The Role of Islamic Social Finance Institution to Building Halal Industry

Abstract

This study aims to analyze the role of Islamic social finance institutions in building the halal industry in Indonesia. Five hypotheses were formulated, and PLS-SEM was used to estimate and test the hypothesized model. The results show that only two hypotheses are supported. Zakat institution has a significant effect on building the halal industry and reduce the practice of conventional moneylenders. It implies that with Islamic social finance institution can develop halal industry and reduced Riba. So, there are solutions that have great potential. If the halal industry and Islamic social finance institution can be well integrated, it can help the process of developing the halal industry. The solution is in the Islamic social finance is Zakat and Wakaf.