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

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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 as infaq (charity spending), waqf (endowment) and sadaqah (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 bringing mafsadah (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.

Related collections

Most cited references 15

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A typology of reviews: an analysis of 14 review types and associated methodologies.

Maria J Grant, Andrew Booth (2009)

The expansion of evidence-based practice across sectors has lead to an increasing variety of review types. However, the diversity of terminology used means that the full potential of these review types may be lost amongst a confusion of indistinct and misapplied terms. The objective of this study is to provide descriptive insight into the most common types of reviews, with illustrative examples from health and health information domains. Following scoping searches, an examination was made of the vocabulary associated with the literature of review and synthesis (literary warrant). A simple analytical framework -- Search, AppraisaL, Synthesis and Analysis (SALSA) -- was used to examine the main review types. Fourteen review types and associated methodologies were analysed against the SALSA framework, illustrating the inputs and processes of each review type. A description of the key characteristics is given, together with perceived strengths and weaknesses. A limited number of review types are currently utilized within the health information domain. Few review types possess prescribed and explicit methodologies and many fall short of being mutually exclusive. Notwithstanding such limitations, this typology provides a valuable reference point for those commissioning, conducting, supporting or interpreting reviews, both within health information and the wider health care domain.