Green Islamic Finance for SMES to Achieve Sustainable Development Goals


  • Siti Amerieska State Polythecnic of Malang, Indonesia
  • Sri Ningsih Accounting Department, Airlangga University, Indonesia



Green Islamic Finance, SMEs, SDGs


Purpose — We provide a framework for green Islamic finance for impactful small and medium companies (SMEs) to accomplish the Sustainable Development Goals (SDGs) in this study. Green Islamic finance emerges from a discussion of the relevant ideas that underpin charity, private sector initiatives, and public sector facilitation. The agreement of these three parties on the impact criteria is a necessary precondition for financing to occur. As a result, we first created the 4Zeros & SS (zero-waste, zero-emissions, zero-interest, zero-foreclosures, and service to society) green-based impact criterion for SMEs. Following that, we used a financial engineering method to build green products that included the three motivations. If these three incentives are identified and brought together, financial contracts may be incentive compatible and effective.

Method — We use (a) Values ​​Creation Shariah Accounting, (b) the pillars of sustainable human development (equality, productivity, empowerment and sustainability) as SDGS and (c) ESG and circular economy concerns  as green based  Islamic finance.

Result — This study design will help to achieve multidimensional human development as envisioned by the Value Crehariah Accounting and the SDGs. Environmental, social, and governance best practices, as well as national development goals, must be integrated into impactful businesses.

Novelty — This study answer phenomenon occurs for businesses must be aware of environmental, social, and governance challenges, as well as other global activities, if we are to achieve sustainability.