However, SVA does not have a significant direct effect on net business income. Despite this, the indirect effect of murabahah implementation on income through SVA was statistically significant, indicating the mediating role of SVA.
Implications – The results suggest that assessing Islamic microfinance solely through profitability or repayment metrics is insufficient. Evaluation frameworks should incorporate value-based indicators reflected in SVA, such as perceived fairness, ethical orientation, and social benefits, when designing and assessing murabahah-based financing programs for marginalized coastal communities.
Originality – This study provides field-based evidence from the fisheries sector by empirically positioning SVA as a mediating mechanism linking murabahah implementation to financial performance, offering a value-oriented perspective that goes beyond procedural contractual compliance.

Sustainability disclosure and firm value: The intervening role of financial performance

Hilmy Baroroh — 2026-01-29

Purpose – This study examines the extent to which non-financial reporting affects firm value.
Methodology – This study employs panel data regression analysis using Generalized Least Squares (GLS) and Sobel tests to examine the mediation relationship between variables. The sample consists of companies listed on the IDX Sharia Growth database from 2020 to 2023, with an effective constituent period of December 2023 to May 2024.
Findings – The results show that sustainability reports have a negative and significant effect on financial performance, while risk management and intellectual capital have positive and significant effects on financial performance. Sustainability reports do not affect firm value, while risk management and intellectual capital have a negative and significant effect on firm value, while financial performance has a positive and significant effect on firm value. Financial performance negatively mediates the relationship between sustainability reports and firm value.
Implications – This research can provide insights for academics and various stakeholders in their efforts to increase firm value, from a management, investment, policy, or social responsibility perspective. Academics can explore how these factors interact in other industries or countries as well as how changes in regulation or market conditions affect these relationships.
Originality – This study fills this gap by exploring the factors that influence firm value in the IDX Sharia Growth. It also used additional intervening variables to provide more comprehensive results.

An empirical analysis of profit-and-loss sharing financing in Indonesian Islamic banks

Agus Suman — 2026-02-10

Purpose – This study examines the determinants of profit-and-loss sharing (PLS) financing adoption in Indonesia by incorporating bank-specific, macroeconomic, and religiosity variables.
Methodology – Utilizing monthly time-series data from October 2014 to October 2023, this research employs the Autoregressive Distributed Lag (ARDL) approach to model both long-run and short-run relationships. The analyzed variables include PLS financing, non-performing financing (NPF), capital adequacy ratio (CAR), total assets (TA), Zakat, Infaq, and Shadaqah (ZIS), the Islamic financing rate, the exchange rate, inflation, and the Industrial Production Index (IPI).
Findings – The results indicate that in the short run, PLS financing is significantly influenced by CAR, TA, ZIS, and IPI. In the long run, however, PLS financing is predominantly determined by internal banking factors, specifically CAR and TA. Bank capitalization and asset size are critical to PLS financing dynamics, ensuring stability and responsiveness to internal financial conditions, thereby enhancing its viability within Indonesia’s dual banking system.
Implications – The findings suggest that Indonesian regulators and bank policymakers should focus on enhancing the long-term availability of PLS-based financing, establishing standardized monitoring frameworks, and improving financial transparency. Furthermore, fostering innovation in Sharia-compliant products and investing in capacity-building initiatives that integrate Islamic jurisprudence with modern finance are recommended to strengthen the sustainability and competitiveness of PLS financing.
Originality – This study contributes to the literature by providing an integrated empirical analysis of both internal bank-specific and external macroeconomic determinants of PLS financing in Indonesia, a comprehensive approach rarely explored in prior research.

Gen Z’s preference for Sharia fraudulent investments: A moral hazard view

Hamdan Fuadi — 2026-02-11

Purpose – This study aims to determine the influence of Islamic financial literacy, profit, religiosity, and affinity variables on Generation Z's preferences in Sharia fraudulent investment practices and to understand whether Generation Z tends to be involved in such practices.
Methodology – This research used 200 Generation Z respondents and analyzed them using the Structural Equation Modeling - Partial Least Squares (SEM-PLS) method. This method was used to test the relationships among the variables studied.
Findings – The results of the analysis show that low Sharia financial literacy has a significant positive effect on Generation Z's preference for fraudulent investment practices. On the other hand, profit, religiosity, and affinity do not have a significant influence on Generation Z's preferences in Sharia fraudulent investment practices.
Implications – These findings imply that the low financial literacy of Generation Z can increase their vulnerability to fraudulent investment practices. Therefore, efforts are needed to increase Sharia financial literacy, especially among Generation Z, to reduce the risk of falling into fraudulent investments. In addition, regulators and related parties must increase the supervision of illegal investment practices that take advantage of religious sentiments.
Originality – This research makes an original contribution by examining Generation Z's preferences for fraudulent Sharia investment practices, which is a new phenomenon that takes advantage of the high number of Muslims in Indonesia. This research also integrates the variables of Sharia financial literacy, religiosity, and affinity, which have not been widely explored in the context of Sharia fake investment.

