THE DETERMINANTS FACTORS OF ISLAMIC FINANCIAL INCLUSION IN WEST JAVA: A COMPARISON BETWEEN GENERATION Z AND MILLENNIALS

• Main Author: Indi Haryadi, Amarila
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/77301
• Institution: Institut Teknologi Bandung

The Asian Development Bank stated that Islamic finance is one of the fastest-expanding global financial systems, and Refinitiv predicted that Islamic finance has promising future asset growth projections. This is due to the economic growth of Muslim countries, regulatory support, and capacity building facilitated by Islamic finance organizations. Indonesia, as a country with the largest Muslim population, has great potential in the Islamic economy and finance sector. The rise of Islamic finance in the world's financial system and Indonesia's huge potential have attracted the attention of the Indonesian government, which wants to make Indonesia a leader in the world's Islamic economy. West Java was chosen by the KNEKS as a pilot province for other regions to develop Islamic finance. To improve the Islamic finance sector, the community must be financially included in the system. More than half of West Java's population is made up of Generation Z and Millennials. These two generations are expected by PR Newswire to overtake Baby Boomers as the most significant customer group in financial institutions during the next decade. As in Indonesia, the generations will be dominated by the Golden Age of 2045. It’s important to include these generations to boost the Islamic finance industry in Indonesia. The main purpose of this study is to explore the determinants of Islamic financial inclusion in West Java and compare these factors between Generation Z and Millennials. This study used a Google Form and distributed it online. A sample of 616 participants from Generation Z and Millennials was obtained. Data was collected and processed using PLS-SEM analysis. This study found that Islamic financial literacy, religiosity, and social influence have an influence on Islamic financial inclusion for both Generation Z and Millennials in West Java, respectively. Islamic financial literacy has the same influence on both generations. The difference between them is religiosity has a stronger influence on Millennials than Generation Z and social influence has a stronger influence on Generation Z than Millennials.