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Abstract
This research develops an integrated Islamic financial management model to enhance micro-enterprise sustainability through system dynamics analysis and optimization modeling approaches. A systematic literature review method with PRISMA framework was applied to analyze 25 relevant studies from Scopus database spanning 2020-2025, focusing on Islamic financial principles integration, system dynamics applications, and micro-enterprise sustainability optimization. Research findings identify five key components of Islamic financial system dynamic structure: Mudharabah financing based on profit-loss sharing, Musyarakah financing with partnership equity, transparent Murabahah financing, zakat-waqf implementation as automatic redistribution, and Islamic risk management through collective risk sharing. The S-I4.0 framework integrating Industry 4.0 with sustainability was successfully adapted for Islamic context through spiritual and ethical dimensions addition. Model validation demonstrates that Islamic fintech integration with dynamic systems enhances micro-enterprise resilience, where perceived behavioural control and perceived moral obligation become significant predictors of financial management behavioural intentions. The developed integrated model successfully accommodates complex trade-offs between financial, social, and environmental objectives while maintaining Shariah compliance. Practical implications include developing accessible Islamic financial technology infrastructure, supportive regulations for technology-Shariah integration, and standardization of Islamic financial literacy scales for international comparability.
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References
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- Alamerew, Y.A., & Brissaud, D. (2020). Modeling Reverse Supply Chain through System Dynamics for Realizing the Transition towards the Circular Economy: A Case Study on Electric Vehicle Batteries .
- Alhammadi, S. (2022). Analyzing the Role of Islamic Finance in Kuwait Regarding Sustainable Economic Development in the COVID-19 Era. Sustainability (Switzerland) , 14 (2). https://doi.org/10.3390/su14020701
- Alshater, M.M., Hassan, M.K., Khan, A., & Saba, I. (2021). Influential and intellectual structure of Islamic finance: a bibliometric review. International Journal of Islamic and Middle Eastern Finance and Management , 14 (2), 339–365. https://doi.org/10.1108/IMEFM-08-2020-0419
- Aqila Azza Fauzia, & Yazid, M. (2024). The Influence of Sharia Pawnshops on the Sustainability of Micro, Small, and Medium Enterprises (MSMEs) in Indonesia. Iqtishodiah: Journal of Islamic Economics and Banking , 6 (2), 79–84. https://doi.org/10.62490/iqtishodiah.v6i2.738
- Cahyandari, R., Kalfin, R., Sukono, R., Purwani, S., Ratnasari, D., Herawati, T., & Mahdi, S. (2023). The Development of Sharia Insurance and Its Future Sustainability in Risk Management: A Systematic Literature Review. Sustainability (Switzerland) , 15 (10). https://doi.org/10.3390/su15108130
- Coldwell, D., Venter, R., Joosub, T., & Duh, H. (2022). The Tension between SMEs' Growth and Sustainability in Emerging and Developed Countries' Internationalization: Towards a Conceptual Model. Sustainability (Switzerland) , 14 (8). https://doi.org/10.3390/su14084418
- Costa Melo, I., Alves Junior, P.N., Queiroz, G.A., Yushimito, W., & Pereira, J. (2023). Do We Consider Sustainability When We Measure Small and Medium Enterprises' (SMEs') Performance Passing through Digital Transformation? Sustainability (Switzerland) , 15 (6). https://doi.org/10.3390/su15064917
- Dinc, Y., Çetin, M., Bulut, M., & Jahangir, R. (2021). Islamic financial literacy scale: an amendment in the sphere of contemporary financial literacy. ISRA International Journal of Islamic Finance , 13 (2), 251–263. https://doi.org/10.1108/IJIF-07-2020-0156
- Endris, E., & Kassegn, A. (2022). The role of micro, small and medium enterprises (MSMEs) to the sustainable development of sub-Saharan Africa and its challenges: a systematic review of evidence from Ethiopia. Journal of Innovation and Entrepreneurship , 11 (1). https://doi.org/10.1186/s13731-022-00221-8
- Gąsior, A., Grabowski, J., Ropęga, J., & Walecka, A. (2022). Creating a Competitive Advantage for Micro and Small Enterprises Based on Eco-Innovation as a Determinant of the Energy Efficiency of the Economy. Energies , 15 (19). https://doi.org/10.3390/en15196965
- Ghenai, C., Salameh, T., & Merabet, A. (2020). Technico-economic analysis of off grid solar PV/Fuel cell energy system for residential communities in desert regions. International Journal of Hydrogen Energy , 45 (20), 11460–11470. https://doi.org/10.1016/j.ijhydene.2018.05.110
- Grira, J., Labidi, C., & Labidi, C. (2020). Banks, Funds, and Risks in Islamic Finance: Literature & Future Research Avenues .
