Optimizing Islamic Financial Instruments in Indonesia to Support SDGs: Maqashid Syariah Perspective
DOI:
https://doi.org/10.23917/profetika.v26i01.9217Keywords:
optimizing, islamic finance, sdgs, maqashid syariah, sustainable developmentAbstract
Objective: Examine how these instruments can be aligned with global development goals while grounded in Islamic principles. This study aims to analyze the optimization of various Islamic financial instruments, such as Zakah, Waqf, Sukuk, and Islamic banking, to support the achievement of SDGs. Theoretical Framework: Maqashid Syariah, which emphasizes the protection of essential human values such as faith, life, intellect, lineage, and wealth, the study highlights the role of Islamic finance in promoting social welfare, economic justice, and environmental sustainability. Literature Review: Conducted, drawing from academic sources, regulatory documents, and practical implementations of Islamic finance in Indonesia and other Muslim-majority countries. Methods: The method used in this study is a qualitative approach with literature study techniques, analyzing relevant literature and Islamic financial policies in Indonesia and the world. Results: The study indicate that Islamic financial instruments can contribute significantly to supporting SDGs, especially in the aspects of poverty alleviation (SDG 1), quality education (SDG 4), economic equality (SDG 10), and sustainable consumption and production (SDG 12). However, there are challenges in optimizing implementation, such as regulations that are not yet uniform, low Islamic financial literacy, and limited innovation in instrument development. Implications: This study recommends synergy between the government, Islamic financial institutions, academics, and the community in strengthening a sustainable Islamic financial ecosystem. With proper optimization, Islamic finance can be an alternative solution in supporting a green, inclusive, and equitable economy by the principles of Maqashid Syariah and the goals of the SDGs. Novelty: This research lies in its integrative approach that bridges the ethical vision of Maqashid Syariah with the contemporary global development agenda, offering a holistic and faith-based framework for sustainable economic progress in Indonesia.
References
[1] S. Alhammadi, “Expanding financial inclusion in Indonesia through Takaful: opportunities, challenges and sustainability,” J. Financ. Report. Account., Jan. 2023, doi: https://doi.org/10.1108/JFRA-05-2023-0256.
[2] S. A. R. Rizvi, P. K. Narayan, A. Sakti, and F. Syarifuddin, “Role of Islamic banks in Indonesian banking industry: an empirical exploration,” Pacific-Basin Financ. J., vol. 62, p. 101117, 2020, doi: https://doi.org/10.1016/j.pacfin.2019.02.002.
[3] A. Barata, “Strengthening National Economic Growth And Equitable Income Through Sharia Digital Economy In Indonesia,” J. Islam. Monet. Econ. Financ., vol. 5, no. 1, May 2019, doi: https://doi.org/10.21098/jimf.v5i1.1053.
[4] F. D. Abdullah, M. S. Is, and S. M. Wiwaha, “Contemporary Challenges for Sharia Financial Institutions to Increase Competitiveness and Product Innovation Perspective of Sharia Economic Law: Evidence in Indonesia,” MILRev Metro Islam. Law Rev., vol. 3, no. 2, pp. 141–173, 2024, doi: https://doi.org/10.32332/milrev.v3i2.9202.
[5] T. Trimulato, “The Role Sharia Non-Bank Financial Institutions To Support SDGS Program,” AL-ARBAH J. Islam. Financ. Bank., vol. 4, no. 1, pp. 79–106, 2022, doi: https://doi.org/10.21580/al-arbah.2022.4.1.14668.
[6] N. Ghoniyah and S. Hartono, “How Islamic and conventional bank in Indonesia contributing sustainable development goals achievement,” Cogent Econ. Financ., vol. 8, no. 1, p. 1856458, Jan. 2020, doi: https://doi.org/10.1080/23322039.2020.1856458.
[7] F. A. Hudaefi, “How does Islamic fintech promote the SDGs? Qualitative evidence from Indonesia,” Qual. Res. Financ. Mark., vol. 12, no. 4, pp. 353–366, Jan. 2020, doi: https://doi.org/10.1108/QRFM-05-2019-0058.
