Reconstruction of the supervision system of digital sharia microfinance institutions in Indonesia (2025-2035) to increase tax revenues and reduce poverty in villages

Abstract

The digital transformation of Indonesia's financial sector has driven rapid growth in Digital Sharia Microfinance Institutions (LKMS), which play a crucial role in supporting MSMEs and rural financial inclusion. However, this potential has not been optimally utilized to increase tax revenues and reduce village poverty due to a fragmented supervisory system, limited capacity, and non-specific regulations. This study reconstructs the digital sharia LKMS supervisory system for the 2025-2035 period through a qualitative approach and truncated derivative analysis. The developed multiplicative model synergizes three key variables: supervisory effectiveness (St), institutional collaboration (Gt), and sharia financial inclusion (It). The system reconstruction is implemented in three phases: Foundation (2025-2027) for regulatory strengthening and institutional capacity building; Growth (2028-2030) for financial inclusion expansion and collaboration optimization; and Optimization (2031-2035) integrating AI and blockchain. The results show that this integrated supervisory approach can expand the rural MSME tax base and improve poverty budget efficiency. The real-time monitoring system with gradient approach (∇Pt and ∇Kt) enables continuous evaluation and adaptive strategy adjustments. It is concluded that the reconstruction of the digital sharia LKMS supervisory system is an essential prerequisite for achieving fiscal resilience and social justice in Indonesia.