Financial Literacy’s Impact on Interest in Sharia Investment: An Examination Using SEM-PLS
DOI:
https://doi.org/10.34123/jurnalasks.v18i1.784Keywords:
Financial Inclusion, Financial Literacy, Sharia Investment, SEM-PLS, Southwest PapuaAbstract
Introduction/Main Objectives: This research explores the impact of financial literacy, including knowledge, confidence, and ability, on interest in Sharia investment. Background Problems: the relationship between financial literacy and interest in sharia investment. Novelty: Considering that each province has different community characteristics, especially in the Southwest Papua Province area which is included in the 3T areas (underdeveloped, frontier, and outermost), an analysis was carried out and using SEM-PLS for analysis of Ddta. Research Methods: Using the Structural Equation Model Partial Least Square (SEM-PLS) method with the response variable sharia investment interest and the financial literacy variable with the dimensions of knowledge, confidence and ability. Finding/Results: The results show that financial literacy has a positive and statistically significant effect on interest in Sharia investment. Although its explanatory power is limited (R² = 0.094), the findings indicate that financial literacy functions as an enabling factor rather than a sole determinant of Sharia investment interest. These results suggest that improving financial literacy alone is insufficient to substantially increase interest in Sharia investment. Therefore, policies aimed at promoting Sharia investment should integrate financial education with institutional trust-building, product accessibility, and socio-religious engagement, particularly in underdeveloped and frontier regions such as Southwest Papua.
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