[8] Wartoyo and N. Haida, “The Actualization Of Sustainable Development Goals (SDGs) And Indonesia’s Economic Growth On Islamic Economic,” Iqtishaduna J. Ekon. dan Keuang. Islam, vol. 14, no. 1, pp. 107–124, 2023.
[9] M. Nouman, M. F. Siddiqi, K. Ullah, and S. Jan, “Nexus between higher ethical objectives (Maqasid Al Shari’ah) and participatory finance,” Qual. Res. Financ. Mark., vol. 13, no. 2, pp. 226–251, Jan. 2021, doi: https://doi.org/10.1108/QRFM-06-2020-0092.
[10] M. Alhejaili, “Harmonising derivatives with Shari’ah: ethical practices and regulatory insights,” Int. J. Islam. Middle East. Financ. Manag., vol. ahead-of-print, no. ahead-of-print, Jan. 2025, doi: https://doi.org/10.1108/IMEFM-03-2024-0163.
[11] J. Iqbal, I. Ahmad, M. I. Anwar, and G. M. Anjum, “Islamic Economic Principles and Their Relevance to Modern Business Practices in Pakistan,” Int. Res. J. Manag. Soc. Sci., vol. 5, no. 2 SE-Articles, pp. 118–126, Jun. 2024, [Online]. Available: https://irjmss.com/index.php/irjmss/article/view/277
[12] M. U. Chapra, The Future of Economics: An Islamic Perspective. United Kingdom: The Islamic Foundation Markfield Conference Centre, 2000.
[13] V. Rivai and A. Arifin, Islamic Banking: Sebuah teori, konsep, dan aplikasi., 2010. Jakarta: PT Bumi Aksar, 2010.
[14] J. Auda, Maqasid al-Shariah as philosophy of Islamic law: a systems approach. London: International Institute of Islamic Thought, 2008.
[15] A. W. Dusuki and N. I. Abdullah, “Maqasid al-Shariah, Maslahah, and corporate social responsibility,” Am. J. Islam. Soc. Sci., vol. 24, no. 1, p. 25, 2007.
[16] Sugeng Santoso et al., “Developing an Integrated Innovation Ecosystem to Strengthen Islamic Economy in Indonesia,” IQTISHODUNA J. Ekon. Islam, vol. 13, no. 2, pp. 681–706, 2024, doi: https://doi.org/10.54471/iqtishoduna.v13i2.2498.
[17] M. A. C. Abul Hassan, Islamic Economics: Theory and Practice (1st ed.). London: Routledge, 2019. doi: https://doi.org/10.4324/9780429432088.
[18] M. Ustaoğlu, “Muhammed Abdul Mannan,” in The Palgrave Encyclopedia of Islamic Finance and Economics, M. Ustaoglu and C. Çakmak, Eds., Cham: Springer International Publishing, 2023, pp. 1–4. doi: https://doi.org/10.1007/978-3-030-93703-4_322-1.
[19] Z. Iqbal and A. Mirakhor, Ethical dimensions of Islamic finance: Theory and practice. Springer, 2017.
[20] Lexy J. Moleong, Metodologi Penelitian Kualitatif. Bandung: PT Remaja Rosdakarya, 2011.
[21] M. B. Miles, A. M. Huberman, and J. Saldana, Qualitative data analysis: A methods sourcebook. Sage Publications, Inc, 2014.
[22] S. Shahimi and S. A. Zahari, “Principles of Sustainability in Islamic Finance,” in Islamic Finance and Sustainability, London: Routledge, 2025, p. 30.
[23] Alfitri, Islamic Law and Society in Indonesia: Corporate Zakat Norms and Practices in Islamic Banks. London: Routledge, 2022. doi: https://doi.org/10.4324/9781003183112.
[24] A. Ascarya, “The role of Islamic social finance during Covid-19 pandemic in Indonesia’s economic recovery,” Int. J. Islam. Middle East. Financ. Manag., vol. 15, no. 2, pp. 386–405, Jan. 2022, doi: https://doi.org/10.1108/IMEFM-07-2020-0351.
[25] M. Ariff and M. Iqbal, The foundations of Islamic banking: Theory, practice and education. Edward Elgar Publishing, 2011.
