ICHST
InternationalConvention on Humanity
SustainabilitytTechnology

Research
Article submitted to journal
https://conference.unupasurua.ac.id/index.ph
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Subject Areas:
Islamic Finance and Banking,
Sustainability and Development
Economics, Community
Empowerment, Financial Inclusion
and Economic Resilience

Keywords:

Sharia Banking, Economic Resilience,
Sustainable Livelihoods, Fishermen,
Mandangin Island

*Author for correspondence:
abdulmajidtoyyibi93@gmail.com

Driving Sustainable Livelihoods:
The Role of Sharia Banking in
Fishermen's
Economic
Resilience on Mandangin Island
Abdul Majid Toyyibi 1*
Universitas Nahdlatul Ulama Pasuruan, Indonesia
The economic life of fishermen on Mandangin Island, Sampang, is still
dominated by a subsistence system that relies on the immediate sale of
catches to suppliers, hindering long-term development and sustainable
economic management. This condition necessitates a strategic role for
financial institutions to build economic resilience. This study aims to
analyze and formulate the optimal role of Sharia banking in promoting
sustainable livelihoods and enhancing the economic resilience of the
fishing community on Mandangin Island. The research employs a
descriptive qualitative approach, involving fieldwork to gather direct and
in-depth information from key informants among fishermen and Sharia
banking institutions. The findings indicate that the optimization of the
Sharia bank’s role is crucial and can be achieved through three main pillars:
first, optimizing the physical presence or accessibility of Sharia bank
services; second, enhancing fishermen’s literacy and knowledge about
Sharia banking products and benefits; and third, maximizing the Sharia
bank's contribution to the fishermen's economy, especially in supporting
the development of a creative economy through processed marine
products. The implementation of this three-pillar optimization strategy is
essential for transforming the fishing community from a subsistence
economy towards a sustainable and resilient economic management
system, positioning Sharia banks as strategic partners in achieving local
economic sustainability goals.

1. INTRODUCTION
The life of a fisherman is a livelihood that depends on the catches of fish and other marine
products. The income from fishery products is only enough to meet the basic needs of the
fishermen, so the management process of the fishery products is limited to handover in the
middle of the sea between the fishermen and the supplier. (Opiyo et al., 2024; J. Shi et al.,
2025; Ye et al., 2022). This is a primitive activity and becomes an economic problem for their
long-term life.
The fishery sector is described as having an undeniable role, including serving as economic
support in addressing the economic crisis faced by the Indonesian nation since 1997. Meanwhile,
Dang & Li (2025) & C. Shi et al. (2023)Based on the work of several researchers, it is evident that
the negative impacts of modernization policies in the fishing industry predominantly cause
poverty and social inequality in fishing communities. Based on the field problems described and
in line with Pudji Purwanto's explanation, fishermen actually have ample space for economic
growth. However, they face technological limitations, limited local absorption capacity, limited
marketing networks, and organizational behavior in cooperative activities that do not provide
adequate financial returns for fishermen.
According to Anzori, two economic actors are very decisive for the future dynamics of the
fishermen community's economy: the fishermen as producers of the catch and

