The Transformation of Sharia Savings and Financing Cooperatives (KSPPS) in Realizing Financial Inclusion and Economic Empowerment Based on Maqashid al-Shariah

Abstract

The transformation of Sharia microfinance institutions is a crucial component of Sharia economic development at the community level. Sharia Savings, Loans, and Financing Cooperatives (KSPPS) function not only as financial intermediaries but also hold strategic potential to expand public access to financial services, provide financing for micro and small business operators, and foster the economic empowerment of their members. This study aims to analyze the transformation of KSPPS in achieving financial inclusion and economic empowerment grounded in Maqashid al-Shariah (the objectives of Sharia). A qualitative approach with a case study design was employed. Data were gathered through in-depth interviews, observation, documentation review, and discussion forums involving board members, management, Sharia supervisors, staff, general members, and members who received financing for productive activities. Data analysis proceeded through stages of data condensation, data display, conclusion drawing, and verification. The study's analytical framework integrates institutional transformation, service transformation, financial inclusion, economic empowerment, and Maqashid al-Shariah into a unified whole. Maqashid al-Shariah serves as a lens to assess the extent to which KSPPS activities transcend mere transaction execution and institutional sustainability, actively generating public benefit (maslahah) through the protection of religion, life, intellect, lineage, and wealth.