The Role of Islamic Banking in Indonesia's Economic Growth

Abstract

Islamic banking has become a vital part of global finance, particularly in Indonesia, where the majority of the population is Muslim. The presence of Islamic banking in Indonesia, both for the public and the industrial sector, has a significant impact. This is due to the public's need for banking services, whether to strengthen capital or store funds, which have become an essential part of everyday life. This study aims to analyze the role of Islamic banks in economic growth in Indonesia. This study uses a descriptive qualitative method with a library study approach. The results of this study indicate that Islamic banking makes a significant contribution to supporting economic growth in Indonesia, particularly through financing based on Islamic principles that focus on empowering MSMEs. Through the distribution of financing to the community (MSMEs) that is productive, it will have a significant impact on economic growth.