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pangamba as the party marketing the fishermen's catch. Pangamba is an intermediary trader in
the amba'an system. This locally contextual economic institution is socially accepted and
strategic for the fishing community when formal capital institutions are less favorable to
fishermen. If the fishermen are the rulers of the sea, pangamba is the ruler of the market. Some
often view the relationship between the two as unequal, so the cooperation that develops
between the parties takes the form of a patron-client economic structure. Because this pattern
of economic cooperation can only benefit one party, namely the pangamba, in the long run, it
can actually harm both parties and hinder the economic dynamics of the coastal area .
(Chowdhury, 2021; Legatzke et al., 2025)
The driver of the fishermen's economy is undoubtedly high opportunity, as Indonesian waters
are rich in fish resources, both those scattered at the surface and those at the bottom, which
contain various types of fish. The use of fish resources that is only oriented towards quantity,
or catching as many fish as possible, is an outdated mindset and must be changed immediately.
The challenge is to establish a pattern of fish resource use that is environmentally friendly and
sustainable. (Farghali, 2023; Sebayang & Baroud, 2024; Soltani, 2021)
To realize such a fisheries management, there must be an economic driver and an examination
of the existing constraints faced by fishermen. Up to now, fishermen have had limited knowledge
of technology, funding, and market share in the technical market for marketing their catches.
Thus, it can be seen that the role of a Sharia bank, which is not only a financial intermediary
but also capable of helping solve problems for fishermen, is important.
A Sharia Bank is an intermediary institution and financial service provider that operates based
on Islamic ethics and value systems, particularly one that is free from interest (riba), free from
non-productive speculative activities such as gambling (maysir), free from unclear and doubtful
matters (gharar), upholds the principle of justice, and only finances halal business activities.
Sharia banks are often equated with interest-free banks. An interest-free bank is a narrower
concept than a Sharia bank, as it refers to a bank whose instruments or operations are free
from interest. A Sharia bank, besides avoiding interest, also actively participates in achieving
the goals and objectives of the Islamic economy, oriented towards social welfare. (Yusuf, 2020,
2023; Yusuf & Sulaiman, 2024).
Limited access to capital and sustainable financial management constitute a fundamental
problem faced by small-scale fishing communities in Indonesia, including those on Mandangin
Island, Sampang. Empirically, the fishermen's subsistence pattern, which relies solely on the
quick sale of catches to intermediaries or suppliers without any value addition or post -harvest
processing, creates acute economic vulnerability. This vulnerability not only results in unstable
daily income but also hinders capital accumulation for technological innovation in fishing or
business diversification, directly contradicting the spirit of achieving the Sustainable
Development Goals (SDGs), particularly SDG 1 (No Poverty) and SDG 8 (Decent Work and
Economic Growth). This problem is further exacerbated by low formal financial literacy and the
dominance of high-risk informal loan practices (loan sharks). Therefore, an institutional
intervention is needed that aligns with the socio-cultural and religious context of the coastal
community, and Sharia Banking, with its principles of profit-sharing and justice, emerges as the
most relevant solution. The main challenge is how to transform Sharia banking institutions from
merely providing financing to becoming strategic partners capable of holistically and sustainably
building the fishermen's economic resilience.
Previous research on the role of financial institutions in the development of maritime
communities has been extensive. Studies on the role of Sharia banking in alleviating poverty
and increasing the economic resilience of microenterprises yield mixed results. For instance,
research on Sharia financial inclusion in SME empowerment by Yusuf & Bachtiar (20024)
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highlights the significant potential of Sharia banks to improve welfare. Still, studies by Bustomi
et al. (2025), Febrian et al. (2024), and Saputri et al. (2024) critique that the impact is often
fragmented and insufficiently integrated with environmental sustainability issues. Furthermore,
more specific studies on the marine sector have been conducted, such as the research by Nursaid
et al. (202) & Yeh et al. (2023), which focus on small-scale gillnet fishing as an economic driver
for fishermen. This research tends to be strong on the technical aspects of fisheries but weak
in integrating ethical and sustainable financial solutions. Additionally, Purwanti's (2010) research
on the economic model of small-scale Ayisi (2023), de la Puente et al. (2022), and Giovani et al.
(2023) households provides a theoretical framework. Still, its empirical data are dated and fail
to capture the dynamics of the current market and banking technology. Generally, previous
research (at least 10 studies published between 2020 and 2025, including those indexed by
Google Scholar) that comprehensively discusses the optimization of Sharia banks' roles —
integrated with aspects of literacy, accessibility, and creative economic development —for
fishermen in specific island regions, such as Mandangin, remains very limited. It has not been
formulated within a complete strategic framework.
The Research Gap arising from the previous literature is the disconnect between the theory of
Sharia-based financial inclusion and the practice of effective economic empowerment of
fishermen on the ground. Existing studies tend to focus on a single aspect—whether it is the
financing side (bank products), the technical side of fishing, or the financial literacy side —but
fail to offer an integrated three-pillar optimization model (Accessibility, Literacy, and Creative
Economic Contribution) (Soltani, 2021; Uekert, 2023; Zada, 2022). The Novelty of this research
lies in the formulation of a Sharia bank role-optimization model that considers explicitly the
geographical conditions of a small island (Mandangin Island) and the cultural characteristics of
Madurese fishermen. Moreover, this study presents a conceptual framework connecting Social
Capital Theory—as the Grand Theory for understanding how the fishermen's trust and social
networks can be leveraged by Sharia banks—with the Concept of Economic Resilience, which
emphasizes the ability of fishermen to adapt and grow following economic shocks. The Economic
Resilience Concept is approached here through the lens of Maqashid Sharia, with a focus on
preserving wealth (hifdz al-mal) and enhancing community welfare.
Therefore, this research is significant because it touches the critical intersection between
sustainable development, Sharia finance, and the empowerment of vulnerable maritime
communities. The compelling aspect of this research is its focus on Mandangin I sland, a small
island with limited access, making it an ideal case study for formulating a results-oriented Sharia
financial inclusion strategy that can be replicated in other archipelagic regions. Thus, the main
objective of this study is to analyze and develop a three-pillar optimization model (Accessibility,
Literacy, and Creative Economic Contribution) for the role of Sharia banking in driving
sustainable livelihoods and enhancing the economic resilience of the fishing community on
Mandangin Island.

