Does Income Determine Welfare? An Islamic Economics Perspective on MSMEs in Rural Indonesia

Ahmad Suminto; Muhammad Alfan Wildani; Moh. Syifa Uddin; Binti Nur Asiyah; Andi Triyawan; Muhammad Amin Firdaus

doi:10.63922/ijbqr.v4i03.5279

Ahmad Suminto Doctoral Program of Sharia Economics UIN Sayyid Ali Rahmatullah Tulungagung, Indonesia
Muhammad Alfan Wildani Doctoral Program of Sharia Economics UIN Sayyid Ali Rahmatullah Tulungagung, Indonesia
Moh. Syifa Uddin Doctoral Program of Sharia Economics UIN Sayyid Ali Rahmatullah Tulungagung, Indonesia
Binti Nur Asiyah Doctoral Program of Sharia Economics UIN Sayyid Ali Rahmatullah Tulungagung, Indonesia
Andi Triyawan Universitas Darussalam Gontor, Ponorogo, Indonesia
Muhammad Amin Firdaus Universitas Darussalam Gontor, Ponorogo, Indonesia

DOI: https://doi.org/10.63922/ijbqr.v4i03.5279

Keywords: SMEs, Income, Welfare, Islamic Economics

Abstract

This study examines the effect of income on the welfare of micro, small, and medium enterprises (MSMEs) from an Islamic economics perspective, with evidence from Sambirejo Village, Mantingan District, Indonesia. Using a quantitative approach, the study employs a total sampling technique with 30 MSME actors. Data were collected through structured questionnaires and analyzed using simple linear regression with SPSS. The findings reveal that income has a positive and statistically significant effect on MSME welfare. This result suggests that higher income enhances entrepreneurs' ability to fulfill essential needs (dharuriyat) and to improve their overall quality of life. From an Islamic economics perspective, welfare extends beyond material dimensions to include spiritual well-being, as reflected in the fulfillment of Maqashid Shariah and the attainment of falah. The study contributes to the growing literature by integrating conventional welfare analysis with Islamic economic principles. Policy implications highlight the importance of promoting Shariah-compliant business practices among MSMEs and strengthening social redistribution mechanisms, such as zakat and charity, to ensure sustainable and holistic welfare. Furthermore, local governments are encouraged to provide financial management support to enhance the effective utilization of income for long-term welfare improvement.

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