Islamic Fintech for Financial Inclusion in MSMEs: Comparative Analysis of Egypt and Indonesia Evidence
DOI:
https://doi.org/10.61455/jeisr.v2i02.630Keywords:
Islamic Fintech, Financial Inclusion, MSMEs, Sharia Compliance, Egypt and IndonesiaAbstract
Objective: This study aims to comparatively analyse the role of Islamic fintech in promoting financial inclusion for Micro, Small, and Medium Enterprises (MSMEs) in Egypt and Indonesia, two of the world's largest Muslim-majority economies. Theoretical framework: The study is grounded in the concepts of financial inclusion, Islamic finance, digital financial ecosystems, and Maqasid al-Shariah, which emphasise equitable access to financial services, sustainable economic development, and the expansion of Sharia-compliant digital finance. Literature review: Existing studies primarily examine Islamic fintech or financial inclusion within individual countries, with limited comparative evidence integrating official regulatory and industry data from Egypt and Indonesia. This study addresses that gap by providing a unified comparative perspective. Methods: A qualitative comparative analytical approach based on secondary data was employed using the World Bank Global Findex (2011–2025), Central Bank of Egypt (CBE) reports, Financial Services Authority (OJK) and DSN-MUI regulatory documents, Egyptian Islamic Finance Association (EIFA) reports, and the DinarStandard/Elipses Global Islamic Fintech Report series (2020/21–2025/26). Results: Indonesia demonstrates a more mature Islamic fintech ecosystem supported by an earlier and dedicated Sharia fintech regulatory framework, leading to stronger financial inclusion and greater global competitiveness. Although Egypt has significantly improved financial inclusion, with the CBE reporting a rise from 27% in 2016 to 77.6% in 2025 alongside substantial growth in MSME financing, Islamic banking assets and fintech development remain comparatively limited. Implications: The findings highlight the importance of strengthening Sharia-specific fintech regulation and expanding Islamic digital financial services to accelerate MSME inclusion. Novelty: This study integrates fragmented official and industry evidence into a single comparative framework, providing an updated benchmark for evaluating Islamic fintech-driven financial inclusion in Egypt and Indonesia.
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