[26] U. Hayat and A. Malik, Islamic Finance: Ethics, Concepts, Practice. CFA Institute Research Foundation, 2014.
[27] R. Wilson, The development of Islamic finance in the GCC. London: London School of Economics and Political Science, 2009.
[28] R. Yaya, I. M. Saud, M. K. Hassan, and M. Rashid, “Governance of profit and loss sharing financing in achieving socio-economic justice,” J. Islam. Account. Bus. Res., vol. 12, no. 6, pp. 814–830, 2021, doi: https://doi.org/10.1108/JIABR-11-2017-0161.
[29] K. Ben Jedidia and H. Hamza, “Does PLS in Islamic banking limit excessive money creation?,” J. Islam. Account. Bus. Res., vol. 15, no. 3, pp. 422–442, 2024, doi: https://doi.org/10.1108/JIABR-02-2022-0047.
[30] S. Alhammadi, K. O. Alotaibi, and D. F. Hakam, “Analysing Islamic banking ethical performance from Maqāṣid al-Sharī‘ah perspective: evidence from Indonesia,” J. Sustain. Financ. Invest., vol. 12, no. 4, pp. 1171–1193, 2022, doi: https://doi.org/10.1080/20430795.2020.1848179.
[31] Ash-Syatibi, Al-Muwafaqat fi Usul al-Shariah Terjemahan oleh Ibrahim Musa dalam buku “Maqasid alShariah as Philosophy of Islamic Law: A Systems Approach”. International Institute of Islamic Thought. 2006.
[32] M. U. Chapra, Islam dan Pembangunan Ekonomi. Yogyakarta: Gema Insani Press, 2000.
[33] A. Dairoby and M. F. Akbar, “The Role of Zakat in Achieving SDGs : A Literature Review,” in The 7th International Conference of Zakat (ICONZ) Proceeding, 2023, pp. 773–779. doi: https://doi.org/10.37706/iconz.2023.602.
[34] A. D. Saputra and A. Rahmatia, “Islamic Financial Literacy Index of Students: Bridging SDGs of Islamic Finance,” Econ. Financ. Indones., vol. 67, no. 1, p. 34, 2021, doi: https://doi.org/10.47291/efi.v67i1.730.
[35] M. K. Hassan, A. Muneeza, and R. Hasan, “Islamic Finance and Sustainable Development.” in Elements in the Economics of Emerging Markets. Cambridge University Press, Cambridge, 2025. doi: DOI: https://doi.org/10.1017/9781009464963.
[36] L. Raimi, I. A. Abdur-Rauf, and B. Olaide Raimi, “Interdependence of halal entrepreneurship and Islamic finance for creating a strong halal ecosystem,” J. Islam. Mark., vol. 16, no. 3, pp. 929–954, 2025, doi: https://doi.org/10.1108/JIMA-05-2023-0162.
[37] M. U. Chapra, Islam and the Economic Challenge. International Institute of Islamic Thought (IIIT), 1992.
[38] Z. Hasan, “Distribution Of Zakat Funds To Achieve SDGs Through Poverty Alleviation In Baznas Republic Of Indonesia,” AZKA Int. J. Zakat & Soc. Financ., vol. 1, no. 1, pp. 25–43, 2020, doi: https://doi.org/10.51377/azjaf.vol1no01.7.
[39] P. Utami, T. Suryanto, M. Nasor, and R. A. Ghofur, “The Effect Digitalization Zakat Payment Against Potential of Zakat Acceptance in National Amil Zakat Agency,” Iqtishadia, vol. 13, no. 2, p. 216, 2020, doi: https://doi.org/10.21043/iqtishadia.v13i2.7809.
[40] S. A. Shaikh, A. G. Ismail, and M. H. Mohd Shafiai, “Application of waqf for social and development finance,” ISRA Int. J. Islam. Financ., vol. 9, no. 1, pp. 5–14, 2017, doi: https://doi.org/10.1108/IJIF-07-2017-002.
[41] M. O. Mohammed, M. C. El Amri, and S. Guedira, “Edu-Waqf model – an analysis of selected OIC member countries,” in Awqaf-led Islamic Social Finance, London: Routledge, 2020.
