The Twin Objectives of Achieving SDGs Through MSMEs Leveraging Islamic Finance in Indonesia and Malaysia

Sazir Nsubuga Mayanja
St Peter's University, Uganda

Tulus Tambunan
Faculty of Economics and Business, Universitas Trisakti, Jakarta, Indonesia



Based on secondary data and a review of key literature, the main aim of this paper is to examine the role of Islamic finance in financing the development of MSMEs and to discuss how it relates to the achievement of SDGs in Indonesia and Malaysia. It concludes that as a contribution to filling the financing gap, in financing MSMEs and SDGs, Shariah-compliant products are being offered to MSMEs in these two Asian Countries, largely by way of leasing and asset resale arrangements, with a bouquet of profit and loss-sharing contracts. Combining the principles of Islamic finance, the advancements in technology, and financial technology (fintech), such as artificial intelligence, robotics, blockchains, and other cutting-edge technologies have gradually found space in the banking world.