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- Hu, S., Chen, X., Ni, W., Wang, X., & Hossain, E. (2020). Modeling and Analysis of Energy Harvesting and Smart Grid-Powered Wireless Communication Networks: A Contemporary Survey. IEEE Transactions on Green Communications and Networking , 4 (2), 461–496. https://doi.org/10.1109/TGCN.2020.2988270
- Khan, MS, Rabbani, MR, Hawaldar, IT, & Bashar, A. (2022). Determinants of Behavioral Intentions to Use Islamic Financial Technology: An Empirical Assessment. Risks , 10 (6). https://doi.org/10.3390/risks10060114
- Koot, M., & Wijnhoven, F. (2021). Usage impact on data center electricity needs: A system dynamic forecasting model. Applied Energy , 291 (March 2021). https://doi.org/10.1016/j.apenergy.2021.116798
- Kosasih, W., Pujawan, IN, & Karningsih, PD (2023). Integrated Lean-Green Practices and Supply Chain Sustainability for Manufacturing SMEs: A Systematic Literature Review and Research Agenda. Sustainability (Switzerland) , 15 (16). https://doi.org/10.3390/su151612192
- Machado, E.A., Scavarda, L.F., Caiado, R.G.G., & Santos, R.S. (2024). Industry 4.0 and Sustainability Integration in the Supply Chains of Micro, Small, and Medium Enterprises through People, Process, and Technology within the Triple Bottom Line Perspective. Sustainability (Switzerland) , 16 (3). https://doi.org/10.3390/su16031141
- Machowski, J., Bialek, J. W., & Bumby, J. R. (2008). Power System Dynamics: Stability and Control. Power System Dynamics: Stability and Control , 349–350.
- Martins, A., Branco, M.C., Melo, P.N., & Machado, C. (2022). Sustainability in Small and Medium-Sized Enterprises: A Systematic Literature Review and Future Research Agenda. Sustainability (Switzerland) , 14 (11), 1–26. https://doi.org/10.3390/su14116493
- Naeem, K., Zghibi, A., Elomri, A., Mazzoni, A., & Triki, C. (2023). A Literature Review on System Dynamics Modeling for Sustainable Management of Water Supply and Demand. Sustainability (Switzerland) , 15 (8), 1–24. https://doi.org/10.3390/su15086826
- Osman, I., Syed Alwi, SF, Rehman, MA, Muda, R., Hassan, F., Hassan, R., & Abdullah, H. (2024). The dilemma of millennial Muslims towards financial management: an Islamic financial literacy perspective. Journal of Islamic Marketing , 15 (1), 59–78. https://doi.org/10.1108/JIMA-09-2021-0283
- Qudah, H., Malahim, S., Airout, R., Alomari, M., & Hamour, A. A. (2023). Islamic Finance in the Era of Financial Technology : A Bibliometric Review of Future Trends .
