Ethical Entrepreneurship among Muslim Gen-Z in Indonesia: Islamic Financial Literacy, Self-Efficacy, and Ethical Habitus among Muslim Gen-Z Entrepreneurs in Palopo

Abstract

This study explores the entrepreneurial experiences of Muslim Generation Z entrepreneurs in Palopo City, Indonesia, with particular attention to how Islamic financial literacy, self-efficacy, and Islamic business ethics are understood and practiced within digitally mediated business environments. Grounded in the socio-religious and cultural context of Indonesian Islam, the research adopts a qualitative phenomenological approach to examine how young Muslim entrepreneurs construct meaning, internalize moral values, and sustain their businesses in everyday economic practices. Data were collected through in-depth interviews with fifteen purposively selected participants and analysed using Colaizzi’s phenomenological method. The findings reveal four interrelated themes. First, Islamic financial literacy is experienced as practical-moral awareness, reflected in transparent pricing, separation of personal and business finances, and avoidance of ambiguous transactions. Second, self-efficacy emerges as psychological-spiritual capital shaped by mastery experiences, social support, and Islamic concepts such as ikhtiyār (effort) and tawakkal (trust in God). Third, Islamic business ethics operate as an internalized moral habitus reinforced by Bugis-Luwu cultural values, including lempu’, siri’, and amānah. Fourth, business sustainability is achieved through the integration of Islamic identity, local culture, and digital practices, forming a distinctive model of ethical digital entrepreneurship. Conceptually, this study contributes a phenomenological perspective that highlights the ethical, cultural, and spiritual dimensions of Muslim Gen-Z entrepreneurship, while offering practical implications for context-sensitive entrepreneurship development programs in Indonesia.