Abstract

The purpose of this research is to identify the obstacles of SMEs in accessing financing from sharia financial institutions and the level of financial literacy or financial skills possessed by SMEs. Data were collected from 374 SMEs in Java as whole by using questionnaire and analyzed using descriptive analysis. The findings of this study indicate that there are several internal and external barriers that affect SMEs in accessing Islamic financial institutions. Some of the obstacles include the low level of knowledge about finance and accounting, as well as the low level of knowledge about the Islamic Financial Institution. To overcome these internal and external barriers, this research offers solutions through mentoring, training and increasing knowledge capacity by forming a community of practice (CoP). CoP is an informal institution consisting of experts and stakeholders involved in Islamic financial access to SMEs.

Keywords: Small and Medium Enterprises, community of practice (CoP), Islamic Financial Institution (IFI).