- Rabbani, MR, Ali, MAM, Rahiman, HU, Atif, M., Zulfikar, Z., & Naseem, Y. (2021). The response of Islamic financial services to the covid-19 pandemic: The open social innovation of the financial system. Journal of Open Innovation: Technology, Markets, and Complexity , 7 (1), 85. https://doi.org/10.3390/JOITMC7010085
- Rabbani, MR, Bashar, A., Nawaz, N., Karim, S., Ali, MAM, Rahiman, HU, & Alam, MS (2021). Exploring the role of Islamic fintech in combating the aftershocks of Covid-19: The open social innovation of the Islamic financial system. Journal of Open Innovation: Technology, Markets, and Complexity , 7 (2). https://doi.org/10.3390/joitmc7020136
- Risnawati, R., Siradjuddin, S., & ... (2023). Analysis of the Organization and Management of Sharia Micro-Enterprises: Sustainability and Effectiveness in an Economic Context Based on Sharia Principles. Innovative: Journal of Social Science Research , 3 , 2263–2274. http://j-innovative.org/index.php/Innovative/article/view/2181%0Ahttps://j-innovative.org/index.php/Innovative/article/download/2181/1693
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- Sholihah, N., Satria Ladaina, M., Hartini, T., Raden, U., & Palembang, F. (2025). Implementation of Sharia Financial Management and Planning on the Performance and Productivity of MSMEs in Palembang. TOMAN: Journal of Management Topics , 2 (2), 437–446.
- Suharto, B. (2024). Analysis of the Contribution of Sharia Principles in the Financial Management of MSMEs in Indonesia Budi . 3 (2023).
- Tijjani, B., Ashiq, M., Siddique, N., Khan, M.A., & Rasul, A. (2020). A bibliometric analysis of quality research papers in Islamic finance: evidence from Web of Science. ISRA International Journal of Islamic Finance , 13 (1), 84–101. https://doi.org/10.1108/IJIF-03-2020-0056
- Trupp, A., Salman, A., Stephenson, M.L., Chan, L.F., & Gan, J.E. (2025). A Systematic Review of Challenges Faced by Micro and Small Enterprises in Tourism Destinations: Producing Solutions through Resilience Building and Sustainable Development. Tourism Planning and Development , 22 (3), 301–323. https://doi.org/10.1080/21568316.2024.2307970
- Wube, M. C., & Atwal, H. (2024). Supply chain management of micro, small, and medium enterprises (MSMEs) in Africa: a bibliometric analysis. Journal of Innovation and Entrepreneurship , 13 (1). https://doi.org/10.1186/s13731-024-00388-2 .
References
Abdurrohman Akbar, FM, Rosidta, A., & Lazuardi, A. (2024). Development of a Sharia Financing Model for Micro, Small, and Medium Enterprises (MSMEs). Ar Rasyiid: Journal of Islamic Studies , 2 (1), 29–38. https://doi.org/10.70367/arrasyiid.v2i1.17
Alamerew, Y.A., & Brissaud, D. (2020). Modeling Reverse Supply Chain through System Dynamics for Realizing the Transition towards the Circular Economy: A Case Study on Electric Vehicle Batteries .
Alhammadi, S. (2022). Analyzing the Role of Islamic Finance in Kuwait Regarding Sustainable Economic Development in the COVID-19 Era. Sustainability (Switzerland) , 14 (2). https://doi.org/10.3390/su14020701
Alshater, M.M., Hassan, M.K., Khan, A., & Saba, I. (2021). Influential and intellectual structure of Islamic finance: a bibliometric review. International Journal of Islamic and Middle Eastern Finance and Management , 14 (2), 339–365. https://doi.org/10.1108/IMEFM-08-2020-0419
Aqila Azza Fauzia, & Yazid, M. (2024). The Influence of Sharia Pawnshops on the Sustainability of Micro, Small, and Medium Enterprises (MSMEs) in Indonesia. Iqtishodiah: Journal of Islamic Economics and Banking , 6 (2), 79–84. https://doi.org/10.62490/iqtishodiah.v6i2.738
