The Role of Green Financing of Sharia Banks in Supporting the Sustainability of MSMEs in the Green Economy Era

This study examines the role of green financing of Islamic banks in supporting the sustainability of Micro, Small, and Medium Enterprises (MSMEs) in Malang City in the green economy era. Using a descriptive qualitative approach with an exploratory case study design, primary data was obtained through in-depth interviews with six cross-sector MSME actors and two Islamic bank practitioners (PT Bank Syariah Indonesia Tbk and PT Bank Muamalat Indonesia Tbk), then analyzed using the interactive model of Miles, Huberman, and Saldaña. The results of the study showed that all MSME informants were not familiar with the term green financing even though they had a track record of financing from conventional banks, while the institutional readiness of Islamic banks varied between branches. This gap is caused by information asymmetry and the lack of translation of sustainable financing policies into applicative products at the micro level, not by the rejection of sustainability values. This study recommends the reformulation of contextual education strategies and integrated mentoring schemes based on the principles of sharia maqashid and the Triple Bottom Line so that the green transition of MSMEs can be accelerated in an inclusive manner.