ACCESS TO SHARIA FINANCING AND THE IMPLEMENTATION OF THE SHARIA FINANCE QANUN POLICY TO IMPROVE THE PERFORMANCE OF MSMES IN ACEH
Abstract
This study investigates the effect of the implementation of Qanun Aceh Number 11 of 2018 concerning Sharia Financial Institutions (LKS) on access to financing and the performance of Micro, Small, and Medium Enterprises (MSMEs) in Aceh. Since the existence of this Qanun, all financial institutions in Aceh must operate based on sharia principles, which results in a different financial ecosystem. MSMEs as the foundation of the local economy are highly dependent on the availability of capital. The purpose of this study is to assess the extent to which these policy changes have helped or hindered MSMEs in obtaining the right financing. A qualitative approach is used in this study through literature review and policy analysis to get an overview of existing challenges and opportunities. The findings of this study reveal that although Qanun aims to build a fair and sustainable business environment, its implementation faces several obstacles, such as a lack of understanding of Islamic finance among MSME actors, problems in the administrative process, and a lack of innovative financing products. On the other hand, this policy also provides a great opportunity for Islamic banks to increase the target of disbursement of funds to MSMEs, which was previously regulated by Bank Indonesia Regulations. Islamic financial institutions, for example BSI, have introduced special programs to improve the capabilities of MSMEs. Thus, collaboration between the government, academics, and financial institutions is very important to maximize the effect of Qanun in order to boost the performance and competitiveness of MSMEs in Aceh
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