Cahyandari, R., Kalfin, R., Sukono, R., Purwani, S., Ratnasari, D., Herawati, T., & Mahdi, S. (2023). The Development of Sharia Insurance and Its Future Sustainability in Risk Management: A Systematic Literature Review. Sustainability (Switzerland) , 15 (10). https://doi.org/10.3390/su15108130
Coldwell, D., Venter, R., Joosub, T., & Duh, H. (2022). The Tension between SMEs' Growth and Sustainability in Emerging and Developed Countries' Internationalization: Towards a Conceptual Model. Sustainability (Switzerland) , 14 (8). https://doi.org/10.3390/su14084418
Costa Melo, I., Alves Junior, P.N., Queiroz, G.A., Yushimito, W., & Pereira, J. (2023). Do We Consider Sustainability When We Measure Small and Medium Enterprises' (SMEs') Performance Passing through Digital Transformation? Sustainability (Switzerland) , 15 (6). https://doi.org/10.3390/su15064917
Dinc, Y., Çetin, M., Bulut, M., & Jahangir, R. (2021). Islamic financial literacy scale: an amendment in the sphere of contemporary financial literacy. ISRA International Journal of Islamic Finance , 13 (2), 251–263. https://doi.org/10.1108/IJIF-07-2020-0156
Endris, E., & Kassegn, A. (2022). The role of micro, small and medium enterprises (MSMEs) to the sustainable development of sub-Saharan Africa and its challenges: a systematic review of evidence from Ethiopia. Journal of Innovation and Entrepreneurship , 11 (1). https://doi.org/10.1186/s13731-022-00221-8
Gąsior, A., Grabowski, J., Ropęga, J., & Walecka, A. (2022). Creating a Competitive Advantage for Micro and Small Enterprises Based on Eco-Innovation as a Determinant of the Energy Efficiency of the Economy. Energies , 15 (19). https://doi.org/10.3390/en15196965
Ghenai, C., Salameh, T., & Merabet, A. (2020). Technico-economic analysis of off grid solar PV/Fuel cell energy system for residential communities in desert regions. International Journal of Hydrogen Energy , 45 (20), 11460–11470. https://doi.org/10.1016/j.ijhydene.2018.05.110
Grira, J., Labidi, C., & Labidi, C. (2020). Banks, Funds, and Risks in Islamic Finance: Literature & Future Research Avenues .
Harsanto, B., Mulyana, A., Faisal, YA, Shandy, VM, & Alam, M. (2022). A Systematic Review on Sustainability-Oriented Innovation in Social Enterprises. Sustainability (Switzerland) , 14 (22), 1–18. https://doi.org/10.3390/su142214771
Hu, S., Chen, X., Ni, W., Wang, X., & Hossain, E. (2020). Modeling and Analysis of Energy Harvesting and Smart Grid-Powered Wireless Communication Networks: A Contemporary Survey. IEEE Transactions on Green Communications and Networking , 4 (2), 461–496. https://doi.org/10.1109/TGCN.2020.2988270
Khan, MS, Rabbani, MR, Hawaldar, IT, & Bashar, A. (2022). Determinants of Behavioral Intentions to Use Islamic Financial Technology: An Empirical Assessment. Risks , 10 (6). https://doi.org/10.3390/risks10060114
Koot, M., & Wijnhoven, F. (2021). Usage impact on data center electricity needs: A system dynamic forecasting model. Applied Energy , 291 (March 2021). https://doi.org/10.1016/j.apenergy.2021.116798
Kosasih, W., Pujawan, IN, & Karningsih, PD (2023). Integrated Lean-Green Practices and Supply Chain Sustainability for Manufacturing SMEs: A Systematic Literature Review and Research Agenda. Sustainability (Switzerland) , 15 (16). https://doi.org/10.3390/su151612192
Machado, E.A., Scavarda, L.F., Caiado, R.G.G., & Santos, R.S. (2024). Industry 4.0 and Sustainability Integration in the Supply Chains of Micro, Small, and Medium Enterprises through People, Process, and Technology within the Triple Bottom Line Perspective. Sustainability (Switzerland) , 16 (3). https://doi.org/10.3390/su16031141
Machowski, J., Bialek, J. W., & Bumby, J. R. (2008). Power System Dynamics: Stability and Control. Power System Dynamics: Stability and Control , 349–350.