[42] M. Haron, M. K. Kamarudin, N. A. M. Fauzi, M. M. Ariff, and M. Z. Zainuddin, “Cash waqf collection: any potential factors to influence it?,” Int. J. Business, Econ. Law, vol. 9, no. 2, pp. 27–33, 2016.
[43] R. Hassan, N. M. Abu Bakar, and N. H. Akmal Abu Bakar, “A Review on Governance and Best Practices in Waqf Management for Sustainable Development in Selected Malaysian States and Other Countries,” in Towards a Post-Covid Global Financial System, M. K. Hassan, A. Muneeza, and A. M. Sarea, Eds., Emerald Publishing Limited, 2022, pp. 161–184. doi: https://doi.org/10.1108/978-1-80071-625-420210009.
[44] R. Hasan, A. U. F. Ahmad, and T. Parveen, “Sukuk risks – a structured review of theoretical research,” J. Islam. Account. Bus. Res., vol. 10, no. 1, pp. 35–49, 2019, doi: https://doi.org/10.1108/JIABR-06-2015-0026.
[45] F. Faizi, A. S. Kusuma, and P. Widodo, “Islamic green finance: mapping the climate funding landscape in Indonesia,” Int. J. Ethics Syst., vol. 40, no. 4, pp. 711–733, 2024, doi: https://doi.org/10.1108/IJOES-08-2023-0189.
[46] N. Laila, R. Sukmana, D. I. Hadiningdyah, and I. Rahmawati, “Critical assessment on cash waqf-linked sukuk in Indonesia,” Qual. Res. Financ. Mark., 2024, doi: https://doi.org/10.1108/QRFM-11-2023-0291.
[47] M. S. Antonio, Bank Islam: Dari Teori ke Praktik. Jakarta: Gema Insani, 2001.
[48] L. Judijanto, “Implementation of Zakat Law in Empowering the Islamic Community’s Economy in Indonesia,” Easta J. Law Hum. Rights, vol. 2, no. 03, pp. 136–146, 2024, doi: https://doi.org/10.58812/eslhr.v2i03.281.
[49] I. Butt, N. Ahmad, A. Naveed, and Z. Ahmed, “Determinants of low adoption of Islamic banking in Pakistan,” J. Islam. Mark., vol. 9, no. 3, pp. 655–672, 2018, doi: https://doi.org/10.1108/JIMA-01-2017-0002.
[50] M. M. Alshater, I. Saba, I. Supriani, and M. R. Rabbani, “Fintech in islamic finance literature: A review,” Heliyon, vol. 8, no. 9, p. e10385, 2022, doi: https://doi.org/10.1016/j.heliyon.2022.e10385.
[51] I. Qizam, I. Berakon, and H. Ali, “The role of halal value chain, Sharia financial inclusion, and digital economy in socio-economic transformation: a study of Islamic boarding schools in Indonesia,” J. Islam. Mark., vol. 16, no. 3, pp. 810–840, 2025, doi: https://doi.org/10.1108/JIMA-03-2024-0108.
[52] F. H. L. Chong, “Enhancing trust through digital Islamic finance and blockchain technology,” Qual. Res. Financ. Mark., vol. 13, no. 3, pp. 328–341, 2021, doi: https://doi.org/10.1108/QRFM-05-2020-0076.
[53] M. I. Anjum, “An Islamic critique of rival economic systems’ theories of interest,” Int. J. Ethics Syst., vol. 38, no. 4, pp. 598–620, 2022, doi: https://doi.org/10.1108/IJOES-08-2021-0155.
[54] M. Ahmad, “An empirical study of the challenges facing zakat and waqf institutions in Northern Nigeria,” ISRA Int. J. Islam. Financ., vol. 11, no. 2, pp. 338–356, Jan. 2019, doi: https://doi.org/10.1108/IJIF-04-2018-0044.
Submitted
Accepted
Published
Issue
Section
License
Copyright (c) 2025 Ahmad Kholil, Muhammad Zuardi, Amrin, Juryatina
This work is licensed under a Creative Commons Attribution 4.0 International License.
