Performance Improvement for Micro, Small and Medium Enterprises (SMEs) with Social Financing Model

Objective – This study aims to analyze the implementation of Qardhul Hasan in Islamic Banking in Indonesia. This study uses the phenomenology approach to explain the phenomenon. Methodology/Technique – Data were collected through in-depth interviews, observation, and documentation and analysis was conducted using the Interpretative Phenomenological Analysis (IPA) and the Sharia Analysis. Findings – Results drawn from the Interpretative Phenomenological Analysis (IPA) show that: (1) The meanings of Qardhul Hasan in Islamic Banking in Indonesia are diverse. Qardhul Hasan was interpreted as loans and charity. The sources of fund drawn from the Qardhul Hasan sources in Islamic Banking in Indonesia originated from Infaq, charity, non-halal funds, fines, and donations. Qardhul Hasan in Islamic Banking in Indonesia was implemented with two models: Productive Loan Fund Distribution and Social Fund Distribution. From the Sharia Analysis, it was noted that most of the Qardhul Hasan objects were approved by the Islamic Economic Theory. Novelty – The novelty of this study lies in the analysis results which proposed that (1) Qardhul Hasan should be interpreted according to its goodness principles, (2) Source of Funds for Qardhul Hasan should come from ZISWAF, and (3) The model of empowerment should be developed according to the needs of the Indonesian population, especially as a maritime country Type of Paper: Empirical