Analysis of The Implementation of the Mudarabah Contract in Improving the Welfare of Sharia-Based Msmes

Abstract

This study aims to analyze in depth the implementation of the mudarabah contract in improving the welfare of Sharia-compliant Micro, Small, and Medium Enterprises (MSMEs). MSMEs are a strategic sector in the national economy, yet they still face limited access to financing in accordance with Sharia principles. Therefore, the mudarabah contract, as a profit-sharing financing scheme, is a relevant alternative to support equitable and sustainable business growth. This study uses a qualitative approach with descriptive-analytical methods through a literature review of various scientific sources over the past five years. Data were obtained from accredited national journals, reports from Islamic financial institutions, and official government documents. The analysis was conducted by examining the theoretical concepts and empirical implementation of the mudarabah contract in MSME financing. The results show that the implementation of the mudarabah contract has a positive impact on improving the welfare of MSMEs, primarily through its fair and flexible profit-sharing mechanism. This system allows entrepreneurs to develop their businesses without the pressure of fixed payments, thus making them more adaptable to business risks. Furthermore, mudarabah financing also encourages increased productivity, business expansion, and the creation of new jobs. However, the implementation of this contract still faces various obstacles, such as low Sharia financial literacy among MSMEs, potential moral hazard, and the limitations of financial institutions in managing profit-sharing-based risk financing. Therefore, synergy between the government, Islamic financial institutions, and the public is needed to optimize the use of the mudarabah contract. From a Sharia economic perspective, the mudarabah contract aligns with the principles of justice ('adl), transparency, and benefit, and supports the achievement of the objectives of the maqasid of Sharia in improving public welfare.