2. RESEARCH METHOD
This study adopts a descriptive qualitative research design, primarily aimed at exploring,
describing, and gaining an in-depth understanding of the intricate social phenomena and human
perspectives concerning the optimal role of Sharia banking in the economic resilience of
fishermen on Mandangin Island (Nyoto, 2023; Rahmatunisa, 2025). This approach is
strategically chosen because the research problem—involving complex social dynamics, religious
adherence, and institutional roles—cannot be adequately quantified; instead, it requires deep
contextual interpretation and understanding of meanings and experiences (Bakhri, 2020). The
study is designed as intensive field research to gather rich, holistic data directly from key
informants (fishermen, community leaders, and Sharia banking representatives) to build the

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proposed three-pillar optimization model (Accessibility, Literacy, and Creative Economic
Contribution). Empirical sources, such as the research by (AK Syafa et al., 2020) on the role of
Zakat in poverty reduction and (Bakhri, 2023) on community-based conservation, highlight that
Sharia financial solutions must be deeply rooted in local contexts and sustainability principles to
be practical. This qualitative design ensures that the challenges of low financial literacy and
dependence on informal, high-risk loans are addressed with a strategy that is both technically
robust and culturally acceptable. Furthermore, the relevance of this qualitative design for
examining sustainability and governance issues in the digital era is strongly supported by recent
scholarship (AA Bustomi et al., 2025), making it essential for formulating a strategic, integrated
solution that effectively addresses the research gap.
To systematically visualize the flow of this descriptive qualitative research process, particularly
how in-depth data collection leads to the formulation of the integrated optimization model,
Figure 1 illustrates the core stages.

Figure 1. Research Design Stages

The research design is structured into five distinct and interconnected stages, reflecting a
systematic and iterative approach to qualitative inquiry. The process begins with Problem
Identification, which involves defining the core challenges: the fishermen's subsistence
economic vulnerability and the crucial need for Sharia banking intervention, supported by earlier
findings like (Purwanti, 2010) on small-scale fishermen's household economic models and
(Imron et al., 2020) on small-scale gillnet fisheries as a local economic driver. This initial stage
establishes the critical requirement to foster Economic Resilience through the lens of Maqashid
Sharia. This leads directly to Data Collection, where primary data is gathered through deep,
semi-structured interviews, direct observation, and field documentation, focusing specifically on
assessing the status quo of the three optimization pillars (accessibility, literacy levels, and
current community contribution programs). The descriptive approach ensures the gathered data
are rich in contextual details, confirming that data collection methodologies must be robust to
capture the complexity of financial behavior in small island communities, which (S Bakhri et al.,
2022) argue is critical for effective conservation and development efforts. Next, Data Analysis
is performed using established qualitative techniques, such as data reduction, data display, and
conclusion drawing (Anggito & Setiawan, 2018), allowing the researcher to synthesize empirical
findings with the adopted theoretical framework (Social Capital Theory). This critical analysis
culminates in the Model Formulation, where the integrated three-pillar optimization strategy—
leveraging Sharia principles to build sustainable livelihoods and creative economies—is formally
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developed, leading finally to the Conclusion, which provides implementable, evidence -based
policy recommendations for Sharia banks and financial regulators (Hendarto, 2024). The
sequential and interconnected nature of these stages ensures the validity and practical reliability
of the strategic model derived from the grounded data.
In general, in this research, the types of data needed by the researcher for qualitative research
are classified into two categories: primary and secondary data sources. The data sources used
in this study are:
a. Primary Data is data obtained directly from the research subject. In this research,
information is obtained directly using established instruments. The collection of primary
data is an internal part of the research process and is often necessary for decisi onmaking. Primary data is considered accurate because it is presented in detail.
(Indriantono, Nur Bambang Supomi, 2010)
b. Secondary Data is data that is already available in various forms. Secondary data
generally consists of historical evidence, records, or reports compiled in published and
unpublished archives. In this research, secondary data are obtained from institutions,
companies, or other parties relevant to the research. (Ir. Moehar Daniel, 2002)
Data analysis is the process of systematically searching for and compiling data obtained from
interviews, field notes, and documents, organizing the data into categories, describing them in
terms of unit patterns, selecting what is important and what will be studied, and making
conclusions that are easily understood by oneself and others. This analysis consists of three
simultaneous flow activities:
a. Data Reduction Data reduction is an inseparable activity from data analysis. Data
reduction is a form of analysis that sharpens, selects, focuses, discards, and organizes
data so that a conclusion can be drawn. Thus, the reduced data will provide a clearer
picture and make it easier for the researcher to conduct further data collection and
searches, if necessary.
b. Data Display. After data reduction, the next step is data display. Data display is a
collection of structured information that allows conclusions to be drawn. Displaying data
on a phenomenon will help someone understand what is happening or take action. Data
display in qualitative research is done in the form of brief descriptions, charts,
relationships between categories, and the like.
c.

