Setiawan Budi Utomo, Ratih Sekaryuni, Agus Widarjono, Achmad Tohirin and Heri Sudarsono
The purpose of this study is to identify and explore the role of Islamic financing in supporting development of halal industry in Indonesia.
Abstract
Purpose
The purpose of this study is to identify and explore the role of Islamic financing in supporting development of halal industry in Indonesia.
Design/methodology/approach
This research is divided into two studies. The first study uses survey-based quantitative method and the second study uses focus group discussion (FGD) method. Using a purposive and proportional sampling technique in the first study, this research collected 1,985 samples of Islamic financial products of business owners (demand-side) from all parts of Indonesia. The data were analyzed using the partial least square structural equation modeling approach. The authors also conducted FGDs, involving 35 participants from government, financial, social and education institutions (supply-side) as well as business owners (demand-side) in three separated times.
Findings
In the first study, it can be identified that literacy on Islamic finance, attitude and awareness strongly affect business owners’ intention to use Islamic financial products. It is also found that subjective norm significantly influences literacy, attitude and awareness. Interestingly, religiosity does not significantly affect attitude toward Islamic financial products. According to the FGD in the second study, this research generates several factors motivating business owners’ preference to choose conventional rather than Islamic financial products, including expensive pricing, less developed technology, bad service quality and the halal status of the products. The reason for insignificant results of religiosity on attitude in the first study is explained in the second study. Most users are utilitarians who mainly perceived the products based on the sought benefits provided by the products.
Practical implications
This research offers the government a road map showing the strategy to build Islamic financial ecosystem in Indonesia. The road map integrates supply-side, which includes government, financial industries, social and education institutions and scientific organizations, and demand-side, which includes business owners or entrepreneur associations.
Originality/value
This research provides a wide range of samples derived from business owners’ respondents of halal industry in all representative islands in Indonesia. Therefore, it gives more holistic and representative findings. In addition, the analysis in this research covers not only the demand-side but also the supply-side perspective. Lastly, this research provides an Islamic financial ecosystem model that integrates all stakeholders to improve halal industry performance as a whole.
Details
Keywords
Rangga Primadasa, Elisa Kusrini, Agus Mansur and Ilyas Masudin
This study aims to comprehensively identify and categorize key indicators for halal-sustainable supply chain management (HSSCM) tailored to small- and medium-sized enterprises…
Abstract
Purpose
This study aims to comprehensively identify and categorize key indicators for halal-sustainable supply chain management (HSSCM) tailored to small- and medium-sized enterprises (SMEs) in the food sector, emphasizing economic, environmental and social sustainability.
Design/methodology/approach
This paper uses integrated approaches such as decision-making trial and evaluation laboratory, interpretative structural model and MICMAC to investigate the interconnectedness between the economic, environmental, social and halal-specific criteria in the food sector for SMEs.
Findings
This study highlights 16 crucial indicators for HSSCM in SMEs within the food industry, organized into economic, environmental, social and halal-specific categories. The total relationship matrix shows important interdependencies between indicators, like operational costs and logistics, underscoring the necessity for a comprehensive management approach. Additionally, the cause-effect diagram and structural self-interaction matrix (SSIM) illustrate the hierarchical relationships among these indicators, aiding in strategic planning and decision-making.
Originality/value
This study integrates a broader range of indicators and reveals complex dependencies critical for managing halal supply chains effectively. This study also offers a robust framework for integrating halal practices and sustainability, supporting SMEs in adopting ethical, environmentally conscious business strategies.