Martins, A., Branco, M.C., Melo, P.N., & Machado, C. (2022). Sustainability in Small and Medium-Sized Enterprises: A Systematic Literature Review and Future Research Agenda. Sustainability (Switzerland) , 14 (11), 1–26. https://doi.org/10.3390/su14116493
Naeem, K., Zghibi, A., Elomri, A., Mazzoni, A., & Triki, C. (2023). A Literature Review on System Dynamics Modeling for Sustainable Management of Water Supply and Demand. Sustainability (Switzerland) , 15 (8), 1–24. https://doi.org/10.3390/su15086826
Osman, I., Syed Alwi, SF, Rehman, MA, Muda, R., Hassan, F., Hassan, R., & Abdullah, H. (2024). The dilemma of millennial Muslims towards financial management: an Islamic financial literacy perspective. Journal of Islamic Marketing , 15 (1), 59–78. https://doi.org/10.1108/JIMA-09-2021-0283
Qudah, H., Malahim, S., Airout, R., Alomari, M., & Hamour, A. A. (2023). Islamic Finance in the Era of Financial Technology : A Bibliometric Review of Future Trends .
Rabbani, MR, Ali, MAM, Rahiman, HU, Atif, M., Zulfikar, Z., & Naseem, Y. (2021). The response of Islamic financial services to the covid-19 pandemic: The open social innovation of the financial system. Journal of Open Innovation: Technology, Markets, and Complexity , 7 (1), 85. https://doi.org/10.3390/JOITMC7010085
Rabbani, MR, Bashar, A., Nawaz, N., Karim, S., Ali, MAM, Rahiman, HU, & Alam, MS (2021). Exploring the role of Islamic fintech in combating the aftershocks of Covid-19: The open social innovation of the Islamic financial system. Journal of Open Innovation: Technology, Markets, and Complexity , 7 (2). https://doi.org/10.3390/joitmc7020136
Risnawati, R., Siradjuddin, S., & ... (2023). Analysis of the Organization and Management of Sharia Micro-Enterprises: Sustainability and Effectiveness in an Economic Context Based on Sharia Principles. Innovative: Journal of Social Science Research , 3 , 2263–2274. http://j-innovative.org/index.php/Innovative/article/view/2181%0Ahttps://j-innovative.org/index.php/Innovative/article/download/2181/1693
Salido-Andres, N., Garcia-Rodriguez, N., & Cachero-Martinez, S. (2022). Connecting Social Enterprises and Sustainable Consumption: Systematic Review, Bibliometric Analysis, and Conceptual Framework. Sustainability (Switzerland) , 14 (20). https://doi.org/10.3390/su142013428
Sholihah, N., Satria Ladaina, M., Hartini, T., Raden, U., & Palembang, F. (2025). Implementation of Sharia Financial Management and Planning on the Performance and Productivity of MSMEs in Palembang. TOMAN: Journal of Management Topics , 2 (2), 437–446.
Suharto, B. (2024). Analysis of the Contribution of Sharia Principles in the Financial Management of MSMEs in Indonesia Budi . 3 (2023).
Tijjani, B., Ashiq, M., Siddique, N., Khan, M.A., & Rasul, A. (2020). A bibliometric analysis of quality research papers in Islamic finance: evidence from Web of Science. ISRA International Journal of Islamic Finance , 13 (1), 84–101. https://doi.org/10.1108/IJIF-03-2020-0056
Trupp, A., Salman, A., Stephenson, M.L., Chan, L.F., & Gan, J.E. (2025). A Systematic Review of Challenges Faced by Micro and Small Enterprises in Tourism Destinations: Producing Solutions through Resilience Building and Sustainable Development. Tourism Planning and Development , 22 (3), 301–323. https://doi.org/10.1080/21568316.2024.2307970
Wube, M. C., & Atwal, H. (2024). Supply chain management of micro, small, and medium enterprises (MSMEs) in Africa: a bibliometric analysis. Journal of Innovation and Entrepreneurship , 13 (1). https://doi.org/10.1186/s13731-024-00388-2 .