Phenomenological Analysis of Sharia Financing on the Growth of Micro, Small, and Medium Enterprises (MSMEs) in the Halal Sector

Abstract

This qualitative research aims to explore in depth the influence of Islamic financing on the growth of MSMEs in the halal sector, with a focus on the mechanisms, non-financial benefits, challenges, and perceptions of business actors. This research uses a phenomenological approach. Data were collected through in-depth interviews with 12 MSME owners in the halal sector (food, fashion, cosmetics) who are customers of Islamic banks and BMTs, as well as 4 representatives from Islamic financial institutions. Data were analyzed using thematic analysis techniques. The results of the study revealed five main themes: (1) Islamic financing acts as a catalyst for business expansion and increased production capacity; (2) Partnership contracts (musyarakah/mudharabah) create closer partnership relationships and provide added value in the form of mentoring; (3) Value congruence between Islamic principles in business and financing creates inner peace and spiritual motivation; (4) Limited Islamic financial literacy is an obstacle in utilizing non-murabahah contracts; (5) Mentoring from LKS is a key factor that strengthens the positive impact of financing. This research provides a rich and in-depth perspective from the perspective of business actors, revealing qualitative aspects such as spiritual motivation and the strength of partnership relationships that are often overlooked in quantitative approaches. These findings are important for the development of a more effective and sustainable growth-oriented sharia financing model.