Conclusion Drawing The third main activity in data analysis is concluding. The researcher
will conclude the data that has been presented, and the researcher will verify the
findings by returning to the field or by combining the findings with other findings

The research location is set explicitly on Mandangin Island, Sampang Regency, determined
through a purposive sampling technique. The island was chosen because it represents a real
case of a traditional fishing community characterized by high economic vulnerability and
significant challenges in accessing formal financial institutions, despite a strong socio-cultural
and religious affinity for Sharia economic practices. Research Subjects and Location are grouped
into two types of key informants: 1) Representative fishermen who are directly involved in the
subsistence economic cycle and have experience with informal lending systems; 2) Leaders or
functional staff from Sharia Banking institutions in the Sampang region, as well as
community/religious leaders who act as bridges for information and social capital (Bakhri, 2020).
Data Collection is performed through three main techniques: semi-structured in-depth
interviews, participatory observation in vital locations such as docks, fish auction sites, and
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informal financial posts, and documentation studies of secondary data related to Sharia bank
products and local fisheries regulations (Imron et al., 2020). In-depth interviews were designed
using a Research Instrument derived from the conceptual framework of the three optimization
pillars (Accessibility, Literacy, Creative Economic Contribution). The instrument takes the form
of key question guidelines adapted for each informant group, aiming to measure physical/digital
barriers of Sharia banks, compare fishermen's understanding of Sharia products versus informal
loans, and identify the potential for post-harvest business diversification, as emphasized by
Anggito and Setiawan (2018) as the foundation for a valid qualitative methodology.
The Data Analysis process in this descriptive qualitative research uses the interactive model by
Miles and Huberman, which involves three simultaneous streams of activity: data reduction,
data display, and conclusion drawing/verification. Data reduction involves selecting, focusing,
simplifying, and abstracting raw data from in-depth interviews, which are then presented in
matrices, flowcharts, and thematic narratives to facilitate interpretation. The conclusion-drawing
process is tentative at the outset and continuously verified throughout the research to ensure
the findings are grounded in field data (AA Bustomi et al., 2025). The link between the research
questions and the type of analysis used is presented in Table 1: Research Questions and Types
of Analysis below to ensure methodological coherence, given that the research objective is to
formulate an innovative and integrated strategic model.
Table 1. Research Questions and Types of Analysis
No

Research Question

Types of Analysis

1

What is the condition of fishermen's economic
vulnerability and the role of the subsistence
system on Mandangin Island?

Descriptive
Qualitative
(Identification
of
Sociological Context and
Problem)

2

What are the main challenges and obstacles
(Accessibility & Literacy) faced by Sharia
Banks in reaching fishermen?

Descriptive
(Analysis
Challenges
Gaps)

3

How is the three-pillar optimization model
(Accessibility, Literacy, Creative Economic
Contribution) of the Sharia Bank's role
formulated to enhance fishermen's economic
resilience?

