Analysis of the Implementation of Islamic Finance on Economic Welfare among Muslim Communities

The implementation of Islamic finance has become one of the main instruments in improving economic welfare among Muslim communities. However, challenges such as low Islamic financial literacy and limited access to financial services still hinder the optimization of this system. The purpose of this research is to examine the impact of Islamic finance implementation on the economic welfare of Muslim communities and to identify the mediating role of Islamic financial literacy in enhancing this effect. The study employed a quantitative approach with a survey method involving 200 respondents from various age and income groups in a specific region. Data were analyzed using linear regression to determine the relationship between the use of Islamic financial products, Islamic financial literacy, and economic welfare. The results showed that the use of Islamic financial products, such as Sharia-based savings, financing, and investment, has a significant positive impact on economic welfare. Islamic financial literacy acts as a mediator that strengthens this effect. This study highlights the importance of education and expanding access to Islamic finance to improve people's lives. The conclusion of this study recommends strengthening inclusive and community-based Islamic financial policies to achieve sustainable economic welfare.