Implementation of Musyarakah Mutanaqisah for MSMEs: An Analysis of Potential, Challenges, and Literature Review

Abstract

Micro, Small, and Medium Enterprises (MSMEs) are a sector that plays a strategic role in driving national economic growth. However, limited access to financing remains a major obstacle hindering business development. Furthermore, Islamic banking financing products are still dominated by sale-based contracts, thus not fully meeting the needs of MSMEs, which require more flexible and partnership-based financing schemes. The study used a qualitative approach with the Systematic Literature Review (SLR) method through a search of scientific articles from Google Scholar, SINTA, and various relevant national journals for the period 2016–2026. Data were analyzed using content analysis techniques by grouping findings into aspects of opportunities and challenges in MMQ implementation. The results of the study indicate that the MMQ contract has great potential to support MSME financing because it applies the principles of partnership, risk sharing, gradual asset ownership, and provides a fairer financing scheme compared to debt-based financing. However, the implementation of MMQ still faces several obstacles, including low Islamic financial literacy, the complexity of the contract mechanism, regulatory aspects and legal certainty, and the high need for supervision and risk management from Islamic financial institutions. Therefore, regulatory strengthening, increased public literacy, product innovation, and optimization of the role of Islamic banking are needed so that the implementation of the MMQ contract can become a more effective and sustainable financing solution for the development of MSMEs in Indonesia.