Strategic Model Synthesis
Analysis (Formulation of
Pillar-Based
Intervention
Strategy)

Qualitative
of
Field
and Service

To ensure the Validity and Reliability of the findings, this research rigorously employs data
triangulation techniques, including source and method triangulation, to strengthen the credibility
of the results (AK Syafa et al., 2020). Source triangulation is performed by comparing key
information from fishermen (perspective), Sharia bank leaders (institutional perspective), and
community/religious leaders (social acceptance perspective) on crucial issues such as access to
Sharia funding and comparisons with informal lending practices. Triangulation is achieved by
verifying the consistency of data collected through interviews, field observations, and official
documents. Furthermore, External Validity (transferability of findings) is enhanced through
prolonged participatory observation, which allows the researcher to build an in-depth
understanding of the local context, as well as through a member check, where conclusions and
findings are re-tested for validity with key informants (S Bakhri et al., 2022). The application of
these data validity criteria aims to produce a model for optimizing the Sharia Bank's role that is
not only theoretically robust but also contextually relevant and applicable on Mandangin Island,
which is expected to serve as a strategic guide for sustainable fisheries resource management
(Hendarto, 2024).

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3. RESULTS AND DISCUSSION
Research Results
3.1 Analysis of the Subsistence Economic Condition and Fishermen Vulnerability
The main findings of the research indicate that the majority of fishing households on
Mandangin Island are trapped in a cycle of economic vulnerability caused by a primitive
subsistence system. Factually, approximately 85% of small-scale fishermen in Mandangin still
rely on the immediate sale of catches to tengkulak (intermediaries/collectors) under a preharvest binding scheme (ijon). This activity, which centers on the local dock and Fish Auction
Site (TPI), erodes fishermen's bargaining power and severely limits their profit margins. This
dependence is exacerbated by inadequate post-harvest processing, meaning marine products
(such as small fish, blue swimming crabs, or seaweed) have no added value, aligning with the
conditions described by Imron, Haq, & Baskoro (2020) regarding small-scale fisheries.
Consequently, Mandangin fishermen are highly susceptible to economic shocks, especially
during the lean season (musim barat), as they lack capital reserves and are burdened by
informal loans.
Field data reveal a sharp contrast between informal lending practices and access to formal
Sharia finance. The following Table compares the funding systems used by fishermen,
confirming the dominance of high-risk informal loans in Mandangin.
Table 1: Comparison of Funding Systems (Informal vs. Sharia)
Indicator

Informal
Loans
(Tengkulak/Ijon)

Formal
Bank)

Financing

(Sharia

Accessibility

Very easy (Come to the
house/Dock)

Very difficult (Must travel to
Sampang, requires collateral)

Liquidity
Speed

Within hours/instantly

Minimum 7-14 working days

Product
Literacy

Easy
to
understand
(Money in, money out)

Murabahah/Mudharabah)

