SME’s Access to Islamic financing for Enhancing Energy Efficiency: a Fuzzy AHP approach
Keywords:
Islamic financing, energy efficiency, small and medium enterprises, fuzzy ahpAbstract
Energy efficiency remains a significant challenge for Small and Medium Enterprises (SMEs) in Indonesia. It contributes to high operational costs and limits their competitiveness. This research explores the key factors influencing SMEs' access to Islamic financing for energy efficiency. The study employs the Fuzzy Analytical Hierarchy Process (AHP) with responses from 10 experts, including industry players, academicians, and regulators. Data were collected through focus group discussions, followed by additional interviews to validate and enrich the analysis. The findings indicate that financial health is the top priority criterion. This is followed by compliance with Islamic finance principles and management capabilities. The results highlight the importance of Islamic financial literacy and management skills in improving SMEs’ access to funding. Additionally, developing partnerships with Islamic financial institutions and implementing energy-efficient technologies are crucial strategies for enhancing financial sustainability. This research provides valuable insights for policymakers. Structured financial literacy programs and advisory centers should be introduced to help businesses navigate Islamic financing options. Policies should also encourage the development of SME-friendly Islamic financial products to reduce risk perceptions. Furthermore, tax incentives, Green Sukuk, and low-cost refinancing options should be introduced to promote energy-efficient investments. Clear regulatory guidelines and the integration of Sharia-compliant fintech solutions will ensure compliance. Ultimately, these efforts will help reduce energy poverty and enhance the competitiveness of SMEs in Indonesia.
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