The role of Sharia banking in strengthening the assets of village-owned enterprises in Indonesia

Abstract

AbstractOne of the ways to increase the financial capacity of village-owned enterprises is to strengthen their own assets. Sharia Banking, as a financial institution that carries out intermediation and social functions, has a strategic function in strengthening the assets of village-owned enterprises. Assets strengthening of village-owned enterprises, which can be carried out by Sharia banking through its intermediation and social functions, has become an interesting subject to research. This research combines normative legal research with analytical descriptive research parameters, especially research on secondary data in the form of primary, secondary, and tertiary legal materials, by collecting systematic information regarding relevant facts and rules. Strengthening the assets of village-owned enterprises can be carried out through the intermediation function of Sharia Banking, namely through murabahah, mudharabah, and musyarakah financing. Meanwhile, through the social function of Sharia Banking, strengthening the assets of village-owned enterprises can be sourced from grant funds and other social funds or can come from cash waqf funds and utilized through managing the potential business activities of village-owned enterprises. This research is expected to be useful for village-owned enterprises and Sharia Banking, especially in terms of increasing the assets of village-owned enterprises.

Keywords

• Assets
• village-owned enterprises
• financing
• social function
• Sharia banking
• Heng Choon (Oliver) Chan, Department of Social Policy, Sociology, and Criminology, University of Birmingham, Birmingham, UK