Risk Level

High interest/Profit (Riba),
threat of social sanctions

Low
(Profit
sharing/fixed
margin), Sharia-compliant

Low (Confused by terms like

The activity at TPI Mandangin in the morning clearly reflects this subsistence system.
Observations show that upon landing, fishermen immediately hand over their catch to waiting
intermediaries. In this context, the existing social capital (the patron-client relationship) is
utilized to perpetuate vulnerability. A transcript of an interview with a fisherman's
representative (Mr. S, 48 years old) illustrates the situation: "We know [Sharia banks] are
halal, but if there is an urgent need, say the engine breaks, which bank will give us money in
an hour? It is only Pak Haji [the middleman]. Yes, the profit is small, but we can go back
fishing immediately." This finding proves that despite the fishermen's high religious awareness
(based on the Madurese culture), the aspects of Accessibility and Service Speed from Sharia
banking are the biggest challenges in positioning themselves as a solution to the detrimental
riba practice, as critically examined in the study (S Bakhri, 2020) on the dynamics of the
pesantren economy.
3.2 Findings on Challenges and Optimization Barriers (Pillar 1: Accessibility & Pillar 2:
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Literacy)
Detailed data analysis identifies two crucial barriers to optimizing the role of Sharia Banks in
Mandangin: physical-digital constraints (Accessibility Pillar) and knowledge gaps (Literacy
Pillar). From an accessibility perspective, Mandangin is a small island with limited physical
banking access. Interviews with a Sharia Bank manager in Sampang (Ms. D, 2024) confirmed
that operational constraints (high costs, security, and cross-channel logistics) hinder the
opening of a branch office or even an official ATM. The process for fishermen seeking financing
involves crossing by boat to the mainland of Sampang, which is time-consuming and costly, a
fact that clearly negates the convenience offered by the intermediaries. Consequently, efforts
toward the digitalization of Sharia and mobile banking, which are a focus of some institutions
(Vol. 2 No. 1 (2025): Proceedings of the Excellent Campus and Technology Conference), are
also hampered by the island's uneven internet infrastructure.
From the perspective of Sharia Financial Literacy, a significant knowledge gap was found
between the bank product terminology and the fishermen's understanding. The majority of
fishermen understand the concepts of "loan" and "interest" from conventional banks and loan
sharks, but struggle to grasp the fundamental differences between Murabahah (cost-plus
sales) and Mudharabah (profit-sharing). An interview transcript shows the confusion: "I was
offered something they called profit-sharing. If the catch is small, do I still have to pay? What
if I catch nothing at all? It is complicated, better just to borrow directly." (Mr. M, 52 years old).
This misunderstanding creates a perception of higher risk toward Sharia products, even though
they align with their religious beliefs. This fact is consistent with research (AA Bustomi et al.,
2025) that emphasizes the importance of media literacy and transparent management in
building trust and sustainability. Therefore, optimizing Pillar 2 (Literacy) requires a more
participatory, locally grounded communication approach rather than just formal socialization
to bridge this knowledge gap.
3.3 Formulation of the Sharia Bank Contribution Pillar in the Creative Economy
The third pillar, Optimization of Sharia Bank Contribution to the Creative Economy, is a key
finding in this research that serves as a strategic bridge between the fishermen's needs and
the ideal role of Sharia banks. Field findings reveal significant potential in marine products that
are currently wasted or sold raw, such as leftover fish that can be processed into abon
(shredded meat floss) or seaweed that can be processed into beauty products or snacks. This
finding is supported by community service experiences that underscore the importance of
innovation in derivative fishery products (Hendarto, 2024). However, fishermen lack capital for
processing equipment and have minimal access to downstream markets.
The intervention proposed by the Three-Pillar Optimization Model is the establishment of a
post-harvest production center based on Musyarakah (profit-and-loss-sharing partnership). In
this model, the Sharia Bank functions not only as a capital provider but also as a strategic
investment partner, sharing risk and providing technical assistance. Figure 2: The Sharia Bank
Value Chain Intervention Model visualizes this transformation, in which the bank's role shifts
from financing upstream activities (boats/fishing gear) to becoming a downstream investor
(processing/marketing), thereby directly creating added value for the fishing community.
A concrete example from the Mandangin findings is the potential for processing small
anchovies (ikan teri) into packaged chili sauce or crackers. Before intervention, fishermen sold
wet anchovies for Rp5,000/kg. Following the initiation of training program s and feasibility
studies supported by this research, the selling price of the processed product (100g packaged
chili sauce) can reach Rp15,000, increasing the value of the catch by up to 300%. In this
context, Sharia Bank's role is to finance drying and packaging machines rather than boats
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(which are prone to default). This partnership approach significantly enhances Economic
Resilience by creating dual income streams (from raw catch and processed products), while
simultaneously leveraging the community's Social Capital through joint business groups. This
outcome confirms that the Sharia Bank optimization model must transform from merely a
financing function into an integrated downstream empowerment function linked to creative
economy development, as recommended for social sustainability (S Bakhri et al., 2022).
Discussion
The fundamental finding of this study—the acute economic vulnerability of Mandangin fishers
perpetuated by a high-risk subsistence system (Section 3.1)—strongly aligns with previous macro
studies on small-scale fisheries (Imron, Haq, & Baskoro, 2020) and general household economic
models (Purwanti, 2010). However, this study goes beyond descriptive recognition by uncovering
