BUILDING SHARIA FINANCIAL LITERACY TO PREVENT ONLINE LOAN TRAP AMONG YOUNG GENERATION

Abstract

This study explores the level of Islamic financial literacy among the younger generation as a preventive measure to reduce dependence on online loans, which can negatively affect financial stability. The research examines key issues, including the low understanding of the younger generation regarding the basic principles of Islamic finance, the harmful effects of online loans, and the need for an effective approach to enhance Islamic financial literacy. This study uses a qualitative method, employing a literature review approach that draws from relevant sources, including 13 primary references consisting of 8 reputable journals and 5 books published in the last 10 years. The focus of this study is Islamic finance and financial management. The findings reveal that Islamic financial literacy is crucial in equipping the younger generation with a deeper understanding of financial management based on sharia principles. A solid understanding of these principles is expected to help the younger generation avoid risks associated with interest-based online loans. The study also identifies that educational strategies based on sharia values can develop a wiser mindset in managing personal finances. Therefore, the development of a comprehensive and practical Islamic financial literacy program is recommended to enhance financial awareness among the younger generation.