The Impact of Marketing Communication and Islamic Financial Literacy on Islamic Financial Inclusion and MSMEs Performance: Evidence from Halal Tourism in Indonesia

Abstract

Development of Halal Tourism in Indonesia is the focus of the Indonesian government and MSMEs have an important role in supporting the development of halal tourism in Indonesia. This study aims to examine the relationship between marketing communication and Islamic financial literacy on Islamic financial inclusion and MSMEs performance in the halal tourism sector. A covariance-based SEM technique utilizing LISREL software was used to analyze the data from this investigation. Non-probability sampling was employed to collect the data, and the sample consists of 152 halal tourism entrepreneurs. We find that positive and significant association between Islamic financial inclusion and business performance. We also find that there are a positive and significant association between Islamic Financial Literacy and Islamic Financial Inclusion. Marketing communication and Islamic financial inlcuon a positive relationship but insignificant. This studi implies that to establish a halal tourist ecosystem for long-term development in Indonesia, commercial actors must lend their full support. This study demonstrates that they can thrive when MSMEs in the halal tourist ecosystem are backed by Islamic banking and Islamic rural banks. As a result, a more accommodating approach from Islamic banking is required to provide access to halal finance for business actors in Indonesia’s halal tourism ecosystem.

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