DIGITAL SHARIA BANKING ADOPTION AND FINANCIAL INCLUSION MODELS FOR MICRO ENTERPRISES IN ASEAN
Indonesia Indonesia 
Singapore 
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Digital Financial Literacy, Digital Sharia Banking, Financial Inclusion
Abstract
Rapid digital transformation in the financial sector has created new opportunities to expand financial inclusion among underserved populations, particularly micro-enterprises that frequently encounter barriers to accessing formal financial services. Digital Sharia banking has emerged as a promising solution by integrating financial technology with Islamic principles, enabling more accessible, efficient, and ethically compliant financial services. Micro-enterprises play a vital role in ASEAN economies; however, limited access to financing, payment systems, and formal banking products continues to constrain their growth and sustainability. This study aims to examine the determinants of digital Sharia banking adoption and to develop a financial inclusion model for micro-enterprises in ASEAN. A quantitative cross-sectional design was employed involving 500 micro-enterprise owners from selected ASEAN countries. Data were collected through structured questionnaires and analyzed using Structural Equation Modeling (SEM). Findings reveal that perceived usefulness, trust, digital financial literacy, regulatory support, and Sharia compliance perception significantly influence digital Sharia banking adoption. Sharia compliance perception emerged as the strongest predictor of adoption behavior. Digital Sharia banking adoption was also found to have a significant positive effect on financial inclusion, enhancing access to financing, savings, payment services, and other formal financial products. The study concludes that sustainable financial inclusion among micro-enterprises requires an integrated approach combining technological innovation, institutional trust, regulatory support, and adherence to Islamic financial principles. Such a model can strengthen inclusive economic development across ASEAN economies.
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