The Role of the Sharia Capital Market in Improving the Economy in Indonesia

Abstract

This research aims to analyze the role of the Islamic capital market in supporting the Indonesian economy. The sharia capital market functions as a source of funding and investment instruments for the community and companies that operate in accordance with sharia principles. The research method uses a literature study approach with secondary data analysis obtained from the reports of the Financial Services Authority (Otoritas Jasa Keuangan /OJK) and the Central Statistics Agency (Badan Pusat Statistik /BPS). The results of the study show that the Islamic capital market contributes positively to national economic growth, both through increasing investment activities and expanding the investor base oriented towards ethical finance. The contribution of the Islamic capital market to Indonesia’s Gross Domestic Product is also considered significant, reflecting its role in strengthening the stability and inclusiveness of the national financial sector. However, this study also found several main challenges, especially the low level of Islamic financial literacy and limited access to Islamic capital market products. Therefore, efforts to improve education, socialization, and product innovation are needed to encourage the sustainable development of this sector.