ISLAMIC FINANCIAL LITERACY: CONSTRUCT PROCESS AND VALIDITY

The advancement in the world of finance and information technology encourages Muslims and non-Muslims to decide the right choice of financial products and services available. Many of whom are already interested in Islamic financial products and services. In order to be able to make the proper decisions, then the aspect of Islamic financial literacy is mandatory. The need for Islamic financial literacy research is not only driven by the internal factor of the Muslim community itself as the obligation to obey the rules of Islam, but also due to external factors, such as the availability of complex financial instruments that lead the Muslim community to respond by making financial decisions based on Islamic financial literacy. This present research aims to determine the construction of Islamic financial literacy. Specifically, the constructs are carried out through qualitative methods based on literature review of the concepts and measures of financial literacy by revealing the existing constraints and reviewing Islamic finance literatures. Based on the preliminary review, it was found the initial understanding of Islamic financial literacy which was later strengthened by in-depth interview and coding process until the construction of Islamic financial literacy was found. Subsequently, validity test was empirically performed on the constructs and instruments to be used so that it can be applied as a measurement of public Islamic financial literacy in general. For this purpose, quantitative data collection was performed with structured questionnaires of constructs which has been found in the scientific community. The finding of Islamic financial literacy construct with its dimensions and indicators is strongly required as a parameter to measure the level of financial literacy of the community in various groups. Thus, it can be a reference for the government and other interested parties to make a policy in order to realize the program of financial inclusion.