A data envelopment analysis of Sharia stock listed companies on the Jakarta Islamic Index

Wiku Suryomurti — 2026-02-11

Purpose – This study analyzes the efficiency of companies listed on the Jakarta Islamic Index (JII) during the 2020–2023 period.
Method – This study applies data envelopment analysis (DEA) using total assets, equity, and operational expenses as input variables, with market capitalization and earnings per share (EPS) as output variables. Market capitalization is employed to capture a firm’s ability to convert internal resources into market-recognized value as shaped by investor perception.
Findings – The results indicate that most JII companies operate inefficiently, with efficiency scores below 0.2. Several benchmark firms form the efficiency frontier: Adaro Energy Indonesia (2022), Indo Tambangraya Megah (2022), Bumi Resources Minerals (2021), Unilever Indonesia (2021), and Aspirasi Hidup Indonesia (2021). The sector-wise analysis indicates that the financial sector exhibits the highest and most consistent scale efficiency. In contrast, from an industrial perspective, the transportation and energy sectors demonstrate the most optimal efficiency performance. Regarding ownership structure, state-owned enterprises consistently achieve higher scale efficiency than privately owned companies. Further analysis suggests that efficiency improvements are primarily driven by output performance, particularly market capitalization, highlighting the relevance of an output-oriented approach to long-term efficiency strategies.
Implications – This perspective suggests that efficiency in Sharia Stock Listed Companies depends not only on internal management performance, but also on external market perceptions that determine their market value.
Originality – This study offers originality by employing DEA approach to assess the efficiency of Sharia stock-listed companies in the JII, integrating sectoral, industrial, and ownership perspectives that have received limited attention in prior research.

Efficiency and improvement potential of Sharia insurance: Implications of the financial sector strengthening law

Sunarmo Sunarmo — 2026-02-12

Purpose – To compare efficiency conditions and potential improvements in the Sharia insurance company and examine its consistency with the law on strengthening and developing the financial sector.
Methodology – The research sample included 21 Sharia life and 20 general insurance companies. The secondary data used were sourced from the financial statements of Sharia insurance companies registered with the Financial Services Authority (OJK) and the Indonesian Sharia Insurance Association (AASI) for 2017–2023. The research method used a Data Envelopment Analysis (DEA) approach.
Findings – Sharia life insurance in Indonesia shows inefficient conditions, reflected in the low ratio of output to input due to the lack of business income, investment, and tabarru funds. In contrast, the general segment of Sharia was relatively more efficient, but burdened by high assets, liabilities, claims, and operational costs. The potential for improvement towards efficiency could be achieved by optimizing business income and Tabarru funds, as well as controlling inputs proportional to output. The Development and Strengthening of the Financial Sector Law (PPSK Law) policy played a strategic role in strengthening capital and implementing the Sharia unit spin-off obligations expected to form a more independent and competitive institutional structure.
Implications – The results have policy implications for regulators and industry players to strengthen the competitiveness of national Sharia insurance.
Originality – This research offers a major novelty, namely, comparing the efficiency performance of life insurance and general Sharia, as well as linking efficiency results and potential improvements with the implementation of the PPSK Law.

Beyond access: Islamic financial literacy and women’s empowerment

Bambang Sukoco — 2026-02-12

Purpose – This study examines the effect of Islamic financial literacy on women’s empowerment using Islamic financial inclusion as a mediating variable. In addition, digital financial literacy was examined to capture its complementary role in expanding women’s financial participation.
Methodology – Using data of 140 female who were or had been married, this group reflects household decision-making roles and provides valuable insights into women’s empowerment. The relationships among the variables were analyzed using structural equation modeling-partial least squares (SEM-PLS).
Findings – The results show that both Islamic financial literacy and digital financial literacy significantly enhance Islamic financial inclusion and women’s empowerment. However, Islamic financial inclusion does not significantly mediate the relationship between literacy (Islamic and digital) and women’s empowerment.
Implications – The findings emphasize the need to strengthen financial literacy programs, both digital and Islamic, as part of broader efforts to advance women's empowerment in OIC (Organization of Islamic Cooperation) member countries. Financial institutions and policymakers should integrate literacy initiatives with inclusion strategies to ensure that women fully benefit from Sharia-compliant financial services.
Originality – This study provides new evidence linking Islamic financial literacy, digital financial literacy, and Islamic financial inclusion to explain women’s empowerment. This offers insights into the pathways through which literacy and inclusion interact, particularly in the context of Islamic finance.

Do profit-and-loss sharing and regional growth buffer credit risk in Islamic rural banks?

Chaerani Nisa — 2026-02-12

Purpose – This study investigates how credit risk, profit-and-loss sharing (PLS) financing, and regional economic growth shape the profitability of Islamic rural banks in Indonesia and whether PLS portfolios and local conditions buffer the adverse effect of non-performing financing (NPF) on profitability through a moderating effect.
Methodology – The analysis uses a balanced panel of 135 Islamic Rural Banks (IRBs) for 2019–2024, combining bank-level data with Gross Regional Domestic Product (GRDP) per capita growth. Fixed-effects panel regressions with two- and three-way interactions between NPF, PLS measures (total PLS, mudharabah, musharakah), and regional growth were estimated, controlling for size, capital adequacy, efficiency, funding structure, and time effects.
Findings – The results demonstrate a robust negative association between non-performing financing (NPF) and return on assets (ROA). Mudharabah-based profit-and-loss sharing (PLS), rather than aggregate PLS or Musharakah alone, attenuates the impact of NPF. Similarly, higher regional growth weakens the marginal effect of credit risk. A negative and significant triple interaction indicates that Mudharabah intensity and favorable regional growth act as substitutes rather than complements, with the strongest mitigation of the NPF effect observed at low to moderate levels of both variables.
Implications – The evidence suggests that IRB managers and regulators should calibrate PLS portfolios for regional macroeconomic conditions. Understanding local growth environments can guide the PLS configurations that are most appropriate for promotion within supervisory areas.
Originality – This study is among the first to jointly examine the roles of PLS contract composition and regional economic growth in the credit-risk–profitability nexus of IRBs, showing how risk-sharing finance and local business cycles interact in shaping Islamic bank performance.