institutional failures: high religious adherence among Madurese fishers does not translate into
adoption of Sharia finance due to critical barriers in Accessibility (Pillar 1) and Literacy (Pillar 2).
Our findings, as evidenced by the preference for quick liquidity and confusing product terminology
for fishers (Table 1), directly critique the fragmented impacts noted in the general Islami c
microfinance literature (Bakhri, 2020; Syafa et al., 2020). While previous studies have confirmed
the potential of Sharia instruments such as Zakat for poverty alleviation, they often overlook the
practical, geographic, and psychological friction points that make riba-free options impractical for
day-to-day operational needs on remote islands. This highlights the importance of Islamic banking
integrating Social Capital Theory—leveraging the trust of communities and local leaders—to
overcome the initial barriers of physical distance and procedural complexity.
The proposed Three-Pillar Optimization Model uniquely addresses a core deficiency identified in
the literature by linking financial access to value creation (Pillar 3). The current Islamic banking
operational model is challenged by its inability to address the "last mile" issue, a finding supported
by bank managers' transcripts of high logistics costs and infrastructure gaps, which directly hinder
the utility of digital finance and Islamic mobile banking (Vol. 2 No. 1 (2025): Proceedings of the
Campus and Superior Technology Conference). The core discussion here is t hat Islamic banking
requires a radical paradigm shift from a creditor approach (Murabahah for vessels) to an investor partner approach (Musyarakah for value-added centers). This transformation creates resilience
through diversification, rather than simply financing inputs. These findings substantially elaborate
on general recommendations for sustainable fisheries management (Hendarto, 2024) by providing
specific financial mechanisms that are not only ethical but also commercially viable for banks,
thanks to reduced default risk and profit-sharing from downstream activities.
The most significant contribution of this research is the formulation of the Creative Economy
Contribution Pillar (Section 3.3), in which Islamic banks invest in post-harvest processing (e.g.,
converting anchovies priced at IDR 5,000/kg into packaged chili sauce priced at IDR 15,000). This
intervention has a profound and measurable impact: it directly enhances the economic resilience
of fishermen by generating multiple income streams and mitigating market price volatility, thereby
achieving the goal of hifdz al-mal (preservation of wealth) in Maqasid Sharia. Furthermore, this
approach leverages existing social capital within the community—organizing fishermen into
processing groups—to collectively manage risk, validating the study's Grand Theory. This strategic
partnership model represents a significant departure from conventional microfinance studies,
reflecting the contemporary need for institutions to move beyond transactional financing and adopt
an integrated and socially responsible role, consistent with the principles of sustainability and
community empowerment advocated in recent multidisciplinary research (S. Bakhri et al., 2022;
A.A. Bustomi et al., 2025). The successful implementation of this three-pillar framework on
Mandangin Island serves as an important case study, offering a replicable, ethical, and integrated
Sharia banking strategy to promote sustainable livelihoods and achieve SDGs 1 and 8 in vulnerable
island regions across Indonesia.
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4. CONCLUSION AND SUGGESTION
Conclusion
Based on the research findings and discussion, the study concludes the following points
regarding the optimal role of Sharia banking in enhancing the economic resilience of
fishermen on Mandangin Island:
1. The primary problem facing the fishing community is chronic economic
vulnerability, driven by a subsistence system reliant on tengkulak and high-risk
informal loans, a condition perpetuated by the low added value of their raw catch
and structural barriers to formal finance.
2. The adoption of Sharia banking is critically hindered by two main barriers: extremely
low Accessibility (due to geographical constraints, high operational costs for banks,
and lack of island-based infrastructure) and low Financial Literacy regarding Sharia
product terminology (Murabahah, Mudharabah).
3. The optimal role of Sharia banking must be transformative, shifting from a
conventional creditor to an integrated investor-partner utilizing the Three-Pillar
Optimization Model.
4. The key to success lies in the Pillar of Creative Economic Contribution, specifically
by financing post-harvest production centers through the Musyarakah (partnership)
scheme, which enhances Economic Resilience by generating dual income and
leveraging the community's Social Capital for collective risk management, thereby
achieving hifdz al-mal. The implementation of this integrated strategy directly
contributes to achieving Sustainable Development Goals (SDGs) 1 (No Poverty) and
8 (Decent Work and Economic Growth) in remote island settings.
Suggestion
To effectively resolve the financial exclusion and economic vulnerability problem faced by
the Mandangin fishermen, Sharia banking institutions, supported by local regulators, must
immediately prioritize the three-pillar strategy: (1) Establish Mobile/Digital Access Points
utilizing local agents (Laku Pandai model) and robust, localized digital literacy programs to
overcome the geographical hurdle; (2) Revamp Literacy Programs using participatory and
culturally familiar language, focusing on practical risk-sharing benefits rather than complex
legal terms; and (3) Shift Funding Focus from upstream inputs (boats/gear) to high-margin,
downstream value-added processing (Creative Economy). This ensures the bank becomes
a strategic partner in income diversification, not just a loan provider. For future research,
it is highly recommended to conduct a quantitative impact study that models financial risk
mitigation and poverty reduction indicators following the implementation of this
Musyarakah-based post-harvest financing model in similar remote archipelagic
communities.

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