Empirical Evidence of the Impact of Islamic Financial Inclusion on Human Welfare of Maqashid Sharia Perspective in Indonesia

Abstract

This study aims to determine the effect of Islamic financial inclusion using 3 (three) dimensions, namely accessibility, availability, and use (usage of banking services) of Islamic banking in Indonesia on the concept of welfare which includes 5 (five) elements: protection (hifz) of religion (din), mind ('aql), soul (nafs), offspring (nasl), and property (mal) which is the goal of Islamic sharia in all aspects of life. The Islamic financial inclusion components represented by several variables, namely the total number of third-party funds and financing, the total number of deposit accounts, and Automated Teller Machines (ATM) of Islamic banking. Meanwhile, the Islamic Human Development Index (I-HDI) is a suggested variable that represents welfare in the perspective of maqashid sharia. The research data used is annual data from 2010-2019 and then analyzed by multiple linear regression method. The result shows that Islamic financial inclusion has a significant effect on people's welfare in Indonesia. Variable availability (availability) and the use of Islamic banking services (usage of banking services) have a real influence, but not so on the variable accessibility (accessibility). The increase in the use of Islamic financial services indicated by the increase in third-party funds and financing in Islamic banking will also improve human welfare. The other word, the increase of ATMs (Automated Teller Machines) numbers reduces the human welfare in Indonesia.