TOWARDS A NEW PARADIGM: SHIRKAH PRODUCT AND SERVICE INNOVATION IN FACING THE CHALLENGES OF THE MODERN ECONOMY IN THE DIGITAL AGE

Abstract

The increasing complexity of the modern economy in the digital era, accompanied by global and regional economic challenges, drives the need for adaptive and sustainable innovation of Islamic financial products and services. This study aims to analyze the potential and challenges of implementing shirkah contracts in the development of innovative products and services in Islamic financial institutions. Using the method of comprehensive literature review and comparative analysis of the implementation practices of shirkah contracts in various global Islamic financial institutions, this study found that shirkah contracts have a flexible and adaptive framework for the development of innovative products and services that are in accordance with the needs of the modern economy such as MSME financing, sharia fintech, and sharia investment. Challenges in the implementation of the shirkah contract include aspects of regulation, governance, and financial literacy. Therefore, this study recommends innovative strategies and solutions to overcome challenges and optimize the potential of shirkah contracts in facing the digital era.