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How does Islamic fintech promote the SDGs? Qualitative evidence from Indonesia

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  • Fahmi Ali Hudaefi

Abstract

Purpose - This study aims to explore the existing Islamic financial technology (fintech) lending in Indonesia. Doing so is to better understand in what way the fintech firms have been promoting the global movement of sustainable development goals (SDGs) in the local context. Design/methodology/approach - This study engages qualitative methods. This paper first reviews relevant literature related to fintech and establishes the substantive definition of Islamic fintech. Further, the existing literature of SDGs is explored to understand its original idea and its recent implementation, particularly in Indonesia. Following this, the official reports from the domestic regulators are referred to select the fintech firms which meet the criteria of Islamic fintech lending based on the proposed definition. The selected firms are then analysed based on several themes which best capture their position in promoting the SDGs. Finally, the discussion is linked to the recent performance of Indonesia in implementing SDGs. Findings - This work finds that the reviewed fintech firms have been promoting the idea of financial inclusion, for example, financing the underdeveloped sectors such as agriculture and small and micro enterprises (SMEs). Furthermore, the selected fintech firms are also found to collect and distribute Islamic social funds such asinfaq(charity spending), waqf (endowment) andsadaqah(voluntary charity). Besides, the firms are also found to initiate charity programmes for underprivileged community. In some degree, these findings are synonymous of the firms’ effort in promoting SDG of ending poverty (SDG 1) and hunger (SDG 2) and reducing the inequalities (SDG 10). Research limitations/implications - The discussion of this work does not provide any positivist generalisation due to the method used. Practical implications - The Indonesian Government is advised to legally engage with the existing fintech firms and other related stakeholders to best solve its recent issue of the declining trend in SDG 15 (life on land). Social implications - This work elaborates in what way the Islamic fintech lending has been promoting the SDGs in Indonesian context. In some extent, such discussion can best challenge the social issue of fintech which has been stigmatised of bringingmafsadah(harm), as subjectively claimed by one particular religious group in Indonesia. Originality/value - This study is among the pioneers which offers the definition of Islamic fintech and further explains its position in endorsing the global movement of SDGs.

Suggested Citation

  • Fahmi Ali Hudaefi, 2020. "How does Islamic fintech promote the SDGs? Qualitative evidence from Indonesia," Qualitative Research in Financial Markets, Emerald Group Publishing Limited, vol. 12(4), pages 353-366, March.
  • Handle: RePEc:eme:qrfmpp:qrfm-05-2019-0058
    DOI: 10.1108/QRFM-05-2019-0058
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    Citations

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    Cited by:

    1. Zhang, Hui & Fahlevi, Mochammad & Aljuaid, Mohammed & Beşer, Nazife Özge & Cabas, Meral & lominchar, Jose, 2024. "A machine learning and quantile analysis of FINTECH and resource efficiency in achieving sustainable development in OECD countries," Resources Policy, Elsevier, vol. 92(C).
    2. Hasnan Baber & N M Baki Billah, 2022. "Fintech and Islamic Banks - an integrative model approach to predict the intentions," Review of Applied Socio-Economic Research, Pro Global Science Association, vol. 24(2), pages 24-45, December.
    3. Kwee Kim Peong, 2021. "Behavioural Intention of Commercial Banks' Customers towards Financial Technology Services," GATR Journals jfbr180, Global Academy of Training and Research (GATR) Enterprise.
    4. Henry Kuswantoro & Mahfud Sholihin & Hadrian Geri Djajadikerta, 2023. "Exploring the implementation of sustainable development goals: a comparison between private and state-owned enterprises in Indonesia," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(10), pages 10799-10819, October.
    5. Yu, Tiffany Hui-Kuang & Huarng, Kun-Huang, 2024. "Causal analysis of SDG achievements," Technological Forecasting and Social Change, Elsevier, vol. 198(C).
    6. Pandey, Dharen Kumar & Hassan, M.Kabir & Kumari, Vineeta & Zaied, Younes Ben & Rai, Varun Kumar, 2024. "Mapping the landscape of FinTech in banking and finance: A bibliometric review," Research in International Business and Finance, Elsevier, vol. 67(PA).

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