Analysis of Financial Management in Micro, Small and Medium-sized Enterprises from an Islamic Economic Perspective

Abstract

This research study takes a close look at how the Setia Cikarawang Farmers' Group, an SME in Dramaga, Bogor, manages its money and aligns it with Islamic business ethics. Through conversations and direct observations, we found that their financial habits remain highly traditional. Because time is tight and the chairman focuses heavily on farming operations, budgeting and cash flow tracking exist only as rough mental estimates. Their capital structure is unbalanced, with the government aid coming only as physical equipment. To keep daily operations afloat, they adapt flexibly by taking advance payments from customers and working out flexible payment extensions with farmers for raw materials. Even though their financial management is informal, this small group deeply lives out Islamic ethics principles like shiddiq, Asy Syafafiyyah, and Al-’Adl. This is clearly shown by their consistent product quality following SOPs and having received official certifications from P-IRT, BPOM, and Halal.